- Chapmans Limited subscribes to the buy-low-sell-high model with a view to backing businesses that can create value
- The company is focused on investing in a variety of options, which include new businesses, listed entities and short-term arbitrage
- The primary focus is on a special situation investment, which involves extensive research and due diligence
It can be a little complex to understand what ‘buy-low-sell-high’ investment means. It can, however, be easily understood with the example of one of the most popular brands today -- Google. Two names -- that of Google co-founders Larry Page and Sergey Brin -- are quite renowned. But one additional name that of Andy Bechtolsheim, who has as much to do with the early phase of Google as Page and Brin, often finds little mention.
What was Andy Bechtolsheim’s role in the early phase of Google? Well, Bechtolsheim, the co-founder of Sun Microsystems, cut a check of US$100,000 to the two co-founders of Google in August 1998. That well-timed investment later bore him fruits. Bechtolsheim’s investment in Google is a classic example of the buy-low-sell-high strategy.
A Sydney-based investment company Chapmans Limited , led by Executive Chairman Peter Dykes, who brings to the table over two decades of contribution to investment and advisory fields, is focused on a similar model of acquiring a stake in companies at the most opportune time. This could be a special situation event -- for example, a bankable project in need of urgent access to capital for product and/ or market expansion -- or early-stage entities that can become profitable assets in the near-to-medium term. The exit strategy is clear from the beginning, and it concentrates squarely on increasing the value of all the stakeholders.
A start-up with a clearly defined roadmap for accelerated revenue generation can be a viable investment prospect for Chapmans. The company also identifies lucrative direct investments in mature businesses, including publicly listed entities, which are distressed due to special situations like suspension. Chapmans also explores opportunities presented by events like mergers and acquisitions, litigation, and bankruptcy.
Read here to know more about Chapmans’ listing plans.
Chapmans undertakes thorough due diligence to make sure the invested funds are utilised in creating a lucrative asset over the next 12 to 24 months. Value is generated by connecting the right dots that clearly indicate a high-growth potential of the targeted business.
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Buy low, sell high
The example of Bechtolsheim’s timely investment in an early-stage company holds significance. It shines the spotlight on identifying a viable asset and backing it at the opportune time to create wealth for all the stakeholders. Chapmans is run on the same model which looks at elements like sustainability and competitiveness of the business by assessing its relationship with suppliers and customers.