Ethical business is good business
Customers increasingly want services and products that align with their ethical values. Purchases are no longer just about consumption – they say something about a customer's identity. Supporting these values creates affinity, loyalty, and trust.
Ethical and purpose-driven companies are reaping the rewards: growing revenues, enthusiastic customers, happy employees, and supportive shareholders.
of consumers purchase from companies that reflect their personal values & beliefs
of consumers want companies to take a stand on social, cultural, environmental, & political issues
of executives believe a strong collective purpose drives employee satisfaction
Our overall emphasis on ethical investment includes specific sharia-compliant funds. We see investment opportunities in sharia-compliant companies as part of the broader trend of ethical consumerism, a trend that Muslims are well suited to lead because of Islam's established ethical standards of business and commerce.
We are interested in Muslim lifestyle companies (food, finance, fashion, travel, and others), but we see bigger opportunities for companies that are sharia-compliant while appealing to Muslims and non-Muslims alike because of ethical standards and quality of services and products. These are the primary investment targets for our sharia-compliant funds.
Many Islamic values – for example, social responsibility, fairness, and justice – have universal appeal. We already have seen non-Muslim customers flock to sharia-compliant products as a result.
Long-term value creation
While we offer ethical investment opportunities through traditional time-limited equity funds, we prioritize permanent capital vehicles (evergreen funds) because we believe these provide the time and space needed to deploy long-term strategies that build better, lasting companies and value. This investment structure empowers portfolio companies to focus on long-term sustainability rather than the unrelenting pressure of fast growth and profits, which too often leads to unethical behaviors and bad business decisions.
In an evergreen fund structure, profits flow back to the fund for additional investments in ethical companies; investors reap regular, generous dividends and predictable cashflow; and portfolio companies can focus on building great businesses.
Building ethical ecosystems is key
We believe sustainable value creation depends on supporting ethical ecosystems in the countries in which we invest. To that end, we focus on companies with high growth potential that also contribute to building ethical business environments. We also build and support programs for local entrepreneurs interested in creating ethical businesses.
Global platforms are a priority
Sustainable value creation in an interconnected world requires global reach. This is why we prioritize investing in platforms like fintech, which can provide services to customers across borders.
Our investments typically emphasize advanced technology, although this is not an explicit requirement. All of our portfolio companies, however, must be at least tech enabled, even if they are not technology platforms. We remain convinced that this is essential for competing in global markets.
Frost Capital is a private equity fund manager and investment advisor with offices in Palo Alto, Washington DC, London, Riyadh, and Kuala Lumpur.
We are affiliated with Frost & Sullivan, a 50+ year old global research and consulting firm with over 1,000 analysts in 45 offices across the world serving more than 10,000 clients (including 98% of the Fortune 1000). Together, we conduct research on over one million companies per year, whittling them down to the very best investment prospects through multiple rounds of research and due diligence.