Fundamentally, companies create value by using capital (that they raise from investors) to generate future cash flows at rates of return exceeding the cost of capital (the rate investors require as payment). Therefore, as a corollary, anything that does not increase future cash flows need not create value.

Unfortunately, these fundamentals are forgotten, quite frequently in the real world by both investors and managers, the two key agents of value creation. There have not only been numerous examples where companies have faltered in practicing the fundamentals, but also in a few instances the impact was experienced at a much larger scale including the dot com crisis and the recent subprime lead financial crisis.

At 7 Capital, the fundamental principles of value creation are the beacon to our business. We invoke our proprietary tools, skills and techniques and our wide experience to facilitate long term value creation. 

Our approach can be summarized as “identify the value creating opportunity”, “invest in the opportunity” and “inspire superior long term value creation”