Venture capital returns take time to emerge. Augmentum Fintech (“AF”) is a relatively new fund, yet we already see material embedded value with some well-established, highly profitable investments – such as interactive investor. Its dedicated focus on Fintech eliminates distraction. Appraising several key investments individually, and using balance sheet carrying value for others, we calculate longer term fair value at 1.6x FY20 NAV – likely nearer 2x, with value outside the scope of our appraisal.
Companies: Augmentum Fintech
Recent years have seen companies opt to remain private for longer; due to their ability to access capital from alternative areas and to remain free of the increasingly burdensome requirements of being listed. The implosion of the Woodford Equity Income Fund as a result of liquidity problems has shone a negative light on open-ended funds holding stakes in private companies. However, the capacity to hold illiquid assets is one of the key characteristics of the investment trust structure. In this article we assess the advantages and disadvantages of holding minority stakes in private companies, and the impact that being re-valued periodically can have in a market characterised by wild swings in sentiment; which is perhaps of most relevance in the current market.
Companies: MERI USA SMT FCSS RCP EWI AUGM
Augmentum Fintech (AUGM) aims to generate capital growth over the long term through investing in fast-growing and high-potential financial services technology businesses based predominantly in the UK and continental Europe. Currently the portfolio constitutes investments in 18 companies, loosely grouped into banking services, ‘rails & infrastructure’ and asset/wealth management. This is in line with the objectives made at launch, with the anticipated number of holdings being between 15 and 20. The managers of the trust are Tim Levene, Richard Matthews and Perry Blacher. They provided an update on the portfolio on 20 March, discussing the potential impact of COVID-19 on a number of their investee companies. They noted that companies representing c. 40% of NAV have experienced higher demand than in previous months. As with any portfolio, there are likely to be those negatively and positively affected by the current crisis. Given the likely fall in overall business activity, our view is that it is perhaps fair to say that Zopa and iwoca – as lenders – could potentially be negatively affected by business failures. On the other hand, BullionVault and Grover look likely to be beneficiaries. AUGM formally values its portfolio twice a year, the next valuation date being 31 March 2020, with the results expected to be announced in mid-June. The share price has been seriously impacted by recent market falls so that the discount, compared to the 30 September 2019 NAV, has reached c. 50%. The board has very recently exercised its buy-back powers for the first time, and bought back 50,000 shares.
US Solar Fund – Acquisition | Augmentum Fintech – Publication of prospectus
Companies: US Solar Fund ¬¨¬®¬¨¬£ (USFP:LON)Augmentum Fintech (AUGM:LON)
Augmentum Fintech – Proposed placing
Augmentum Fintech – Additional investments | LXi – Results of fundraising
Companies: Augmentum Fintech LXI REIT Plc
Augmentum Fintech – Finals to 31 March 2019
Augmentum Fintech – Notice of general meeting | John Laing Environmental Assets – Investment adviser change | Foresight Solar – Group acquisition | Gore Street Energy Storage – Finals and proposed fundraising
Companies: AUGM JLEN FSFL GSF
Augmentum Fintech (AUGM) will publish its first full-year report on 11 June 2019. Since its IPO on 13 March 2018, the company has deployed its capital successfully and is now 73% invested with £15m of cash earmarked for follow-on-opportunities within existing portfolio companies. In 2019, the company has made four additional investments, a £7.5m investment in SME lender iwoca and a £4.0m investment in legal services platform Farewill as well as a £4m investment in Onfindo and a £0.9m investment in Intellis.
Augmentum Fintech – Company update | Merian Chrysalis – 31 December NAV and portfolio update
Companies: Augmentum Fintech Merian Chrysalis Investment Co., Ltd.
