Baobab Partners Manifesto

We view Baobab Investment Management as a Partnership where we co-invest alongside a group of like-minded long-term investors. These are some of the principles that guide us and should serve as a useful guide for prospective Client Partners.

  • We believe equity ownership is the best way to preserve and build long-term wealth. As a result, most of our time is spent seeking attractively priced equities.
  • We think and invest like long term business owners, because we are. Our focus is on the next 5 years, not the next quarter or year and we seek ownership stakes in businesses that we would like to own for 5-7 years or more.
  • We are investors not speculators. We buy shares in undervalued businesses that we understand. We do not trade and we are not drawn to the exciting stories of the time.
  • From time to time we will take investment stakes in businesses of average quality that we expect to own for less than 5 years. We will only do this when the level of mispricing is extreme, and when the business has sound management and a reasonable balance sheet.
  • We favour quality, but only at the right price.
  • We have a strong preference for owner-managed businesses where management have a significant equity stake and are aligned, long-term thinkers.
  • We like to partner with the right people.
  • We seek humility and integrity in all of our partners, especially the management teams we invest in. Cultural alignment is as important as financial alignment.
  • We believe in simplicity. Investing is hard, but it shouldn’t be complicated. If a potential investment needs a complex excel model, it is probably not cheap enough.
  • We are patient investors and seek to buy on our own terms. We are comfortable holding cash when the market is not offering sufficient opportunity.
  • We will be transparent in our communication, in good times and bad.