Venn Brown sat down with Paul Wilson, co-founder and Managing Partner of Bailador, to discuss Bailador’s investment strategy, what they look for in a business, the group’s capital management strategy, current market opportunities and portfolio performance.

Company background: Bailador is a listed investment company that invests purely in information technology companies looking for expansion capital. The constantly changing nature of the IT sector offers opportunities for outsized returns, while the expansion, hyper-growth stage presents an attractive risk reward balance to achieve the best returns.

Focus on quality: The fund focuses on technology companies that have proven market fit, strong management teams, a huge addressable market, strong unit economics and an enthusiastic and dedicated customer base.

Capital management: Bailador has a stated dividend policy of distributing 4%pa of the group’s net tangible assets. This policy was designed by provide the balance between maximising long term capital growth achieved through the out performance of the investment portfolio, while rewarding investors with a steady and attractive, fully franked income stream.

History of outperforming NTA: With the share price currently trading well below net tangible assets ($1.55 per share ), the market doesn’t credit Bailador for consistently realising assets at valuations above NTA.

Outlook: The recent retraction of the tech sector and the hesitancy of investors in both the private and listed markets is presenting Bailador with a growing number of attractive investment opportunities. With more than $100 million of cash on balance sheet, Bailador is well positioned to capitalise emerging opportunities as other investors remain cautiously on the sidelines.

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