The River Capital Growth Fund
The River Capital Growth Fund makes strategic investments in small to medium sized Australian listed businesses and “best of breed” international companies that operate in sectors where River Capital has a deep understanding and proven expertise.
The Fund’s objective is to meet investors’ requirements for capital preservation and superior investment returns over the medium to long term. To achieve this objective, we aim to invest in businesses that, through a combination of earnings growth and dividends, are expected to generate pre-tax returns of at least 15 per cent per annum. Since its inception in 1996, the Fund’s average return exceeds 22 per cent per annum after all fund expenses but prior to performance fees.
When selecting investments, we apply a simple yet disciplined philosophy and will only invest in businesses which demonstrate all of the following characteristics:
- A transparent and properly scrutinised operating history
- Predictable earnings and cash flows
- Leading industry position with a sustainable competitive advantage
- A strong balance sheet with minimal reliance on financial engineering
- An expected annual pre-tax return to us of at least 15 per cent through a combination of dividends and capital growth having regard to historic trading multiples
- A management team that is willing to engage with us as owners
- A history of returning a material proportion of free cash flows to shareholders in the form of dividends
Due to our focus on capital preservation, we are able to hold discretionary levels of cash and cash equivalents. By applying a disciplined approach to investing and an appropriate margin of safety, River Capital aims to outperform traditional equity funds with reduced levels of risk and volatility.