Ep 6 - Why Cash Flow Growth is a Core Process for a Portfolio?
by Naveen February 18, 2022
Please find below the transcript for our snippet video:
Welcome to our Video Snippet Series. Through this, we aim to open up our fund, philosophy, and process to our current & potential investors and partners. In this episode of the Snippet series we take you through:
What churn rate must an investor expect at Itus?
In Episode 4 of our snippet series, we spoke about how we think about selling at Itus. Over the last 5 years of running the fund, our average churn rate at Itus has been 20% (on average). Put another way, 1 in 5 businesses have a likelihood of an exit on any particular year. Every investment at Itus has a certain IRR expectation that we expect it to deliver and as our best-case estimate of the IRR drops, we may look to exit the business and reinvest the proceeds in a better opportunity. Being an active fund manager, while we aim to keep the churn low, this will never be 0 (as we are not buy, hold and forget investors).