Investing in a great company doesn't have to be great. "Not fashion, but fundamentals"

• - In our strategy, we focus mainly on companies that have an appropriate competitive advantage and the ability to generate cash in the long term. That is why we are increasingly boldly positioning ourselves in the healthcare sector, especially in the area of ​​imaging diagnostics - says Andrzej Różycki from Tar Heel Capital.
• He also shared his observations on the role of the Warsaw Stock Exchange. - The Warsaw Stock Exchange is currently de facto closed to smaller companies. To successfully enter the WSE, a valuation of at least several billion zlotys is needed, only then will the offer arouse interest from funds - he says.
• Andrzej Różycki is a member of EEC Members, a project associating participants and partners of the European Economic Congress.

EEC Members is a project that integrates the community of participants and partners of the European Economic Congress, providing them with a permanent opportunity to develop business contacts and participate in dialogue with the government and business environment institutions. One of the members of this group is Andrzej Różycki, Managing Partner at Tar Heel Capital, one of the leading Polish companies in the private equity industry.

Not fashion, but foundations. How to look for a healthy business?

Our interlocutor pointed out that when analysing potential investments, the fund tries to look for businesses that have an appropriate competitive advantage, while also having a reasonable valuation and the ability to generate cash in the long term.

- In our strategy, we focus mainly on traditional businesses, those that are supported by long-term trends. We are interested in companies that have an appropriate competitive advantage and the ability to generate cash in the long term. That is why we are increasingly boldly positioning ourselves in the healthcare sector, especially in the area of ​​imaging diagnostics. We see several trends that stand out, on the one hand, the aging of societies and greater care for health, and on the other, the deficit of doctors - says Andrzej Różycki.

Last week, the THC fund acquired 75 percent of shares in Med-Gastr Medical Center.

- On the one hand, technology has been recently emerging in the broadly understood diagnostic medicine, but on the other hand we have fewer and fewer radiologists. Yes, artificial intelligence will support doctors, but we will still need specialists. Technology will allow doctors to increase the efficiency of their work - adds Różycki.

Stock exchange debut is not the final way to close the investment

When asked about the role of the Stock Exchange as a way to close an investment by taking a portfolio company public, Różycki pointed to several aspects limiting its potential.

- The Warsaw Stock Exchange is currently a de facto closed exchange for small and medium-sized companies. In order to successfully enter the Warsaw Stock Exchange, for an entity to make sense to go public, a valuation of at least several billion zlotys is needed, and the offer itself should amount to over a billion. Only then will it be large enough and will it interest foreign funds and institutional investors - says Andrzej Różycki.

He adds that the basic investment scenario for Tar Heel Capital is effective support in building a fundamentally sound company that will generate trust and interest from industry investors, which does not necessarily mean the intention to go public.