Our strategy and capital allocation
We invest in sectors that satisfy human needs. People need energy, food retail, technology and healthcare.
We are entering a new age of economic disruption, which is impacting all of us and is driven by extraordinary levels of human creativity and technology. As the world shifts economically, there is a danger of economic and political volatility, but also new growth opportunities emerge as industries evolve new operating models. L1 will take advantage of new opportunities with USD $9.3 bn of available liquidity.
Technology impacts relationships with customers and business models and is creating change in every sector.
Buy and build
Our strategy is to buy and build. We aim to build a new portfolio of successful companies that are leaders in their fields and sectors.
We will invest our own long-term patient capital in companies in which our sectoral experience and our strategic and geographic expertise will improve performance and help companies grow and take the next step.
We have recruited world-class CEOs, sector investment teams and Advisory Boards to invest at scale. We have successfully managed companies through volatile periods like these and will do so again.
We are different from private equity companies. We buy and build assets, which we can develop over time as platforms of long-term sustainable growth.
Our capital allocation
Our portfolio and capital allocation reflects a balance of sector and company exposure with diversification across cycles, geographies, currencies and commodities.
This allows us to capitalise on long-term sector growth and shorter-term cash flow generation opportunities. It also gives us cyclical and non-cyclical opportunities, geographical diversification and commodity exposure.
Satisfy basic human needs
We invest in sectors that satisfy human needs. People need energy, food retail, and technology. As demographics change, people are increasingly concerned about their health. They need energy to power homes and grow economies. Therefore, these sectors have longevity and opportunity.
Many industries are in significant flux because of changes in society, demographics and technology. Companies around the world are transforming their operating models and deepening their relationships and knowledge of their consumers.
Our experience as executives in many industries helps us identify long-term trends.
We look for companies that will be the new stars in this changing landscape. We seek long-term disruptors in their sectors and robust platforms for future growth.
L1 capital allocation
Our investment teams are structured to invest at scale in the oil and gas, retail, health, telecoms and technology sectors.
Oil and Gas – Increasing population growth means increased demand for energy. For the next 50 years, oil and gas will be an important cash flow generator. We invest in good development opportunities at low oil prices, then target operating improvements and cost optimisation.
Technology – Big international companies are evolving their operating models, automating and changing their customer relationships in 21st-century digital economy. We invest in technology and software companies, which will provide the software and services to enable this transformation. Our expertise in retail, banking, health, oil and gas and telecoms will help us make world-class investments.
Telecoms – Telecoms companies of the future will be digitally enabled distribution platforms. They will play a role in fundamentally altering the way we live, work and relate to one another. VEON is transforming from telco to tech and evolving into a global technology company.
Health – Technology and demographic trends are pushing the boundaries of healthcare and creating new investment opportunities in contract manufacturing, life science tools and medical distribution. L1 Health aims to make several sizeable investments aimed at generating high cash flow and growth in these areas.
Retail –The retail sector is in midst of substantial change, driven by demographics and technology. We are looking for non-cyclical niches and companies that will be disruptors in the sector. These are the companies that will generate cash flow and growth
Private Equity – We will leverage the insights we gain from our investments in private equity to build expertise in new sectors. Our funds are independently managed.
Treasury – The majority of assets are invested in low-risk, highly liquid assets so that funds can be released quickly and provided to the rest of L1. In order to have adequate funds available at relatively short notice, L1 Treasury selects a broad mix of investments