Value Driven Investment Engine

Fairclough Palmer AG operates with a carefully constructed business model designed to identify and capitalise on intrinsic value across global equity markets. Through the strategic deployment of capital obtained from shareholders and convertible debt investors, the objective is to generate sustainable growth and robust long term returns.

Strategic Capital Deployment: The Value Investing Approach

Capital provided by convertible debt investors forms a vital component of the acquisition strategy for Fairclough Palmer AG. This funding enables the meticulous identification and securing of undervalued opportunities within both public and private equity. The investment philosophy is rooted in thorough fundamental analysis, seeking companies and assets with inherent worth that may not be fully reflected in their current market price. Rather than broad diversification across numerous holdings, the approach focuses on concentrated positions in selected, high conviction, undervalued entities across a range of industries and sectors.

Generating and Amplifying Returns: A Cycle of Value Creation

The cash flow generated by the acquired portfolio through consistent dividend yields and the operational performance of private companies forms the engine for further growth. Moreover, any temporarily uninvested cash reserves contribute to returns through interest income. This internally generated capital is then strategically redeployed, fuelling additional investments in undervalued public equities and the acquisition of further private companies spanning developed and emerging economies. Such a disciplined reinvestment strategy creates a powerful compounding effect, driving the expansion and overall value of Fairclough Palmer AG's holdings.

Convertible Debt: Flexible Partnership and Future Equity

As convertible loan agreements (CLAs) approach maturity, investors are presented with choices that align respective interests with the long term success of Fairclough Palmer AG:

• Discounted Equity Conversion: CLA holders have the opportunity to convert the debt into equity in Fairclough Palmer AG at a favourable, pre-agreed discounted rate. This allows for a transition to becoming shareholders, directly participating in the future value creation of the company.
• Principal Repayment: Alternatively, should a debt holder's investment objectives change, the option is retained to receive the initial principal investment back, providing flexibility and capital preservation.

The Compounding Advantage: Sustainable Growth and Value Accretion

The core objective of Fairclough Palmer AG's business model is to establish a self-sustaining cycle of value creation. By strategically deploying initial debt capital to acquire a carefully curated portfolio of undervalued public and private equity across diverse industries and sectors, the aim is to generate positive cash flow for Fairclough Palmer AG. This positive cash flow subsequently empowers the company to pursue further acquisitions, creating a compounding effect that drives significant and sustainable growth. Such growth ultimately benefits all stakeholders, including shareholders and convertible debt investors who elect to participate in the company’s equity progression.