Investment Philosophy

L1 Capital International believes that quality and value are key drivers of long-term total shareholder returns.

L1 Capital International will generally invest in businesses that demonstrate:

Durable business models

Well structured, growing industries

Aligned management with a strong capital allocation track record

Growing free cashf­low

An ability to sustain a high return on invested capital

An ability to sustain high returns on invested capital

An ability to reinvest capital at attractive incremental returns and/or return excess capital efficiently to shareholders

A conservative balance sheet and funding structure

Proactive, favourable ESG policies and practices

Our ESG approach

L1 Capital International integrates ESG considerations into its investment diligence and decision-making alongside qualitative and financial considerations. Businesses in which we invest must have sustainable policies and practices which address and improve ESG issues over the medium to long term. Our approach can be summarised in three ESG principles.

L1 Capital International:

  • Is a long-term, responsible investor, investing in listed companies which meet our strict quality requirements based on our rigorous, proprietary research-driven investment process.
  • Espouses a strong culture of compliance, risk management and ethics.
  • Seeks to ensure the Board and Management of portfolio companies actively promote a similar culture.

 

We consider the governance of a company and any material social and environmental impacts when forming our view of each company’s potential for long-term success. We focus on identifying any areas of potential concern and, where appropriate, discussing these with company management and monitoring their progress over time. We have developed our own qualitative ESG ratings which capture our assessment of each businesses across six key areas:

  • Environment
  • Management
  • Governance
  • Safety
  • Taxation
  • Public Policies and Community Support

 

L1 Capital is developing a Group ESG policy which is due to be released in Q2 2022.