Member Info for steph

Https://pitchbook.com/news/articles/LBO-comeback-story-private-credit

Https://www.cnbc.com/2023/07/17/berenberg-buy-this-global-high-growth-tech-fund-set-to-rise-by-180percent.html

I’m ashamed to say my first top up on this dip from 11.82 was at 11.20. Thought even 11.82 was “temporary” . Now I believe “temporary “ will be around 4 years from previous peak to beating that.

NO way of knowing in advance we could dip so far below NAV/share and stay there for so long. We dipped with the market well below NAV/share with the covid scare March 2020 when some though teh world was about to end but quickly recovered.

We may never see again the multiples of sales we got in 2021 valuations but we don’t need them to get back to 11.82 with fast sales growth of our core portfolio. I imagine when the market stabilizes for us there will be some catch up as well as the organic 20% growth.

Anyhow I have 12 quid pencilled in for May 2025 so 4 years peak to peak -maybe quicker.

We seem directionless right now (bouncing along the bottom) but that will surely change soon and a sustainable rise will happen when money pivots back into sector.

Https://files.pitchbook.com/website/files/pdf/Q2_2023_European_Venture_Report.pdf

My observation (which is casual -I’ve not run a formal “shift share” type statistical analysis) is that our ups and downs more linked to US interest rates than UK for whatever reason.

Certainly helpful if UK rates reach peak and the expectation is down. US a few months ahead of us so I’m expecting a boost in SP sooner rather than later. Signs of funding (tech sector vc/private equity) pipeline repairing itself but was never as broken as our SP implied. I just think a bit of panic in a black box of information uncertainty created by our retail shell structure plus sector has never had a long downturn for reference. sector is new at these volumes and “tradabiity” and is really for specialist investors not retail. IN a downturn you do not what to be a new tradable asset class.

I’d welcome some of our core portfolio going for funding in the near future. I think the implied valuations that will be “proven” will meet or exceed the NAV on our books for that company and with that a big boost in confidence in our NAV/share calculations. Those that have gone to market for funding since the crash have equalled or exceeded the valuation we had on them so far. Nothing to fear.

Hopefully, finally and sustainably.

We did have a “dead cat bounce” late October from 2.60 to 4.80 but this time I think we have paid our dues calendarwise and it will be a sustainable recovery.

Still the Barclays guidance may trigger a few sells when we get above 4.30 and slow the rise to 2/3rds of NAV/share -which I consider a reasonable discount in current market. SP assumes we ahve calcuated NAV wrong for market and/or there will be a continuing market deterioration fast enough to offset the postive nav impact of rising sales of core portfolio.

Anyhow as a result I’ve pencilled in a slighly slower rise on the last leg of the “U”. Still by October 2024 I expct these to be plus 10 quid and by May 2025 finally over 12. A near 4 year dip before getting back to previous SP. THat is a long deep dip for a portfolio that has had very few dud’s and has excellent average sales growth across the portfolio. . From there onwards and upwards at our normal 20 to 30% sp and NAV/share growth. Maybe a bit of catch up from the missing 4 years as well.

Broker guidance at 6 quid (Berenburg + Barclay) and all insiders filing their boots. This should fly some time pretty soon. I’m holding until we are back at 11.82, whenever that is, but I expect within 2 years After that I’ll diversify a bit but GROW will still be 50% of my long term future portfolio. At the moment it is 100%.

Where the good guy gets beaten to a pulp but miraculously to a cheering crowd takes control, recovers and wins. 2.45 is ridiculous. Barclays guidance will slow rise a bit above 4 quid as some take profit but historically this does seem to move disconnected by broker guidance high or low.

Normally a 70% uplift on current sp for a broker guidance would be excellent news but for us I feel it is awful. Strange world we are in. Hopefully it will be exceeded as we have exceeded broker guidance in the past.

Reported that Berenberg reduced it’s 12 month target form 9.00 to 7.75 as of july 15th with a buy rating. Still a long way up from our 2.55 sp. Indeed 300% the largest in the ftse 250 for any broker guidance.

Barclays reported to start coverage in a july 5th research note I can't seem to get. Stated “overweight” without a price target.

Https://files.pitchbook.com/website/files/pdf/Q2_2023_PitchBook-NVCA_Venture_Monitor.pdf

A u shaped recovery to be sure not a post covid sharp v shaped as I expected.

I accept the market ahs changed but I believe the discount to our nav already applied in the face of robust sales growth of portfolio companies quite enough to reflect current market conditions. A discount to NAV of say 30% to reflect uncertainty as to when NAV/share grows at 20 to 30% again is fair enough but not the extreme we have. Arbitrage without much change in market may come and with it 5 quid sp.

We went suddenly up form 2.60 to 4.80 in 2 weeks in late October 2022. I thought that was the v shaped recovery but sadly not yet. BIg funds who hold GROW neither selling or buying. I suppose they are not adding yet as they think the opportunity will still be there in a few months even if at a modestly higher SP.

We should be flying. i suppose a seller offloading against good background news. hopefully will clear soon and we can finally start the climb that forms the other side of a u shaped recovery.

We went down on anticipation of us rate rises and we will go up on the reverse anticipation - not necessarily waiting until the hard results of rate cuts. We don’t seem overly influenced by UK rate rises or uk economy -thankfully. IN theory we should be influenced more by ECB rates but not as much as you would think.

Anyway signs of IPO market coming back. With that whole pipeline of late stage funding rounds will repair itself and our discount to NAV/share should disappear alongside some organic increase in NAV/share itself -perhaps sarting as soon as our half yearly results in October 2023. I still think we ae looking at circa 10 to 12 quid by November 2024 and then upwards and onwards from there.

Https://pitchbook.com/items/files?eu=yQk2%2BlrYNIMauZa%2FSzm5A%2BrDx4RdHOKwIWgi8zyQMN9%2FVuNJKOBlRG9WmH%2BTxR4%2BHfFVuOdi6%2Fg4EhG6oM8D4bdE2pUcpY%2F%2F%2FWRcp6uWMak%3D

Https://www.theguardian.com/business/2023/jul/10/jeremy-hunt-to-unveil-pension-fund-reform-plan-to-help-uk-startups?CMP=Share_iOSApp_Other

Https://www.ii.co.uk/analysis-commentary/insider-small-cap-turnaround-and-buying-70-discount-ii528415

Https://www.bloomberg.com/news/newsletters/2023-05-31/nvidia-is-soaring-ai-chip-rival-graphcore-can-barely-get-off-the-ground

Grahame Cook picked up 23,000 shares at 2.30

bet he will not regret that purchase

Shell shocked maybe,

when something looks, quacks and walks like an irrational price maybe it is and will correct itself within days, weeks or months.

it is analytically a trap to look at the sp and reverse engineer the justification. sometimes there is no rational justification. the downside risk of substantial down-rounds across the whole of the core portfolio that would justify this sp is possible but improbable.

no evidence happening nor or evidence it could happen. never happened before to have years of downrounds for companies already mature enough to have substantial sales with good margins on those sales.

the comparable is the dot com boom and bust but those companies had no sales and collapsed when funding rounds tightened.

grow’s portfolio is genuine companies of the future. i think the valuations credible and cautious. for example graphcore now on our books at 1/3 what we had it even though in hottest sector. punished by us for lack of sales. correctly so but still with enormous potential. is 1/3 d too little an implied downround or too much impossible to say but in aggregate across portfolio hardly 75% wrong as sp implies. we have had recent funding rounds for some confirming our valuations.

panic not logic

good luck all