Member Info for sageoflondon

Yes that (Graphcore) could well be a buy. I can't see it listing in the UK. It's likely to be huge in terms of value so it will likely go Nasdaq or be taken private by a larger player out there. There is also a risk it's eventually considered strategic.

I am banking on a NAV of £7.50 to £8.15 on results - there will be some 'audit' conservatism on some of the valuations. I see the share price at something between £8 and £9.15 after those results - depending on market conditions, if things remain roughly stable then towards the £9 mark. I do however see lower growth in valuations over the course of the next 12 months. I think we might be lucky to grow NAV by 10% 2021/22.

It's interesting that the British and Irish governments have a stake in this company - British Business bank, National Treasury Management Agency, along with Brunei!

Trustpilot is flying, up around 20% on float price. I really like the business model. I am a little annoyed at myself that I didn't make a small direct investment (which I was thinking about at 265p). It will be a slow burner, but 10 years from now it will be worth 2 to 5 times it's current value.

Interesting to see Richard Griffiths increase his stake here. Quite a prolific investor and founder of Evolution (Broking House). Now runs his family office out of Jersey and has certainly amassed a sizeable investment fortune over the last 25 years. Over 5% of the company now.

I have a little HGT, a little PEYS as well. If GROW bounces, I might slice a little. It's all part of a portfolio though so I'm not too concerned about movements on one piece of it, unless I expect them to be big or something is wrong. I have plenty of volatility from some of the individual holdings in my portfolio. A lot of these were added back in April / May 2020 as I was holding around 70% cash back then.

The way I see it, there will be rises of more than 20%. We have gone up 160% against the 2020 lows. I don't see 8% in a smooth line, rather up 30%, down 22%, etc. Vehicles like this are very volatile in times of trouble, hence why you often see considerable discounts to NAV in market pullbacks, and rarely big premiums. If the pullback relates specifically to listed technology we will be impacted quite significantly as well in my opinion - especially if we stay invested in a number of our investments when they list. Time will tell on that one. A lot of what we are invested in (and the valuations) price in a considerable amount of growth. That's fine, that's why I am invested here - but it's always going to be very volatile and returns will be very lumpy, ranging from amazing, to roller-coaster inducing bouts of feeling sick as it plunges when things get nervy. Nature of the beast. In time it should track NAV. That's the market! There is also the probabilistic nature of the investments, some will fly and some will go to zero (hopefully not loads of this, but the nature of VC) which again increases volatility.

Even if you look at what Cazoo have to offer, Cinch appear to have a lot more choice re stock. Only time will tell on that one. I am anticipating the share price oscillating between £8 and £9 for the next 6 to 12 months, barring any significant news on core underlying investments / NAV impact. Obviously news can and will happen that could change this. Content to hold for steady long term growth. If this manages 8 to 10% per annum for me over 10 years that is sufficient.

I'm not at all convinced there is any justification for a 70-100% premium to NAV. HGT has a largely unlisted portfolio, a significant amount of which is tech related. It trades at a very small premium to NAV - like 4% and when the overall market gets hit it normally goes to a low double figure discount, in line with a lot of PE type trusts. Are there any examples of trusts or investments that suggest a 70-100% premium to NAV would be justified? Personally I think there will be a decent uplift in NAV when we report, but I think any premium the market assigns to this will be moderated by the view that not all tech will result in a world beating new way of doing things. I think there will be significant caution at present in bidding something like Draper up significantly over NAV. Whilst I will continue to hold as my largest holding, I am not expecting fireworks over the course of the next 12 to 18 months in this share. I think progress will be made when there is clear evidence that portfolio valuations continue to move forwards consistently. Cazoo is yet to be proven in my view and we have yet to bank significant cash out of that based on my understanding. There is a risk that it tanks (not so much risk with Trustpilot in my view and I believe we have a much larger percentage of this) and we get burned off the back of it.

Hwang used significant leverage it appears - never good unless you either get lucky or know when to walk away. No need for the level of leverage either. Why use money you need to chase money you don't need. I believe he was already a billionaire.....

