QGV Investment Philosophy Explained

At Valcreate, company selection is driven by Valcreate’s GQV Investment framework, which defines the quantitative & qualitative aspects (focus on business growth, quality & valuations) we consider as part of identifying stocks for investments.

Our Investment Approach helps ensure that we only invest in the highest-quality investments for our investors that have gone through a rigorous fund selection process.


We believe that growth is the primary driver of business value creation, and we accordingly seek to invest in companies with sustainable medium-to-long-term growth potential. Within the context of the economy, in which the company operates, we focus on the medium-term growth outlook. We aim to identify specific trends that support growth outperformance to the economy.

The aim is to invest in companies with the potential to drive capital-efficient growth, and not in companies that require large debt or equity raises to drive growth.


We seek to invest in companies with competitive advantages, solid management teams, and a history of prudent capital allocation.

Coined by Warren Buffett, an economic moat refers to a sustainable competitive advantage that allows a company to protect its market share and fend off potential competitors. Moats function by creating barriers to entry for potential competitors thereby providing pricing power to the company and the ability to sustain high profitability over the long-term. We find moats in the form of intangibles (brands, IP, Tech), network effects, distribution and cost leadership.

Our focus is also on the quality of corporate governance and accounting standards. Strong corporate governance acts as a shield against potential risks. By establishing robust internal controls and risk management frameworks, companies can minimise the likelihood of financial irregularities, accounting shenanigans and unethical practices in turn protecting the minority shareholders.

High ROEs and ROCEs, good cash flows, low debt/strong balance sheet and resilient operating margins are all signs of the quality of the business. Understanding the factor behind such attractive numbers is one of the key tenets in evaluating the quality of the business.


Finally, once we identify the growth and quality aspects of the business, we seek to identify an undervalued investment relative to its intrinsic value. The essence lies in buying assets at a discount, with the expectation that their true value will be recognized over time. Simply put, we look at buying high-quality businesses, with clear growth potential that are available at the right price.

We recognize that business value is intrinsically linked to quality & growth. We accordingly are willing to pay higher multiples for better-quality & higher-growth businesses.

We will avoid paying astronomical valuations, where we believe that quality & growth are being overpriced. We will also avoid value traps – businesses with weak growth prospects, lower quality businesses or companies with poor management/governance track records.

Negative Screening

We believe that negative art is just as important an element in stock selection, as identifying companies to invest in.

Therefore, we do not seek to invest in:

  • Asset-heavy industries especially the ones that have no precedence of generating a decent return on capital around the world,
  • Industries with evident disruption on the horizon
  • Industries with high dependence on external environment/single vendor
  • And finally, companies with murky management and accounting practices.

This allows us the bandwidth to focus on the fertile base to find incredible companies.

GQV in a Nutshell

Finally, to us, attractive investment opportunities are such:

  • Great promoters with strong capabilities in capital employment, good corporate governance and no financial shenanigans
  • Great business, potentially existing in a favourable industry structure, that grows at an admirable rate, ideally gaining market share, and generates a strong return on capital employed/equity with durable moats to fend off potential competition
  • Is available at reasonable valuations considering growth potential and return profiles.

“A dreamy business offering has at least four characteristics. Customers love it, it can grow to a very large size, it has strong returns on capital and it’s durable in time – with the potential to endure for decades. When you find one of these, don’t just swipe right, get married”.

Jeff Bezos in his 2014 letter to Amazon shareholders