Electra’s objective is to achieve a rate of return on equity of 10-15% per year over the long-term by investing in a portfolio of private equity assets.
Electra aims to achieve this target rate of return by utilising a flexible investment strategy to invest across all forms of private equity situations. These are categorised into three groups:
Buyouts and Co-investments
Direct investment in high-quality, well-managed businesses that have the potential for profits growth - through organic growth, operational improvement or acquisition. As lead investor, Electra typically targets investments of £40 to £150 million in UK-centric companies with an enterprise value of up to £300 million. Electra also co-invests £30 to £100 million in minority positions in UK or International companies, alongside founders, other private equity firms, corporates or the public markets.
Secondary purchases of existing investors' positions in either individual or portfolios of private equity funds, as well as acquisitions of portfolios of businesses, known as "secondary directs".
Secondary purchases from existing lenders of individual or portfolios of either performing or stretched loans, where "stretched" refers to debt in good businesses with bad balance sheets where Electra can take a role in the restructuring of the capital structure.
Electra attempts to mitigate risk through portfolio diversification. Investments will therefore be made across a broad range of sectors and industries. At the time of investment, not more than 15% of Electra’s total assets will typically be invested in any single investment. If Electra acquires a portfolio of companies in a single transaction, this limitation shall be applied individually to each of the underlying companies purchased and not to the portfolio as a whole.
Electra has a policy to maintain total gearing below 40% of its total assets.
Electra has a policy to return to shareholders a targeted 3% of NAV per annum, by way of cash dividend or share buybacks. Any shares bought back under this policy will be cancelled.