Merian Chrysalis – Starling Bank grant award | Augmentum Fintech – ClearBank/Tide grant award | Aberdeen Standard Euro Logistics Income – Q4 2018 NAV | LXi – Accretive acquisition
Companies: MERI AUGM ASLI LXI
AUGM* – Augmentum Fintech – Investment in iwoca | PHP – Primary Health Properties – Proposed merger with MedicX (MXF) | CCSL – Chenavari Capital Solutions – Annual report
Companies: Augmentum Fintech Primary Health Properties Plc
AUGM* - Augmentum Fintech - New investment | CAT - CATCo Reinsurance Opportunities - Investment manager update | MGCI - M&G Credit Income - Proposed placing
Companies: Augmentum Fintech M&G Credit Income Investment Trust Plc
Augmentum Fintech - Interactive Investor IPO ambitions | Hipgnosis Songs - Portfolio update
Research Tree provides access to ongoing research coverage, media content and regulatory news on Augmentum Fintech.
We currently have 26 research reports from 4
Cenkos’s first half results demonstrated the benefits of its flexible operating model and strength of its client relationships. While challenges related to COVID-19 are set to continue, Cenkos’s focus is on growth companies and its fund-raising year-to-date has had a greater emphasis on corporates financing M&A and growth opportunities rather than for defensive purposes. This should prove more sustainable although, as always, the timing of transactions in the encouraging pipeline reported remains uncertain.
Companies: Cenkos Securities plc
Following on quickly from its impressive full year results, these interim results confirm that our confidence for growth in the Program Management business was not misplaced.Contracted Premium increased 95% YoY (and 12% ahead of December 2019) to $925m –a stone's throw away from the $1bn 2020 guidance set in 2018. At the same time, Gross Written Premium (GWP) grew 42.6% to £247.2m, resulting in Economic EBITDA turning positive, at £0.8m compared to a loss of £0.3m in 1H19
Companies: Randall & Quilter Investment Holdings Ltd.
Primary Health Properties (LON:PHP) is a real estate investment trust (REIT) that holds a portfolio of 510 primary health facilities in the UK (92% of the portfolio by value) and Ireland (8%). The business model is to manage the properties for rental income and to grow the portfolio over time. The
Companies: PHP PP51 PHPRF
Record’s Q221 trading update confirmed that its new $8bn dynamic hedging mandate has started and that, prior to this, assets under management equivalent (AUME) expanded by 4% in the quarter. The group continues to work on developing new products and is deploying technology to enhance its ability to deliver these and existing products cost effectively.
Companies: Record plc
Cenkos Securities plc has terminated coverage of Record Plc. Our previous recommendation (BUY) and forecasts can no longer be relied upon.
Please contact Cenkos for further information.
What’s new: Today’s trading update reveals 17% rise in assets under management (AuM), double digit revenue growth, and an increasing operating margin as the business scales. The outlook is positive. Highlights are:
12.6% rise in 1H Group Revenues to £11.0m (1H last year: £9.7m);
21.9% rise in 1H adj operating profit to £5.0m (1H last year: £4.1m);
17.4% rise over 6 months in AUM to £7.8bn on 30 September 2020,
n.b. From 31 March 2020 the WMA balanced index rose 11.6% to 4510;
- Market movements added 12.5% to AUM (i.e. Tatton outperformed WMA);
- 1H net inflows of £328.1bn were 4.9% of opening AUM (i.e. c 10% annualised net inflows);
3.0% rise in Paradigm Mortgage Services member firms to 1,591
2.5% rise in Paradigm Consulting member firms
Interims will be announced on Wednesday, 18 November 2020
Companies: Tatton Asset Management Plc
Tatton has reported an in-line H1 financial performance: revenue totalled £11.0m (vs N+1Se £10.9m) and £5.0m adj. EBIT (50% N+1S FY21e). AuM grew by 3.4% to £7.8bn as net inflows continued throughout H1 (+£328m) – a positive performance given the backdrop. Paradigm, particularly in Mortgages, has been resilient post-lockdown. Having delivered 50% of our earnings forecast for FY21e, there is potential for upside. However, we leave our forecasts unchanged and a margin for safety as we remain alive to potential external risks/volatility.
