Member Info for steph

Blob:https://www.stateofeuropeantech.com/4346a7c4-882a-42d3-9cd3-06206de37dd2

Https://rtfilesprod.blob.core.windows.net/originalnotes/1edf4487-6e49-4146-9990-dbe5518545b3.pdf?sv=2019-07-07&sr=b&sig=9E0kU7AWnsOHfGK0lXgbbPf1xdr%2BxBmm%2B%2BNGZ0BQ6iM%3D&se=2025-07-12T16%3A33%3A33Z&sp=r

Well worth looking at Figure 4. We over-performed morning star sector for years and later underperformed for years. Perhaps says we are more heavily weighted at early and seed that is more volatile when mood changes but also more inaccessible to us retail mortals and thus commands a higher premium when things are going well.

That enough on it’s own to lift NAV/share substantially in half year result's due in October given we have 157m at a 45bn us valuation. Seems now beyond doubt we will finally get a healthy profit registered this year and with that the discount should largely melt away.

Https://www.trustintelligence.co.uk/investor/articles/fund-research-investor-molten-ventures-retail-jul-2025

Quite convincing case SP undershooting NAV/share by some margin even taking account of current market conditions.

Ok quite mangy but still alive and capable of a kill

Maybe a bit mangy but a lion never the less . it will roar soon just don't know when.

Https://pitchbook.com/news/articles/european-dry-powder-put-on-hold-amid-tariff-led-uncertainty

We are around our 2016 float price yet a much bigger deeper portfolio including key areas of the future including aerospace and AI. Government and private money flowing into Uk Eu sector but we have not seen that translate into higher sales valuation ratios just yet. When it does we will fly. Trump not helping but not crucial to our SP recovery.

Our turn will come.

Https://pitchbook.com/news/articles/us-private-equity-giants-look-poised-to-double-down-on-europe

US Sector norms

Median IRR since 2016 15.5%

Top Quartile IRR since 2016 18.25%

GROW NAV/share IRR 6.5%

GROW SP since 2016 floatation zero, nada, zip, cancel all bonuses,, arggh!!!

If you believe as I do the retrace has well overshot on the downside and we will now enjoy a period of above trend growth and catch up than now is the time to fill your boots. Alternatively it is evidence of value destruction on an industrial scale and management should hang their heads in shame.

Senator

Well of course some of the discount to NAV/share is management responsibility. A modest discount given background jitters is understandable. 56% not so much. I might accept up to a 30% discount in current conditions as reasonable. No way 56%.

A key error was over investing cash realizations in 2021 and 2022. It was unwise to have not put some of that once in a 20 year event away for a rainy day. We even faced a modest dilution to make up for that error.

I remain convinced this is a slow burn with lots of hidden value. The low rate of collapses maybe shows good stock picking at work. NO evidence of good stock picking in current SP or NAV/share, growth, or lack of, since flotation though.

Sector correct, Geography correct. Subsectors within unlisted tech correct. Model of getting in at seed and putting staff on boards to pick best of up and coming correct. We should, given the risk, be outperforming all of the large traded indexes. If we are not beating SP 500 by some margin something wrong. 20% returns across the cycle is expected not 6.5%.

They cant be held responsible for premium or discount to nav/share but they sure are responsible for nav/share.

6.5% compounded nav per share growth between march 2017 and march 2025 is well below the 20% target so all bonuses should be suspended until that is back on track.

yes sentiment affects valuations as well as discount but that is the game to be played. they have to beat the 11% that the same investment in the SP index achieved in the same period.

i do think this will come good but until it does bonuses should be modest indeed.

The hit rate at this SP and NAV/share is poor if we use 2016 as a starting point. As SP a disaster as we are at our issue price. As NAV/share poor. We were 352 NAV/share March 31 2017 and 671 March 31 2025. That is only a 6.5% growth rate per year of NAV/sHar compounded daily since our first results up to yesterday’s. There is not getting around that hard fact. Even if the SP had not detached itself from NAV/share we would have nothing to be proud of. Until NAV/share recovers it’s mojo within the cycle (whatever that is in lenght) this has been a terrible investment since flotation. Even if SP had tracked NAV/share a 6.5% return for such a risky asset is very poor.

