Investment Strategy

Growthgate strictly follows a ‘Buy and Build’ strategy by investing growth-equity capital in selected mid-sized companies, defined as businesses with annual revenues of between $50m to $200m, that exhibit strong prospects for growth and scalable business models. Furthermore, such companies must invariably possess certain attributes to attract Growthgate’s interest and investment. Such traits include, amongst other things, an experienced management team, a profitable track record, qualitative products or services, and a sizable market share in their home market.  

Growthgate seldom uses leverage in its investments and seeks to own and hold strategic minority stakes in portfolio companies, leaving the founders-managers in charge of day-to-day operations and for charting the general course of the business. A partner-investor is a better definition of Growthagte’s approach than a classic PE investor, when it comes to portfolio companies. As a partner to mostly family-owned or entrepreneurs led-businesses, Growthgate takes an active involvement in corporate governance by retaining key voting rights on certain reserved matters that are deemed vital for the business including M&A, levels of indebtedness, sale of assets and exit timing & routes.

Growthgate’s investments are premised on the judicious utilization of the fresh equity injected in portfolio companies to enhance internal processes and to expand the business in contiguous markets. Growthgate’s team closely assists the founders-managers of said companies to aggressively expand their models, either organically or more often inorganically, by identifying and acquiring complementary targets to boost revenues, grow EBITDA and enhance the consolidated profits. 

Growthgate jointly works with the founders-managers of portfolio companies to determine the proper timing and the most appropriate route for harvesting the investments. Such are delicate and critical matters that require planning, team effort, and diligence in order to decide on the opportune structure, the right performance curve, and the most conducive exit route that meets the requirements of the potential buyers/investors and the objectives of the sellers/existing shareholders.

Over the past years, local success stories in partnership with Growthgate, have become true regional champions with several having reached leading market positions in the MENA region and beyond including in Africa.