Member Info for steph

Https://www.telegraph.co.uk/business/2024/04/15/new-york-threatens-londons-fintech-dominance-revolut-chief/

Thannks

Revolut was on our books for 95m year end 2022 and by 2023 results and half yearly results 2024 down to 55m. Even at 55m big success story as we only put in 7m at seed stage.

Note 28 of annual rerpot 2022 say there was a weighted average of 25% discount to last rounds and I imagine the 5m REvolut was on our books for was discounted around that. The range was 15% to 89% so no last round was used too calculate our fair value.

SO any valuation of Revolut near 33bn means we are back to closer to 95m rather than 55m. As yo usay room for NAV/share contribution to growth.

Scary times to invest to be sure. Silly price though to compensate for risk.

1/3rd of average broker 12 month guidance. Sweet. Odds of at least doubling in 12 months probably better than 50%.

Now after this shooting gallery between Iran and Israel we can add WW3 to the ever lengthening list of black swans that could induce the whole market to dive. I’m grateful to the Iranians to not retaliate like for like after the Israeli bombing of their embassy in Damascus. That would have opened up the gates to hell.

What they did was a well signaled “attack” with high expectations of them being shot down before any real damage was done -due to the advanced notice. It was a clever show of force without much in the way of loss of life or damages. So most nations urging Israel to “take the win” and not escalate further. Who knows what crazy Netanyahu will do but for now deescalating. Some real lunatics in his cabinet urging all out war with Iran. They should be in jail and not in cabinet of a nation with nuclear weapons making these type of decisions of war an peace. Way of the world I suppose.

Still so fragile and so easy for a miscalculation to occur. UK was involved in the shooting display, the biggest since the Falklands war for us.

I expect we might go up this week on a relief rally that all out war was avoided -at least for now.

Can we at least beat a global market index? Any mushroom can just grow that way.

For me over the last 8 years the answer is no but I lie in hope of a quick fix via a bounce back of GROW to previous high and beyond within 3 years. With my mushroom strategy luck.

Great i love contrarian postings.

you never know but i think we are on the cusp of a sustainably SP recovery not a new record breaking 8 year low. ive laid put my rational in many postings. good luck all. if you ate more that 50% confident of a new dip why not short snd make money off that?

I highly doubt we will be anything near this low level next year. unique opportunity to level down for me.

Https://www.bnnbloomberg.ca/softbank-considers-investment-or-partnership-with-openai-ft-1.1972354

Https://www.telegraph.co.uk/business/2024/04/07/pensions-giant-create-uk-superfund-boost-jeremy-hunt/

Medium term we are in good shape. GROW as a well diversified trust in unlisted growth companies in the tech sector by geography, sector and pipeline position is in pole position to benefit. Certainly a good choice for 1/3rd of my ISA and very likely to significantly outperform the market over the next 20 years.

Short term who knows. I think we already have plenty of evidence we should be at at an SP of 2/3rds NAV/share not 1/3rd with great prospects to go up sharply from 2/3rds as a base. However that evidence has been there for a year so maybe massive underpricing can last a year longer?? We shall see.

Https://pitchbook.com/news/articles/weekend-analysis-private-equity-fundraising-funds-return

No evidence at all of a declining market so our organic sales growth within our portfolio companies should result in NAV/share upgrades. I hope enough to overwhelm the mild 2’nd half dilution and first half losses.

Wish we had a firm announced sale of graphcore to boost nav/share.

wide range of possible results from modest additional nav/share decreases to modest nav/share increases in spite of modest dilution. at least a 150m nav range of possibility on valuation of whole portfolio -a range that undermines market confidence to be sure.

just need to be patient. at an ago i once asked the q why not more share specific information and reply was that core holdings prohibit it, result is worst of all worlds where in a tight market worst assumed without any of us having the information needed to decisively counter invest. all a big of a stumble in the dark

Fir me the low do has 4 main explanations:

1) we were well overpriced between launch in 2016 and 2022 and are correcting. nav in 20016 to 2020 was overstated.

2) all the exits (nearly half a billion) in 2021 2022 have been wasted when reinvested with little retained value plus test of portfolio doing poorly.

3) we have serious trouble in a majority of the core portfolio and the seed funds, trouble not yet talked about in public realm.

or 5

4) temporary irrational anxiety that will pass

Woodford spooked investors in our sector as well as FCA oversight which is now clearly over the top.

you would think smart money would immediately exploit the arbitrage opportunities of sentiment based low share prices but even in theory they may choisecthe best timing allowing sentiment based declines to play out in full first. some might even deliberately accelerate sentiment based decline in thin traiding to get a better buy in price.

ricardian economics it us not

Very best on the market for an ISA with a 5 year plus time horizon.

what will happen in the next few months, year or two of course uncertain. For my money it will sooner or later (but not later than 3 years) recover to previous SP so I don’t want to be on the platform when the train finally leaves the station.

i thought grow had the closest alignment with my own investment preferences by geography, sector and balanced exposure to the full development pipeline from pre seed to ipo.

