Our capital

Capital that stays

Grupo Cerne is owned by the two partners who run it, and we are assembling a small group of long-term investors around it.

We are not a fund. The company has no defined life, and there is no date on which we are obliged to sell a business. The capital we raise is capital that stays.

Capital is subscribed deal by deal. Each acquisition has its own timetable and its own completion, as any purchase of a company does. That is the clock of the transaction, not the clock of the investment: whoever comes into a deal comes in with no exit date set.

We look for people who want to own well-run Portuguese companies for decades, and not for a cycle.

Why this matters

We hold what we acquire. Our capital is permanent — there is no fund to raise or return, and no clock running on any company we own. That structure is unusual, and it is the point: it lets us be the buyer a family owner can trust, and the steward a good business deserves.

For an owner, it means our word is not hostage to a fund’s timetable. For a business, it means decisions made for the decade ahead rather than the next quarter.

How we invest

A fair price is a price the company can carry once we are already inside it. We start from the accounts of the last few years, separate what belongs to the owner from what belongs to the company, and look at what repeats every year rather than at the best year. If the number we need in order to justify the price only appears with an optimistic assumption, then the price is wrong, and it is the price that changes. What we believe the company is worth is written down early, before we take up weeks of the owner’s time, and it is not revised at the end. Nor do we put debt into the company to pay for buying it. A company loaded with debt to finance its own sale can no longer buy a van or take on an apprentice the following year, and starts working for the bank instead of for its customers. We buy to keep, which means we are the ones who will live with the arithmetic we do. We would rather lose a deal than close one on numbers that only work if everything goes well.

We do not buy companies in order to fix them. A company that needs saving needs someone inside it full time for years, and that someone would have to be one of us, which would be unfair to it and to all the others. We do not buy ideas looking for customers, because what interests us is precisely what has already been proven over twenty or thirty years. We do not go into auctions: a process designed to set buyers competing almost always produces the outcome we want to keep away from, which is paying too much and promising too much in order to win. And we do not buy in order to resell. If that were the intention, everything we say to an owner about the years ahead would be talk, and he would know it.

How the two of us decide

There are two of us and the two of us decide. Each has his own area and settles the day to day without asking the other’s permission. The decisions that count, buying a company and at what price, are not of that kind: they require both of us to be convinced. If one of us is not, we do not go ahead, and there is no mechanism here to force a tie-break. That is deliberate. Over a lifetime, the cost of letting a good company pass is small and can be recovered. The cost of buying a bad one is permanent.

Documentation

We are not raising capital through this site, and you will find no projections here.

The documentation is not public. It is shared after a conversation and under confidentiality. Pedro Teixeira Duarte, geral@grupocerne.pt, +351 918 330 399.