If you think about an investment risk pyramid which provides direction on portfolio strategy, low risk, low return is at the bottom and high risk, high return is at the top which means venture capital, which is a subset of private equity, will sit at the tip of the pyramid. One of the features of investing in venture capital, which is not present in most other assets, is that there is some chance of achieving completely outsized returns. The second feature is that venture capital investments are anticorrelated, which generally means that when assets like the share market are going down, venture capital isn’t.
This brings us to deep tech, which some say is the venture capital of venture capital. By definition, deep tech companies are exploring the frontier of what’s possible which means they have different drivers. Deep tech is really exciting. We’re investing in new kinds of medical treatment which doesn’t exist today, new forms of energy generation that will benefit our environment and technologies that will secure the world's food source. These are technologies addressing problems that haven’t been solved but which are important societally.
Our ethos is that if we can invest in solving some of these globally significant problems, then we can create value and impact.
