On the margin of distribution.

A commonplace among capital allocators in frontier markets is that the margin lives in production. On examination, the margin lives in distribution — the chain of handling, haulage, storage, and delivery that separates produced goods from paying markets. In mature economies each distribution link extracts a toll of roughly five percent. In sparse markets the toll runs fifteen to thirty. The producer is the asymmetric bottom of that cascade.

The asymmetry is not accidental. Distribution infrastructure — ports, inland depots, cold chains, last-mile corridors — takes years to build, requires capital on duration the operator economy rarely carries, and compounds in value as adjacent sectors develop. Production capacity, by contrast, can be expanded quickly and is routinely over-built. Scarce capacity takes rent; abundant capacity does not.

Cold chain is the single sparsest link in the Kenyan distribution stack. Premium agricultural exports — horticulture, protein, specialty crops — are capped at what the cold chain can deliver intact. Expanding cold-chain capacity does not just add a distribution link. It creates premium-market optionality across multiple upstream sectors simultaneously — horticulture, dairy, meat, specialty produce, high-value processed goods.

Infrastructure positions do not return like operating businesses. Priced as operating businesses they appear expensive. Priced as optionality on entire sectors they are systematically under-valued. The firm underwrites them on the second basis — the only basis consistent with how they actually behave through a full cycle of upstream development.

The position that owns one infrastructure link captures its toll. The position that owns the chain captures the composite. Both are durable. The second is, in our experience, the single most compounding real-asset profile available in this market.