Distilling the Beverage Legacy Diageo

Investors in the Elevation Capital Global Shares Fund own a share of Diageo Plc (DGE:LSE), custodian of some of the largest spirits and alcoholic brands in the world. Included in Diageo’s impressive portfolio are: Johnnie Walker, Tanqueray, Gordons, Captain Morgan, Don Julio, Crown Royal, Baileys, Guinness and Smirnoff. The brand efficacy and history contained within Diageo’s portfolio is unparalleled and has helped to establish Diageo as the global leader in the drinks industry. 

The Elevation Capital Global Shares Fund previously owned Diageo from 2014 to 2018 delivering a net return of +58.96% (+16.49% per annum). The COVID-19 pandemic has hit the spirits market particularly hard as consumers have been prevented from attending social gatherings and restaurants - two of the key points of sale for alcoholic consumption. This alignment of negative forces presented the opportunity to acquire Diageo at an attractive discount to our sum-of-the-parts valuation range of £36.82 to £43.92, offering +48.40% to +77.02% potential upside from the Elevation Capital Global Shares Fund’s latest cost basis.