A postcard from Europe

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A postcard from Europe.

We recently travelled to Europe to 'kick the tyres' of portfolio companies and search for new portfolio ideas. European companies make up nearly 40% of the portfolio making this an important trip to not only meet management and tour facilities but also to meet with relevant competitors to develop a keener understanding of their business strategies and the competitive landscape. The late Steve Jobs famously said "you can't look at the competition and say you are going to do it better. You have to look at the competition and say you're going to do it differently". This is our focus for current and potential portfolio companies - businesses that operate in a manner that give them a sustainable edge.

With this in mind we spent a day visiting companies in Denmark, a country which punches well above its weight when it comes to world class businesses. Firstly, we visited portfolio company Coloplast, a global leader in Ostomy and Continence Care. The meeting allowed us to question the company about recent developments associated with their US ambitions and to also get a unique insight into how their products differ from their competitors and how their innovations deliver a strong value proposition to the user. Despite recent one-off challenges, we really like Coloplast's offering and it remains a core holding in the portfolio.

Within a 20 mile radius of Coloplast, we visited four other world class companies including CHR Hansen, the leading global producer of 'off the shelf' cultures, enzymes and probiotics for the food industry and Novozymes, the global leader in industrial enzyme production. Both companies have over 45% global market share and have established their market leading position through a strong commitment to R&D and innovation. This commitment has allowed them to achieve a technology advantage over their competitors - something that piques our interest and warrants further investigation now we're back in NZ.


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