Safran
We recently bought Safran, the French-listed aerospace and defence company, into our global equity fund.
Safran meets our investment criteria in that it is a leader in the design and manufacture of jet engines, and currently sits in a very attractive market: there is sales growth from the trend of increased travel, and high technological barriers to entry.
We consider it to be well-managed, with steady investment into research and development and a CEO and CFO both with engineering backgrounds.
The best part of Safran’s business lies in its maintenance services, which provides ongoing profitable cashflow long after the initial engine sale, and has strong pricing power on spare parts.
Safran also serves the defence industry, which is experiencing faster growth especially in Europe, which is Safran’s main market.