Fundamental, value-based investment research
Blue Oceans Capital is driven to achieve exceptional results with meaningful purpose through dedication to uncovering truth and applying our understanding of what is known, not what is forecasted.
We identify investments by first looking for sustainable business models that exhibit characteristics of defensive revenue streams with long-term futures as based on our understanding of structural industry changes and macro-economic shifts.
We specialise in finding small cap investments that exhibit rapidly scalable business models with global reach and high quality environmental, social and governance (ESG) factors. We identify businesses that have an exceptional financial record and where we believe our analysis capability can be confidently applied.
We aim to achieve average annualised returns of 15% per annum over 5 years. We have seen average annualised returns of 41.49 since forming.
Past performance is not a reliable indicator of future performance.
Financial markets are changing and currently undergoing one of the biggest paradigm shifts in their history as the trend towards ethical investing takes hold with the power to change the world.”
Profit with purpose
We identify businesses that act for the betterment of people and the environment.
This means we don’t invest in:
- Polluting commodities (such as oil, coal, copper or gold)
- Weapons or defence
- Alcohol and tobacco
- Any media harmful to psychological well-being
Business managers have a responsibility to the people they serve and the environment they rely on. As investors, it is our responsibility to support only those businesses acting in a sustainable fashion. To help us evaluate and promote sustainability we have become a member of the United Nations Environment Program Financial Initiative (UNEP FI) and signatories to the Principles for Responsible Investment (PRI). Take a closer look at these memberships and how we integrate sustainability measures into our analysis click here.
Join our pursuit in aligning investment with sustainability
Why Blue Oceans?
Blue Oceans encapsulates our thinking as it relates to strategy and environmental sustainability. Both core to our values.
With regard to environment, Blue Oceans evokes images of pure waters and sustainability. We see a fundamental link between environmental sustainability and the financial community. Those institutions, as providers of capital, have enormous power to force change if it is their will, and in fact, they have a responsibility to do so.
Blue Oceans as it relates to business strategy is a term coined by Kim & Mauborgne (2005) that describes business models in uncontested markets with new demand, and strong, profitable growth. For us, Blue Oceans Strategy is a mental framework and a methodology for contributing to society in a sustainable way. It assists us to capture value with time compression from ideation to realisation.
Blue Oceans’ strategy is about “building a future where customers, employees, shareholders and society win.” In this way it is aligned with our passion for business to contribute to the betterment of people and to the environment as shown in our ESG focus. As opposed to Blue Oceans, Red Ocean industry boundaries are well-defined and accepted with the rules of the game already known. In Red Oceans, companies try to outperform their rivals to grab a greater share of existing demand. As that market space gets crowded, returns diminish and products become commoditised. Blue Oceans are untapped market spaces where new demand is created and there is opportunity for highly profitable growth. Some Blue Oceans are created in entirely new industries but most are created by expanding industry boundaries into new areas and markets through value innovation within Red Oceans. Here competition is irrelevant because the rules of the game have not yet been set. The focus is on the strategic move that companies make and not the company or industry itself.
Reference: Kim, W. C., Mauborgne, R. (2005). Blue Ocean Strategy: From Theory to Practice. California Management Review, 47(3), 105–121.
Business Value Capture
? – No Captured Value – Business not possible
? – Infinite Value Creation Possibilities
A – Little Captured Value
B– Moderate Captured Value – most businesses.
C – High Value Capture
1 – Facebook
2 – Google
3 – Amazon
Figure A. Conceptual distribution curve of global untapped value creation.
“There’s nothing quite like the intellectual challenge that involves searching for the best investments possible. This, coupled with the great satisfaction of seeing those companies perform over time, makes investing a thrilling and greatly rewarding pursuit”
Will has over 90% of his wealth and family members invested in the fund.
Analyst & Software Engineer
“The process of categorising, analysing, eliminating, shortlisting, researching and ultimately investing in a company – and to see it grow beyond expectations – is one of the most fulfilling journeys you can go on in your life. And I get to go on this amazing journey everyday.”
Manik has over 90% of his wealth invested in the fund and contributes 10% of his salary into the fund.
“Nothing motivates me more than applying my best skills to select quality, sustainable companies with sound business models to invest in and watch grow over time. It only gets better knowing we work as a powerful team in the persistent pursuit of continual improvement.”
Pavel contributes 10% of his salary into the fund.