The FTSE grew in the same period about 2% per annum with daily compounding. The SP 500 had 11.7% per annum in the same period. Eurostocks index 4.1%.

So an investment in the SP in the same period would have beat our NAV/share rises by some margin. Why such a poor UK performance. Brexit and being ruled by clowns and idiots for most of that period no doubt played a role. Liz Truss was just an extreme example of the very poor quality. No doubt Graphcore would have fared better if supported as a UK/EU campion in a global competition for who controls advanced AI chips. Why would EU help UK AI after Brexit? Tory leaders detached from reality of the global competition unfolding. You either are in the top tier of value creation or you will end up with the service jobs at the lower end.

Our poor performance can mean one of two things.

1) poor stock picking by GROW team and avoidable errors.

2) An undervalued growing portfolio that will fly shortly when market conditions stabilize. . Just is a big dip in the cycle that will correct itself over the next 3 years and revert to post 2016 trend.

For my money I am on 2. Very small percentage of GROW picks have gone under -much better than sector averages. The portfolio is in robust shape and growing sales and staff though the dry years. Dilation limited and slowly being reversed. We will grow back into previous SP highs and beyond. Graphcore was nearly a star and well worth taking a punt on. We have many graphcores in the portfolio and only need one or two of them to shine for a good average.

Good luck all.

No surprises -good or bad.

revenue growth of core down to 37% which is normal enough given the cash preservation environment. Still high enough to drive NAV increases over the cycle.

Interesting that around 44% of core now making profit which is unusual for our portfolio. We are normally pre profit. I suppose that reflects the lack of IPO opportunity and the longer time of core in the pre-IPO pipeline. Average age of compares up to 11 years which seems long in tooth for me for start ups.

revenue multiplier used for valuations 6.7 which is lowish for the sector and gives some space for an upgrade at some point soon. We have been 12 and pitchbook showing sharp movement up but maybe too recent to be included.

I note they have accepted a 45bn valuation for Revolut but even that may be out of date soon. If a 60bn valuation is confirmed that means a 50m boost in valuation.

We nearly had a NAV/share minor decrease over the year due to adverse currency movements saved by share buy backs of 5m. May the buy backs continue at pace until our SP is much closer to NAV/share. We must be the best buy in the market at half NAV/share. Can't last.

I'm still a long term all out hold. I expect we will drift up a bit over the next few days but the really big boost will need some positive change in sentiment regarding IPO exists -whenever that is. Lack of exists is impeding late rounds as well. So a growing value (in the seed to early round pipeline) blocked at the end. It will blow at some point. I hope that point is soon.

Https://pitchbook.com/news/articles/european-startup-down-rounds-fall-as-vc-market-recovers

OUr SP was at a premium to NAV/share march 2017, September 2017, March 2018, September 2018, March 2019, September 2019, September 2020, march 2021, and September 2021.

The premium was over 50% 3 times.

Thanks

I did look at the valuation presentation. The chart at the end “Goldmund Sachs non-profitable technology index looked very relevant to track but I can’t find a link that I can see it. Any suggestions. OUR SP seems to track this index pretty closely.

Tech

I do think in aggregate GROW could publish weighted sales/nav alongside weighted sales growth which they regularly do. Also some portfolio companies might be OK with more detail published and GRWO can display these updates on it’s website.

No harm in saying exactly what the multiples of sales are being used for core portfolio that has no recent last round to go on in the notes to the NAV calculations and what the benchmark for that is being used. Could be presented as history as well.

The seed funds opaque and could be discussed more as they do for for core companies.

I appreciate a balance need sot be stuck and the retail wrapper has advantages in a stable or growing market and disadvantages in a stressed market. Arbitrage for the brave as we seem to overshoot on the downside when there is a market retrace.

Https://pitchbook.com/news/articles/european-fintech-emerges-stronger-after-vc-downturn