Centrality of Capital Protection
Centrality of Capital Protection
In providing its advisory services Vesper Infrastructure Partners is committed to ensure that potential targets show those intrinsic “infrastructure characteristics” and the type of “technology exposure” which are required to deliver robust capital protection features and retain the appropriate risk-return characteristics.
In providing its advisory services Vesper Infrastructure Partners is committed to ensure that potential targets show those intrinsic “infrastructure characteristics” and the type of “technology exposure” which are required to deliver robust capital protection features and retain the appropriate risk-return characteristics.
Each target company is therefore analyzed to check the compatibility of its business model with a desired set of “infrastructure characteristics” through the application of specific screening criteria:
Stable and visible medium-term cash flows through contracted or subscription-based service revenue models with strong lock-in.
Significant downside protection driven by the essential nature of the service provided, that allows for demand and pricing de-coupling from GDP/economic cycle.
Inflation protection through the ability to implement commercial re-pricing of services and/or largely pass-through of costs.
Existence of observable economic moat driven by a specific feature of the target company (e.g. unique customer base, exclusive technology), which is largely difficult to replicate and therefore creates a barrier against competition and protecting market share.
Low disruption risk exposure of the specific company and the specific market in which the target operates (“next buyer test”).
Each target company is therefore analyzed to check the compatibility of its business model with a desired set of “infrastructure characteristics” through the application of specific screening criteria:
Stable and visible medium-term cash flows through contracted or subscription-based service revenue models with strong lock-in.
Significant downside protection driven by the essential nature of the service provided, that allows for demand and pricing de-coupling from GDP/economic cycle.
Inflation protection through the ability to implement commercial re-pricing of services and/or largely pass-through of costs.
Existence of observable economic moat driven by a specific feature of the target company (e.g. unique customer base, exclusive technology), which is largely difficult to replicate and therefore creates a barrier against competition and protecting market share.
Low disruption risk exposure of the specific company and the specific market in which the target operates (“next buyer test”).