I'm not sure I agree that we have no future growth priced in. The valuation of every portfolio company has growth built in - no way Cazoo is worth what is currently valued at without growth priced in. That growth isn't worth as much if rates go up significantly and we would likely take a NAV hit.

What has surprised me this morning is that DMGT goes up 10% almost on the back of Cazoo and we don't move at all. I know they have a much larger stake than we do, but we haven't moved a bit. I am sure more of the detail will come out in terms of stake / valuation etc as time passes.

There is also the danger that we are at the absolute top of the market in terms of valuations / flotations. The danger then is a big uplift in 2021, followed by a decline in 2022 with a more general market pullback. It could happen - I will be very surprised if it's all a one way street and it is very unlikely to be linear, more likely to be up 40%, 15%, down 30% etc. These types of companies will be volatile in terms of valuation. The uplift for the end of March should however be very good. I have a decent sized stake in this, my largest investment. I never have a limit of 10% for any one company share - even if there is diversification within the portfolio.

I have to say I am somewhat surprised they have got Cazoo away at that sort of valuation - but impressed as it benefits us. Maybe there is something I am missing with that business and it has a lot more potential than I can see - it's almost like the used car market is suddenly much more profitable and all of the competitors are going to go away. If a couple like Cinch and Cazoo become global then I can see the valuation and eventually moving into new cars as well......who knows. Something like Trustpilot has few genuine competitors and the potential for very high margins and growth going forward. Just didn't see Cazoo at that valuation.

Are there any competitors or similarly structured funds that trade at such a premium to NAV? It's depends where you believe this is aligned to - e.g. is it aligned to something like HGT etc? Normally a private equity fund (with which this has many similarities) trades at a discount rather than a premium to NAV, even when targeting circa 10% to 15% NAV growth annually. There is normally a discount to NAV. I'm not saying you are incorrect, just interested to understand a little more about the rationale for trading at 70% to 100% above NAV?

Interesting that our SP didn't shift up a little more. There must have been a fair bit of Trustpilot expectation baked into the current SP - that or no one really picked up on it - which I find hard to believe in this modern age. Arbitrage opportunities generally get shut down very quickly indeed.

Trust Pilot could have a decent impact one way or the other. If the float goes well and settles at a premium. Obviously we don't know just how much of their stake Draper will sell. Given the amounts being banded about it looks like the current investors will be selling a reasonable stake. Interested to see how things go when the announcement comes.

I would imagine it's a done deal now. Way too much money spent in fees and the like to change the direction of the Trustpilot float.

Trustpilot - shares are due to begin trading on Tuesday next week. The shares will be offered between 250p and 265p, with a view to raising £434m, valuing the company at 1.08bn. USD 50mn of new shares to pay down debt, meaning the remainder of the sale will come from existing holders. This looks like it might be a significant sell down for Draper. We don't know the impact on the value of our holding obviously.

The last RNS indicates that Armor purchased 3% - this doesn't make sense to me. They were already a significant shareholder so not sure if the actual disclosure is accurate or not. There is no disposal noted.

Decibel is a small component of Draper's portfolio. Not sure how small. I think US technology is going to get battered. It won't leave us untouched. Tesla will eventually be a bloodbath in my opinion. Nothing wrong with the company at all, apart from the valuation based on whatever metric you use.

There has been mention of this a number of times over the course of the last 18 months or so. Would be good to see it land on the UK stock market for once as well. Good company with great potential. I'm not sure exactly how much of the company Draper owns. I believe the last valuation was around the £65m mark. That's a fairly sizeable stake if we are talking about a £1bn valuation. I have no idea what it is currently valued at in our books etc or how much uplift would be provided by a valuation of £1bn? Anyone else with a better idea than me?

I think Grow also put in money in the June 2020 £25m round (series C) and series D £240m funding in October. We can't have put too much in during the later rounds ? Not sure how much and when as not all disclosed is it?