Investment strategy
Middleton Enterprises actively manage 3 concentrated portfolios;
70% in listed equities
20% in growth capital
10% in venture capital
The overarching investment strategy is to;
To find and invest in the best businesses in the world.
Focus on growth, quality and predictability
Hold these positions and let them compound for the long term (5 years or more)
Over the course of a cycle, on average we will be 100% invested
When valuations are very high we can move to being 85% invested (15% in cash)
When valuations are very low we can move to being 115% invested (15% gearing)
Listed equities
At Middleton Enterprises, we don't try and time the market. We are not macro economists, and do not believe there is much value in trying to predict interest rate rises, levels of inflation or employment rates. Instead, we focus on identifying and investing in great businesses that do not rely on favourable market conditions. These are businesses that will continue to generate consistent profits and cash returns over the long term.
Middleton Enterprises has generated a compound annualised growth rate of 21% over the last 7 years. Over the same period, the broader stock market has returned 2% pa.
Criteria
MEL’s investment strategy focuses on businesses where growth is underpinned by a technology induced, multi-decade structural driver. This allows for a long-term investment horizon.
When evaluating businesses, we have three buckets; Yes, No and Too tough. We will only invest in business models which we can clearly understand and avoid businesses that are not in our area of knowledge.
The strategy focuses on buying growth companies at a reasonable price. Firstly, identifying a structural driver. Secondly, screening for high quality fundamentals. Finally, investments are only made when the price falls below fair value. The valuation is calculated using a proprietary model. This is a simple idea but when executed is a key driver of outperformance.
The strategy only buys into opportunities which report clear, transparent and predictable operational KPI’s. This means we pass on +90% of businesses reviewed. Operational predictability is a key driver behind MEL’s 74%+ buy side success.
Conviction Equities Limited will be making this investment strategy available to external investors for the first time, from early 2020. Investors will have a rare opportunity to co-invest alongside an equity strategy with a consistent track record of growth. If you are interested in learning more or investing in this fund, please contact brett@middletonenterprises.com
0% CAGR
2014-2021 Perfomance
0%
Purchase success rate
0%
Outperformance of the FTSE All share every year since inception
0
Portfolio companies
Venture capital
Middleton Enterprises invests in fast-growing private B2B SaaS companies across the UK through our syndicate of HNWI’s, Conviction Investment Partners. CIP invests exclusively in post-revenue businesses that are disrupting their domestic markets and show the potential to grow into global enterprises with £100m revenue lines.
Our Venture Capital portfolio has generated a compound annual growth rate of 21% from 2013-2019.
Investment criteria
Minimum revenue track record of 12 months
Plans to expand internationally
Scalable and repeatable business models
High annual growth rates
Demonstrable ability to become category leaders in local markets
Long term unicorn ambitions
0% CAGR
Performance 2013-2021
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Investments
0m+
External capital raised
0
Exits
Venture capital portfolio companies
Growth Capital
Middleton Enterprises invests in and develops a range of businesses. These include regional SME’s and international corporations. Our growth capital strategy is to add value to portfolio businesses as well as creating jobs and wealth.
Investment criteria
Cash generative businesses
Close founder relationship
Start-up focus
Value creation through advice, expertise and finance
Long term development partners
Deep knowledge of the sector
Growth capital portfolio companies
Impact Capital
Middleton Enterprises newest strategy aims to invest in early-stage companies that can generate a positive impact on the environment or society.
Investment criteria
Quantifiable positive impact
Tech-Focus
Eary-stage
World-Class, Ambitious Founders
Unicorn Ambitions
Roadmap to Sustainability
Impact Capital portfolio companies
