Portfolio
Investment Strategy
Typically, we invest in and provide strategic direction for companies in support of their growth and expansion. We believe that Chinese growth companies present the most consistent opportunity for generating above average equity returns and the creation of long-term sustainable capital appreciation. We expect our companies to experience growth as a result of their special market position, their market growth potential, and/or through strategic acquisitions.
We target opportunities in China through our tracking and targeting of businesses that will benefit from the introduction of the Chinese government's new business policy model, "the scientific concept," which focuses on domestic economic growth and social progress. The central government's plan is to redefine its historic economic policy of promoting growth through export-driven businesses to a new model of expansion in domestic investment, with a focus on consumption and employment within China. A component of this policy is to encourage investors to introduce and develop technologies and to invest in technologically intensive projects in order to promote and facilitate the development of local technology companies.
These policies of domestic investment with a focus on domestic consumption and employment have also had the effect of greatly expanding the middle class and consumerism in China. As a result we will also seek to selectively identify attractive opportunities that will benefit from the rapid growth of the Chinese consumer.
We are committed to employing a rigorous, targeted investment approach to the growth of Covenant and our acquisition of operating companies in China. We do not intend to invest in Chinese development stage companies which lack proven technologies, market acceptance or a demonstrated business model. We target companies where the technology risk is limited and there is a normal business risk of expansion and execution of a business plan. In most cases, target companies will have an established market presence, an established revenue base and a management team committed to, and capable of, executing a successful growth strategy.