ANGLE plc (AGL.L): Acceptance of FDA submission | Feedback plc (FDBK.L*): Partnership agreement | Open Orphan (ORPH.L): Human Challenge Study Model contract with UK Government
Companies: AGL FDBK ORPH
The interims confirmed that Covid-19 was minimally disruptive operationally in H1 20 and, ironically, may have improved both of R&Q’s divisions’ mediumterm trading outlooks. As the pandemic and other industry events have generated significant losses for insurers, they have created the current ‘hardening’ market driving demand for Legacy and Program Management.
There was an eclectic mix of property companies to feature in the top price movers for September. Top of the tree was private rented sector and residential development specialist Sigma Capital Group, with a 34.2% rise. The group launched a £1bn joint venture with EQT Real Estate, the real estate platform of global investment firm EQT, to deliver 3,000 private rental homes in Greater London. Micro-cap investor Panther Securities also hit double-digit gains, while Macau Property Opportunities saw an uplift in its share price after announcing debt refinancing and a disposal. CLS Holdings, the investor in offices in Germany, France and the UK, continued to see a recovery in its share price – which has risen 15.1% in the last three months. Off the back of solid results, Berlin residential landlord Phoenix Spree Deutschland saw its share price gain 7.2%. Schroder REIT’s share price rose 6.6% in the month as it embarked on a share buyback programme, while Irish commercial property investor Yew Grove REIT also saw positive shareholder reaction to amending its investment strategy to increase its target loan to value ratio to 40%.
Companies: SUPR DIGS CRC PSDL ASEI TPON RLE UKCM BREI BCPT RGL SIR SLI TOWN CAL
Life sciences is one of Mercia’s areas of focus and investment expertise. Seven of Mercia’s top 20 holdings at 31 March 2020 were in life sciences, valued at £29m in aggregate or 33% of total portfolio value (all of which had originated through Mercia’s third-party managed funds), with another c 40 earlier-stage life sciences investments across its third-party managed funds. COVID-19 has accelerated the opportunity for a new generation of novel and recombinant vaccines. This explosion of potential new treatments will require new diagnostics and bio-manufacturing support to scale supply once they are approved. These are areas where Mercia is already invested.
Companies: Mercia Asset Management PLC
The most pleasing aspect of Tatton’s trading update for the six months ending 30 Sep 2020 (H1 2021) was how robust its fundamental offering to clients (financial advisers) has proven to be in highly uncertain market conditions. It continued to attract strong net inflows into its asset management business while also growing its base of IFA consulting and mortgage services clients. The prospect of beating our previous FY21 forecasts looks promising. Longerterm growth prospects also look strong. We do, however, remain wary of the potential impact of further large market dips. For now, we maintain our fundamental valuation of 300p per share but see room for significant upside on that mark if Tatton continues to deliver.
NextEnergy Solar Fund has low operating costs, low finance costs and has consistently delivered generation outperformance. We estimate that it can sustain its current level of dividend with an electricity price well below today’s price. The shares show the lowest NAV premium of all the UK renewable yieldcos and the highest yield.
Companies: Nextenergy Solar Fund
It was a remarkable second quarter with global markets staging the sort of comeback few would have thought plausible, at the end of March. With some countries still battling the first wave of infection and others seemingly headed to a second, not to mention what happens when governments start to remove direct stimulus measures, uncertainty still abounds.
Companies: NCYF EGL NAIT NAIT THRG GCP IGC HHI JLEN PCT VNH ASLI IBT HRI CSH SIGT
Secure Trust Bank (STB) reported H120 PBT of £5.1m (vs £18.1m a year ago) and a 3.0% ROE. Income grew 4% y-o-y, but impairments almost doubled, and payment holiday charges also hurt. STB notes that since the lockdown ended, business has been rebounding. Its robust capital (CET 13.5%), business model and proven agility allow it to react to the changing lending environment. STB currently trades on a P/BV of 0.49x, reflecting sentiment more than fundamentals given its profitability track record and successful model. Our fair value estimate is 1,704p per share, down from 2,428p..
Companies: Secure Trust Bank Plc