Member Info for steph

However we don’t go down with a recession as our portfolio generally not selling into today’s market but tomorrow's. We have been going down on interest rate rises. A recession pulls them down. So perversely a recession probly wil make us rise.

For my money we are oversold and by some margin. A lack of recent price discovery by IPO and late rounds menas we are considered a bit of a black box. Enough investors do not trust our NAV estimates. I do turst them so tremendous upside -once the funding round market reappears and thus price discovery on a good % of our core portfolio. Wiht that discovery I expect our curent NAV is conservative not overstated.

Could be that as we drop out of FTSE 250 we lose investors who held us for no other reason than we were part of that F250 basket but it is too early to buy for those investors who want the tax advantages of AIM. So forced net selling on the transition.

Thanks for sharing.

I’m an economist so qualified and successful only at longer term investment strategies. GROW ticks all the boxes an economist might have for long term (10 years plus) above benchmark returns but I never saw this dip coming so limits to my approach (if one needs to access funds or one wishes to play the inevitable dips and volatility by switching in and out).

My long term trend advise is:

1) the sector GROW is in if not 100% GROW. Especially from this base should significantly outperform all reasonable comparables with similar downside risk.

2) Anything AI assisted healthcare. Some future potential priced in but still massive upside left.

3) short oil. It will come down from these levels. Don’t know when but months not years. Long term sustainable price of oil must be below the cost of switching to green energy alternatives for the same BTU values. Currently levelized price of solar in some parts of world 4.2c/kwh which is equal to 65 dollars a barrel. Also shale oil and gas kicks in above 40 dollars a barrel so nothing saudi can do about that.

4) AI architecture, software and service industry. A lot priced in but still the future. GROW holding s of AI related firms do not have high valuations which is part of my reason to hold GROW. Entry at a good price.

5) internet based banking which is another reason I like the GROW portfolio. Hard to say which firms will prevail but a lucrative growing market. Good odds for any well run firm in the sector.

6) pre seed and seed for EU/UK tech firms. Valuations less than USA but same potential. Sector should be recession proof as long term by nature. Another reason I like GRWO portfolio. 1,700 start ups professionally chosen.

7) Manufacturing firms that really are tech firms but valued at manufacturing multiples. Step forward Rolls Royce.

Https://files.pitchbook.com/website/files/pdf/Q3_2023_PitchBook_Analyst_Note_Introducing_the_Pre-Seed_Dataset.pdf

2023 will end above 2018 and 9 continuing an uptrend that spiked a bit 2021 2022 but not excessively so.

Did not mean to say 3% (or lower) within 12 months just falling in that direction.

24 months yes i would predict that. many forces combine to create a new normal of rates in the 2 to 3 % range. japanization of rates in the long run for all western economies with usa canada etc last due to growing workforces

Https://www.cnbc.com/2016/06/15/want-to-get-into-tech-investing-vc-firm-draper-esprit-has-just-gone-public.html

nav/share September 2916 results 352 and that was a choppy market due to brexit (brexit vote on week after launch)

yes there are interest rate headwinds we did not have plus ukraine but nothing on the scale needed to justify the discount to nav/share we have had for over a year. it cant last.

ate ee really worth less than at our launch when we were a much smaller company measured by any metric one might chose. basics of portfolio companies same as in 2916 to march 2020 period in terms of average sales growth and portfolio failure rates. nothing fundamental has changed.

within a year interest rates will be coming down again likely to a new normal below3%

but do peak interest rates of 5.5% or so really change the fundamentals of risk free return on capital to justify our discount to hard won nav/share . it will correct and probably quite rapidly when it starts.

https://investors.moltenventures.com/storage/uploads/PLC/Results-and-Reports/30.09.16_Interim_Results_Presentation_September_2016_bjgyd.pdf

nav 122m

I suppose why the dip just now.

It is pretty clear the dip in valuations for private tech is over. They are not in free fall (as they would need to be to justify our sp discount to NAV/share) and in fact have stabilized at current levels.

SO if you believe GROW have accurately valued the component companies taking properly into account current multiples and comparables (which they say they have done and I believe them) then givne organic sales growth our NAV/share shoudl rise from here without any change in valuation multiples.

When will we start to catch up to our own NAV/share is unknown. I suspect sooner rather than later but each of us wil tk our own position on that. 2.42 silly.

What the f with the dip today. All the background music is positive. Are there really still funds getting out at this late stage of the dip?

Great articles.

Oakbloke is more or less my position on this. . I thrust we are both evidence based analysists rather than dreamers. . Time will tell. I have pencilled in recovery to 12 quid in 18 months or less. That is a long way from 2.60.

Graphcore has challenges to be sure but right sector to be in and lots of intellectual property and talented staff who will find a way. Is it really only worth 1/1000 of NVIDIA? There will be a nich that Graphcore will profitably fill even if it never takes on Nivida head on. Of course if it can challenge Nivida head on (as it seems to be saying it will be able to do in due course) sky’s the limit.

Https://www.proactiveinvestors.com/companies/news/1026709/ipo-market-recovering-with-strong-arm-and-rayzebio-debuts-instacart-birkenstock-and-more-to-come-1026709.html

Https://pitchbook.com/news/articles/PE-UK-recovery-sustained

Https://pitchbook.com/news/reports/q2-2023-us-pe-middle-market-report

On 100x earnings day 1 ipo

who said ipo market shut?

just need to go stateside

Bloomberg reported yesterday that the IPO was already oversubscribed by 10 times and bankers planned to stop taking orders.

We had the big brexit dip in 2016 on the suprise results so I think the brexit discount is baked in. that did not prevent us from a slighty froty rally in 2021. WOudl have been forthier wihtout Brexit so maybe a back handed favour.

SO may factors why similar tech companes in uk eu trade at roughly half us valuations for similar but mainly availability of capital. Uk out of favour to be sure but reasons are mainly sentiment rather than hard facts. US in pretty big trouble as well and governance issues worseethan here. Liz Truss looks quite safe and sane compared to many candidates for the Republican Party nomination for presidency.

But there must be some connection between our low sense of economic self-worth and the miserable valuation multiple that’s applied to British shares. It’s hard to imagine that the outlook for British companies is only half as good as for their US counterparts. But that is what the market is telling us.

Https://www.telegraph.co.uk/business/2023/09/09/french-bank-bnp-paribas-britain-shun-eurozone/

Just treading water near bottom. I suppose funds than need to come out as we exit 250 are doing so but we do not yet get the funds that want to hold AIM for the tax benefits

Arm flotation helpful. SHOws IPO market still alive and in volume if priced correctly. Revival of IPO market would have a dramatic impact on our SP even if multiples of sales are as low or lower than 2018 pre covid. Our portfolio has been expanding based on sales quite sharply since 2018 so and decrease will be well covered and we should be back to our pre covid SP pretty sharpish.

Graph-core the wildcard as few commercial sales but lots of valuable IP. The commercial sales they have are industry leaders like universities research departments so may well still come good.

When I chose to concentrate in GROW I believed with some evidence that a cross section of EU UK tech fast growing start ups diversified by geography and maturity would be a sweet spot of the least volatility relative to the most upside potential (due to the long term nature of most of the investment -including sovereign wealth funds like the Irish).

What I missed was the retail wrapper could leverage angst and cause disproportionate outflows due to being more liquid than the majority of the asset. Also such a black box and new asset class it just has no history of dips and recoveries to go on so the worst is assumed on a dip.

Of course on the upside the reverse will happen. I wait with bated breath.