DISCIPLINE & PATIENCE, HIGHLIGHTING OUR INVESTMENT IN ARCOS DORADOS

Elevation Capital Value Fund: We would like to highlight our investment in Arcos Dorados from February 2014 to March 2018 (4.1 years) to showcase our long-term orientated investment process and the need for patience and discipline when undertaking a value-based investment approach.

Arcos Dorados is the world’s largest McDonald’s franchisee, with over 2,000 restaurants in Latin America and the Caribbean. The company was first listed on the NYSE in 2011 (during the last emerging market boom) at an elevated valuation of more than 20x EBITDA. We acquired an initial shareholding in Arcos Dorados in 2014 after its share price had declined by over 60% to a level where we believed it offered long-term value. As the chart illustrates below, one had to have a tremendous amount of discipline, patience and conviction in the value of the assets owned by the Company, particularly the valuable real estate the Company held as the stock continued to decline by over 70% from our initial purchase price. We exited the position in March 2018 and locked in an attractive IRR over the life of the investment which enabled us to recycle the proceeds into newly out-of-favour companies in the form of H&M, Kraft Heinz, and CBS Corp to name a few.

See our presentation on Arcos Dorados here.