Process

In depth, fundamental and rigorous analysis

Nartex implements the best practices of the leading global Private Equity and Hedge Fund institutions to analyse its companies and construct the portfolio.

Sources of information

Tradicional
Presentations, quarterly and annual accounts of the company and its competitors, discussions with management team and sell-sides
Specialised
We use industry experts and consultants, specialised publications, discussions with private investors and venture capital (public information only).
Alternative information
Purchase specialised market data, run market surveys, investigate social media trends, company culture and detailed accounting analysis.

Key pillars of Nartex’s analysis

Nartex seeks to analyse all its companies as long term owners.

Qualitative and quantitative approach based on fundamentals, key areas of focus include:

Qualitative analysis

Barriers to entry
Competitive advantages
Consumer benefits
Industry structure
Structural trends
Sources of growth
Quality of management team
Culture
Approach to capital allocation

Quantitative analysis

Quantification of target market
Quality of growth
Second derivative of growth
Cost structure
Margin trajectory
Quality of cash generated
Returns on equity
Valuation
Accounting

Investment decision

The work required to understand each potential investment is extensive . Nartex looks for companies to “marry with”.

Nartex monitors its target universe (~120 global companies) rotating the portfolio in specific circumstances.

Creation or destruction of oligopolies (changes in market structure)
Increased risk of disruption
Acceleration or deceleration of structural growth in the industry
Sub-optimal capital allocation by the management team
Extreme valuations