Oakmount & Partners has found a formula that works for companies seeking growth

It is a contradiction that is accepted by seasoned investors, but rarely mentioned in general conversation – financial markets aren’t always the best arbiters of value or allocators of capital.

If this is a problem for those smaller, growth companies out there banging the drum for good assets or projects, then it is an opportunity for those smart enough to spot this anomaly.

Glenn King is one of those people who has always had a keen eye for where the market has flatly mid-priced the risk-reward (or should I say reward-risk) equation.

He reveals he was a successful early investor in Strategic Minerals and Sirius Minerals before parlaying that experience into his business, Oakmount & Partners, which he set up in 2009.

Oakmount sources much-needed growth capital for projects, mainly in natural resources and usually ones with a green slant to them. 

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It does this by tapping into a pool of high-net-worth and ultra-high-net-worth investors who share King’s foresight.

In return for providing this capital, they are looking for a better than market return for their backing with the added kicker of capital growth.

This circle is squared by using a convertible loan note structure that might pay an annual yield in the 7-12% range but also provides the ‘upside potential’ of a price increase you might enjoy buying equity.

Oakmount has provided capital for London-listed Tasmanian miner NQ Minerals, and its expansion plans outside the island.

And it has also helped fund the pre-IPO development of Australia-focused InterGroup Mining, owner of the wonderfully named Brilliant Brumby and Brandy Creek gold projects.

“We’ve raised extensive amounts of capital for both of those businesses so that they have been able to go on and broaden their mining tenements and assets in both Tasmania and Queensland,” says King.

“In doing this investors earn an attractive yield on their invested capital and there’s the addition of significant upside potential from a capital growth perspective.”

NQ is looking to move its listing to the LSE from the Aquis exchange in the near future, providing it with a new investment audience, while InterGroup is preparing to float in the UK this summer.

Oakmount’s third major current investment is Direct Energy, a hydrogen play focused on green, clean power generation and solid oxide electrolyser cell technology, which, King says, “adds an extremely important green element to the basket of assets”.

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The companies all have one thing in common – the backing of serial entrepreneur and venture capitalist Walter Doyle. Adding some spice at NQ is the involvement of the irrepressible David Lenigas.

“We have excellent relations with Walter and the team. We only work with them. We know their products, and they inspire confidence across our broader community of investors,” says King.

There are two defining characteristics about the way Oakmount does business that marks it out from other boutique investment houses – the level of personal due diligence done on the assets and the laser focus on just a small handful of opportunities.

On the first point, King explains: “We have feet on the ground. Our interest goes way beyond just looking at a corporate prospectus that is glossy but lacks detail. We have to understand the asset, the industry and the management.”

Being able to keep on top of the fine detail, an approach that befits a former tailor, means Oakmount “doesn’t look at wide diversification”.

Oakmount’s passion for success

“Ultimately, you can leave yourself a little bit thin on the ground if you invest in too many opportunities,” King says.

“If you understand your asset allocation and the marketplace, then a handful of options is perfectly suitable for our family of investors.”

In doing this, King and the Oakmount team aim to…