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VECTORS OF VALUE CREATION

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CrystalPoint views the world through a "prism" where it believes there are four Vectors of Value Creation & Discovery:
 

  • Science & Technology Improvements

  • Operational Improvements

  • Real Asset Rents

  • Financial Asset Pricing

 
Oftentimes, in any given investment, the value creation can include more than one vector, though, one usually dominates.

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Science & Technology Improvements

Value can be created through the development of new products or services based on scientific breakthroughs or technology developments that represent a disruptive or incremental value proposition vis-à-vis existing products or services. CP seeks large, and disruptive improvements in performance, and is open to taking on scientific and technical risk.

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Operational Improvements

Value can be created through operational improvements of existing firms or the creation of new firms with de-facto superior operations. CP seeks opportunities where the operating asset is (i) in a sector that requires a greater degree of sophistication than traditional industry, or (ii) where the operational improvements required are large enough to deter traditional financially oriented private equity investors.

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Real Asset ​Rents

Value is extracted from real assets [real estate, minerals, resources, metals, timber, shipping, pipelines] from simple rents. Usually, and in addition to rents, this asset class undergoes great cyclicality, and large mispricing occurs at both ends of the cycle. CP seeks assets that are mispriced at the appropriate points of the cycle.

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Financial Asset Pricing

Mispricing of financial assets usually results from a pervasive mischaracterization of risk in a particular financial asset, or imbalances in supply and demand around particular financial assets due to risk seeking or risk avoidance behavior of investors in adjacent areas. This usually occurs in either extreme, and such mispricing can be very short-term or long term, and can be structural or technical. CP will very opportunistically seek such mispricing and mischaracterization, and structure investments to capitalize on this difference.

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