i wanted a uk/eu strategy (usa overpriced for vc tech). i though by grow having circa 69 core companies in the different geographies and sectors and over a 1000 seed companies grow was quite diversified already. no need to diversify within the sector further. also i like the fact grow are active portfolio managers often sitting on the boards and nursing seed companies through to funding rounds. should give grow superior stock picking abilities to others who are usually one man/woman fund manager type funds. indeed core portfolio doing better than sector (few failures) but that success not priced in. extra admin costs of active investor-ship minor compared to gains of good quality informed decisions.

i also theorized (falsely) that volatility would be plus or minus 30% of a fairly steady nav/share. i did not see teh circumstances of nav/share downgrades without quite a screw up on key core companies which we have not had. i thought nav/share increases might only flatten in a bad market not dip.

i certainly did not see a 67% discount to nav/share persisting for any length of time as it has for over 1.5 years. i thought worst case a discount of that scale would be a flash crash such as we had march 2020 in the covid scare.

kknowing what i know now of course i should have been more diversified even within this sector. i did put a small amount of money in rolls royce at 80 feeling it was a technology stock in a industrial wrapper. i was right but did not hold much conviction on my analysis on rolls.

i am where i am. my best shot of getting back to break even and beyond in the next 2 to 3 years is to hold. nothing else on the market is likely to double or *****uple in 3 years. once back at 11.82 sp i will diversify regardless of my preferences and hold about 1/3rd of my isa portfolio in grow but not until then. wish me luck. at least we have not been diluted in a way that we will never return to 11.82. with the portfolio’s natural (and fast) organic growth at some future point we will get there.

Sad. Our SP is at such a discount it matters not if we have preference shares or not. I doubt the market giving much value to them at all at the moment. Of course our NAV calculations will at the margins take them into account but the market does not believe our NAV calculations.

I wish I was investing fresh and not well under my average buy in price (currently about 5 quid) but I still expect to be in a 100% profit within 3 years if not sooner. Wish not so many black swans swimming about. Israel, Ukraine, Trump, the list goes on.

Interest rates coming down and this is not priced in for our sector yet. I expect inflation to fall faster than predicted -especially if oil price eases as I expect with increased supply stimulated by high price itself. Also Saudi will get tired of the 2m barrel cut.

There is a regulatory problem to fix for retail wrapped illiquid assets. Can’t see why GROW feel constrained on this but regulation would oblige them.

We should be able to see clearly how many shares in the core portfolio companies we own and know how much is our valuations on the books for for each core portfolio company. That facilitates the correct level of “caveat emptor” as we can look at what those same companies are on the books for with other funds and with basic information such as sales, sales growth, sales margins and multiples of sales to valuations (pus of course the intangible spice of sector specific IP and “know how” ) we can do our own crude analysis of component company valuation.

The FSA has a legitimate concern -even if it is too Woodford closed fund trust structure based in it’s anxiety. If valuations of component companies in the trust are a black box maybe the retail price does not reflect market reality and a warning needs be issued of some sort. It is this obligation to warn that seems to be substantially deterring institutional investor into GROW at the moment.

In reality the retail wrapper is highly sensitive to even the possibility of NAV downgrades (I have been saying too sensitive) but FSA operates in a theoretical world.

So we have the worst of both worlds. FSA forcing funds to warn of potential losses the retail price already has priced in and more. Stupid.

GROW management can put out more component specific information in the meantime. They are only constrained by their agreements (probably informal ) with the component companies and not the regulator. Can’t see why we can not have runway length, sales, sales growth etc for each component company so we can make our own judgment on NAV calculations.

Anyhow SP will align with NAV/share once the market stabilizes for late rounds and IPO bit of pipeline. NAV/share will jump as well when that happens from our current circa 700 to something significantly higher based on underling company company sales growth and the maturing of some seed funded companies coming through the pipe.

One for the ISA for sure but in my view we are near a sharp correction upwards. Just can’s say when. Maybe on the year end results due out shortly.

Https://www.edisongroup.com/research/nav-down-c-6-in-the-first-half-of-fy24/32914/

Kazoo had no impact on half yearly results as was all fortunately sold. Ditto unfortunately for Uipath and Trustpilot who have been all sold off but have recovered a bit on the markets since.

I for one don’t want GROW to hold listed stock post IPO. I want them to exit in a late round or at IPO not after. This seems to be the policy.

Quite right that with SP where it is anybody who invested in GROW at or after IPO in 2016 has lost money -expect the management. And in a sector that by all accounts has grown nicely (well above general market) since 2016.

I think part of this underperformance of the SP is just sentiment leveraged by the black box nature of the retail wrapper. I also think NAV calculations have been overly conservative which in good times is “petrol in the tank” resulting in SP premiums over NAV/share but in bad times leverages dark moods and reverse animal spirits.

For my money I an not even beginning to sell or diversify until we are 11.82 again however long that takes. I don’t see where the structural damage to the sector or the portfolio has been to justify the discount. As we did following the COVID recovery repricing once sentiment changes can be quick.

However, if one looks at NAV/share increases alone it has not done so well. GROW state 20% growth over the cycle which of course is compounded so NAV/share should be 4 to 5 times 2016.