So let's start with the question
that is probably the biggest one
that management devote their
time to what businesses or
markets to invest in and
what not to invest in.
At one level, this is about
what to buy and what to sell.
But it's much more nuanced than that.
It's often about how much to invest
in business a versus business B or
in market a versus market B,
which markets to hold money back from and
which to buy extra money into.
There are three Reasons why
a headquarters of a group
would want to invest the shelter's
money in a business.
And the first is that
it's a good business.
It's a an exciting business.
It's got high growth potential.
It's a business that's
making good profits.
Maybe it's a business
that's got strong managers.
It may have some Important sources
of advantage over its competitors.
So it's just a good place to
make money you're likely to get
high returns on the money you invest.
And that's kind of the business
logic reason for investing.
But there are two other reasons for
And the second is because we the managers
At the corporate group level,
know how to add value to this business.
So we know how to improve it or
we know how to create
synergies between this business and
some other businesses that we have.
And this is a reason for us to invest or
to want to earn this business.
Even if it isn't necessarily a good
business, because we can add value to it.
And the third is more of a sort
of investment strategy logic,
which is because it's cheap, we think we
can buy it for less than it's worth, or
we can invest in it for
less than the value of the assets that
we're going to get as a result
of making the investment.