Oakley Capital Investments

Despite broader economic challenges, Oakley Capital Investments (OCI) continues to deliver market beating shareholder returns. A focus on cash-generative companies with recurring revenues and asset-light business models means the portfolio appears to be well insulated as financial conditions have tightened, which the managers note is highlighted by double digit earnings growth over the last financial year. The staggered nature of its investments appears to provide a consistent stream of realisations (at an average premium of 35%), validating NAVs. The latest of these, the £240m sale of its stake in IU group, crystalising an 85% IRR. Despite this execution and track record, OCI’s shares remain at a considerable discount. The managers believe that while this reflects broader market weakness across unlisted assets, it is difficult to see how it can be justified over the long term given the strength of the company’s NAV growth.