We operate in an increasingly complex, fast-moving business environment. In the coming years, sustainability and digitalisation will shape the markets we invest in. Against this background, we have developed an investment approach characterised by focus and responsible ownership.
We invest in a small number of good companies with a mission to ensure that they develop into great and responsible companies. This focused approach allows us to develop an in-depth understanding of the industry and proactively initiate discussions on value creation.
We maintain continuous dialogue with our clients and, using secure technology, strive to be as transparent as possible. We use local knowledge, local business relationships and local presence to give us a competitive edge in emerging markets.
Key Figures (31.3.2022)
Gross IRR of Investments 37.5%
Annualised net return 31.2%
Our investment strategy in a nutshell:
We apply a thematic mindset when screening for new investment opportunities.
Guided by macroeconomic trends and secular growth drivers, we identify industries that offer attractive long-term growth potential.
We then apply a fundamental research process to identify companies with a competitive advantage and robust profit-making ability.
We only invest in companies that benefit from secular growth trends and have the potential to grow their earnings significantly.
Owning quality companies in attractive industries provides robust downside protection and peace of mind, especially during volatile periods.
We believe in a concentrated portfolio. It allows us to allocate the time and resources to building a deep understanding of both the investee company and its industry.
We focus on deploying our capital in a very disciplined manner and size our positions according to our conviction.
When we invest in a company, we take a long-term view. In a normal year, we make 1-2 new investments.
A new idea always needs to provide a better risk-adjusted return than one of our existing portfolio companies.
We embed responsibility across our investment process because we firmly believe that a sustainable business approach is a prerequisite for creating long-term value.
Aiming for ever-higher standards also supports the re-rating of a company’s valuation and helps mitigate any associated risks in our portfolio.
As part of Kenno’s own assessment of potential investment opportunities, we look for both governance sustainability and ethical business practices in target companies we are seeking to invest in.
We have sought to fulfil our Corporate Social Responsibility (CSR) by integrating Environmental & Social Governance (ESG) analysis into the investment process.
In our view, the contribution of ESG analysis has expanded beyond identifying potential areas of risk to highlighting growing sources of investment opportunity.
Such opportunities can be found in less-efficient, emerging markets where ESG investment remains less prevalent than in developed markets.
Integrating sustainability into investment and ownership
Idea Sourcing Stage – Negative screening determines the risk level by using the IFC Performance Standards as a framework, identifying portfolio companies that make a positive societal impact or have transformation potential.
Due Diligence – Rigorous due diligence is conducted on target companies by reviewing financial statements, understanding the governance structure and conducting face-to-face interviews alongside site visits.
Portfolio Management – Continuous monitoring takes place at the portfolio level while the companies are managed at a strategic level.
Exit – We will endeavour to disclose key developments and progress achieved in enhancing ESG elements within investee companies.