Our Biggest International Investment Is Up 58%: Time To Sell?

Our largest international investment, Patria Investments (PAX), has been surging in value lately and just crossed the $15 mark.

Data by YCharts

It has earned a 58% total return from its lows in just 6 months.

This has led many of you to ask me whether now would be a good time to sell and take our gain.

My answer is no.

I cannot time the market, and PAX (just like any other stock) may well drop back down before it eventually continues its recovery, but in 5 years from now, I am confident that it will trade a lot higher than today.

Therefore, if you can shut out the noise, ignore the volatility, and focus on the long-term, I think that this remains a great buying opportunity even at these levels.

And the reason why is simple:

I think that the company has a path to roughly doubling its FRE per share over the next 5 years, all while paying its 4% dividend yield, and I expect the market to also reward its future greater FRE with a much higher multiple.

Putting all of this together, investors have the potential to earn a 2-3x over the next 5 years with fairly conservative assumptions, all while also gaining valuable diversification benefits to their portfolio, which makes the risk-to-reward very compelling.

Here you might ask yourself the following two questions:

• How do they double their FRE per share over the next 5 years?

• How do they reach a higher FRE multiple?