Series 15 – What are Capital Calls

In a recent episode last week, we highlighted our auto-ancillary exposures in our portfolio. Today, we would like to present a real-time scenario involving two of our portfolio clients who initiated their investments in August. One of them subsequently added capital based on our recommendations. This case study demonstrates how both the portfolio experienced growth during the period.

What are Capital Calls – In Jan’2023, when we identified we could see a volatility in the market, we proactively contacted our clients and partners, urging them to consider adding capital. Our objective was to deploy capital aggressively in companies where we found valuation comfort within our portfolio.

Why we did capital calls and what happened to the portfolios? – The following analysis compares the returns of the first client portfolio with the second –

We see that the second portfolio is already showing excessive returns over the first portfolio, because we had the funds to build the portfolio, to buy companies at a relatively cheaper valuation. This outcome can be attributed to our ability to construct the portfolio by deploying capital to acquire companies at relatively lower valuations. This fundamental rationale was the driving force behind our request for clients  to add capital when we deemed it necessary.

We take pride in being pioneers within the industry, establishing a process to communicate with our clients during volatile market conditions. We believe that our proactive approach, combined with the ability to identify opportunities and deploy capital strategically, sets us apart. By capitalizing on favourable valuations, we strive to optimize returns for our clients.

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