Our investment approach
We use a high-conviction approach to make strategic and substantial equity investments in a small number of companies that offer high potential returns.
Our investments generally fit one of the following categories:
- • Direct investment in early-stage or mature businesses with low entry prices and clear pathways for accelerated revenue and capital growth within 12–24 months.
- • Incorporation, mergers or acquisition of publically-listed, distressed, suspended or otherwise unlisted companies that meet our investment criteria.
- • Short-term opportunistic arbitrage and trading opportunities.
Actively managing risks
We have an opportunistic appetite for higher-risk transactions that offer strong short to medium-term growth potential.
We seek to identify, mitigate and actively manage risks by using our:
- • deep understanding of our chosen industries
- • due diligence and analysis
- • deal structuring and funding skills
- • building sustainability and competitiveness through customer, supplier and investor relationships
With every investment we make, we have a clear and pre-determined exit strategy that’s typically based on key events.
The companies we invest in have typically experienced one or more distinct ‘special situation’ events, such as:
- • A period of significant accelerated growth
• Business expansion or transition events
• Maturity and liquidity events
• The need to access immediate and significant levels of capital for bankable projects or non-conforming higher risk opportunities.
We believe these events provide excellent opportunities to invest in strong and well-managed businesses at a low entry price.
Investment Case Studies
Syn Dynamics Australia Pty Ltd (SDA)
|Status||Active & developing to ASX listing|
|Sector||Waste Processing & Renewable Energy Production|
|Investment||$1,775,000 (80% equity holding)
$1,025,000 + $750,000 convertible note
Syn Dynamics Australia Pty Ltd (SDA) has developed and patented a breakthrough, next generation plasma gasification technology with significant application in the global hazardous waste remediation and renewable energy industries.
SDA’s proprietary technology converts a wide range of carbon-based waste material into synthetic gas calld ‘syngas’. Syngas is a global commodity with a wide range of uses including various forms of renewable energy and as a fuel or feedstock for chemical manufacturers.
The technology has been developed over a 10 year period and solves the issues of chronic storage and insurance costs for hazardous and toxic waste generating heavy industries, while addressing large balance sheet liabilities associated with environmental and public health risks for large waste producers such as oil refineries, petrochemical manufacturers, mining, metals and pharmaceutical companies.
Compared to other clean tech or brown-to-green technologies, SDA’s technology has breakthrough cost, performance and implementation advantages presenting mass scale adoption opportunities in huge addressable global markets.
Unlike other brown-to-green gasification technologies, SDA’s technology is able to convert 100% of waste material feedstock into syngas. Other competing technologies typically achieve conversion rates of between 30% - 50%, operate only at mega station scale (such as power stations) due to their high energy consumption and produce tars and toxic chemicals such as dioxins hence limiting their adoption.
SDA’s patented plasma hyro-pyrolisis technology has been designed to address the performance, efficiency and scale characteristics of existing gasification technology with the objective of optimizing conversion, cost and accessibility requirements of the global waste mass markets.
Global best practices R&D facilities - SDA has successfully completed it’s 12 month R&D and Commercialisation Project with the Commonwealth Scientific and Industrial Research organization (CSIRO) and extended it’s working relationship with global domain experts CSIRO for continuous testing and R&D activities.
Global best practices specialist engineering team – SDA’s global design and process engineering partner is first-in-process engineering specialist Advisian Pty Limited (Advisian) for it’s reactor design and process requirements with a management and supervisory role for SDA’s plant procurement and fabrication requirements. Advisian is a wholly owned subsidiary of market leading global consulting engineer firm Worley Parsons Limited (ASX:WOR).
20FOUR Media Holdings Pty Limited (20FOUR)
|Status||Active & developing to ASX listing|
|Sector||Digital Media Production and Sales|
|Investment||$2,125,000 (39% equity holding)|
20FOUR is a sports-focused digital media business whose business model provides fans with exclusive behind the scenes stories in the form of curated athlete feeds and content categories personalizing fan access to their favourite sports stars. The content consists of athlete generated stories and studio produced content delivered via 20FOUR’s App-based platform and mobile website as well as it’s social media platforms. Chapmans has a strategic 39% direct equity interest in 20FOUR.
