We invest in Mongolian companies that have the potential to grow to international scale and profile. Our target companies are especially well-positioned to benefit from Mongolia’s mining-driven growth, and also from public investments, government policies and programs. They tend to be promoted by proven management teams and have the potential to implement industry-specific winning strategies that we have vetted.
We generally look to invest between 5 and 10 million dollars from the Fund and offer to the fund's investors opportunities to co-invest alongside us. In addition, we can raise for our portfolio companies additional loan financing at favorable terms and equity investment from our investors as well as from outside sources. The target holding period for our investments is between three and five years. In most cases portfolio companies use our funds to make key investments in improving business processes, human resources, structures or technology. In most of our transactions we expect ourselves or specialist co-investors or affiliates to contribute the necessary expertise to portfolio companies through active board, executive and business development roles.
Our preferred exit is through trade sales to strategic entrants into the rapidly growing Mongolian economy. Though the Mongolian stock exchange is at a very early stage of development, we believe that it will offer attractive initial public offering opportunities, for mid to large-sized Mongolian companies over the medium-term and will have much more liquidity than at present. In some cases buy-backs from the operating partners might offer the most attractive exit options. We draw upon our strategic tie-ups with financial institutions and business contacts to achieve effective exits. In most cases an exit strategy with a specified timeframe, targets, and milestones is agreed with managements of portfolio companies, at the time of the investment.