As a one stop talent, creative, production and media distribution house, the business solves a number of critical problems faced by media agencies and brands when looking to engage professional athletes for commercial purposes including speed to access and secure talent, speed to create and produce content, costs and access to large and highly engaged audiences and distribution channels.
The platform provides sports stars with access to a legitimate new form of income and gives advertisers and brands an entirely new means of reaching millions of fans, quickly and efficiently.
The company’s business model is based on the traditional media pillars of selling audience reach to big brands with key new media differentiators of:
• Smarter commercial model - Paying much less for exclusive media assets than broadcasters by acquiring sports star mobile and social media rights as opposed to mainstream broadcast rights for games
• Captures larger audiences - Leverages larger, more measurable and engaged audiences than free to air and subscription TV audiences
• New and exclusive content channels - Exclusive athlete generated content plus exclusive sponsored content publishing the off-field stories and journeys of professional athletes
20FOUR is a highly scalable business with an exceptional executive team and board consisting of proven experts in sports and social media sales, marketing and production combined with global talent management.
The 20FOUR app is available on the Apple and Google Play stores.
Since the Company’s last ASX Update on 20FOUR of 22 August:-
• The business now has a combined audience of over 18 million social accounts
• The business has logged more than 10 million video views across the 20FOUR App, website and social channels since it’s launch on 21 April with month on month growth of more than 80% .
• The business has completed a number of large scale commercial campaigns involving 20FOUR athletes with athlete generated content and studio produced content for high profile big brands generating significant revenues with a commercial pipeline that continues to reflect fast growth and engagement with more than 45 global and local media agencies and big brand advertisers.
Fantasy Sports Group Limited (FSG)
|Status||Actively seeking exit|
|Sector||Gaming and Media|
|Investment||$5,000,000 (12.30% equity holding)|
FSG is an innovative sports gaming product business with unique player value database, fantasy sports and sports lotto products. The company has a unique business to business model that optimizes revenues for its database and product innovation by leveraging into the large marketing budgets and customer bases of the major global sports betting companies (wholesale customers) as well as white labelling it’s products to large companies such as sporting clubs, franchises and large corporates (enterprise customers).
Significant demand for FSG’s enterprise customer offer from leading sporting franchises, retailers and big brand corporates also exists.
The company has recently expanded it’s activities to India where it is experiencing strong user growth. FSG will continue to expand to other key international markets including mainland China within the next 12 months.
MJ Life Sciences Pty Ltd
|Status||Active & developing to ASX listing|
|Sector||Medicinal Cannabis & Biopharma – IP, R&D and commercial development|
|Investment||$631,313 (50% equity holding)|
MJLS is an Australian special-purpose company established with the aim of becoming a leading global medicinal cannabis holding and investment company. MJLS is a direct investor in Caziwell Inc., owner of the established North American medicinal cannabis brand and business Aunt Zelda’s, with convertible note rights of up to 49.99% in Caziwell Inc.
Prior to Chapmans’ investment, MJLS had been founded and owned by three of the leading principals in the rapidly expanding Australian and global medicinal cannabis industries – Harry Karelis, Jason Peterson and Dr Stewart Washer – between them founders and/or directors of Auscann Group Holdings Limited (ASX:AC8), Zelda Therapeutics Limited (ASX:ZLD), CannPal Animal Therapeutics Ltd and specialist cannabis medical clinic operator CliniCann Ltd. Combined they have strong regulatory, technical, operational and transactional experience in the medicinal cannabis sector (see following page for brief bios of Messer’s Karelis, Peterson and Washer).
Chapmans views the opportunity to invest directly in MJLS, and have direct exposure to its future investments in the rapidly growing global medicinal cannabis sector, as being strategically advantageous and consistent with it’s high conviction and capital growth investment philosophy.
The MJLS investment represents a significant value accretive transaction for Chapmans which paves the way for a strategic long term partnership with MJLS.
MJLS expects to secure further compelling medicinal cannabis assets in the near term and list on the ASX by IPO or RTO in 2018 .
Digital4ge Pty Limited & Visual Amplifiers Limited
|Status||Successful Exit completed – 8 Nov 2017|
$750,000 (15% equity holding) + $150,000 (direct investment in VAMP)