Member Info for steph

The not listed is key

For tetsil investors grow is the only way to get a slice of those fast growing companies and a premium should result.

How much if s premium is the question .

Sage is the extreme low end on this bb but still a premium. I think in time 70% will become the norm if they can keep up 20 % nav growth and don’t hzz as ve s significant % of listed companies ( yrsdff Edf at nav I’d listed portfolio).

By June 16 I expect this dip will be well and truly over

For those of us willing to take a risk borrowing at 1.39% for 5 years and putting that into GROW for the same 5 years is pretty good odds.

Can’t see stocks dipping much for any length of time at these interest rates nor our sector sales dipping. A bit of inflation will flatter sales and the Booming economy will allow firms to buy software and hardware that enhances sales.

I just took out a 5 year fixed mortgage rather than a slightly cheaper 2 year so I guess I think rates are going up a bit .

I don’t think central bank rates will go over 2 % anywhere in Uk eu though within 5 years and while the small rises over the next 5 years will cause some volatility no long term impact on our rising so which will be on proportion to nav and that in turn proportional to sales of the portfolio companies.

But maybe GROW can equal Buffett for 10 years or so inside this very promising sector??

Does not need to beat the growth rate of the sector as a whole by much to get 20%. Buffet needed to beat the US index by a lot and did so for 40 years. GROW has not outgrown the sector -and won't for quite a few years yet.

https://hostingtribunal.com/blog/how-fast-is-technology-growing/#gref

Whole tech sector growing at between 10% to 15% and within that private EU/UK tech faster than that.

Not hard for a good outfit like GRWO with early seed money giving it visibility of the winners emerging to get 20% annual returns. Indeed Berkshire Hathaway got 20% over a 40 year period just fishing in the general USA traded market. Only in last few years Buffet struggling to maintain 20% due to lack of candidates. No such problem yet with GRWO. Lots of choice in UK EU market still at attractive valuations.

‘It’s just the beginning’: Covid push to digital boosts big tech profits
https://www.theguardian.com/business/2021/may/01/its-just-the-beginning-covid-push-to-digital-boosts-big-tech-profits?CMP=Share_iOSApp_Other

Sent from my iPhone

How right you are. Anyhow this is message view.

I thought the update, while fantastic, was a wash against high expectations and thus the SP going sideways.

I hope the year end finals on June the 16th and the broker upgrades that will follow will give us the boost I was hoping for on the update. We need new forward guidance which was not in the update much.

I do think it helpful the range of views on the BB. Sage is cautious but that is a really useful viewpoint to have -especially considering his accounting expertise.

I'd rather hold a share with cautious as well as optimistic holders bundled together. Not just safety in numbers but safety in the breadth of viewpoints. Call it "due diligence".

The results were achieved in spite of, rather than became of, headwinds and tailwinds.

1) The update mentioned "currency headwinds of over £50 million" That is a lot and a one off. We would have been close to NAV/share of 8.00 without that 50m. I imagine it is down to the US dollar pound and euro exchange rate change of about 15% between March 31 2020 and March 31 2021.
2) The dilution from 119m shares to 139m or 17% depressed earnings (as a one off) by around 17%. No time for new money to earn a return but it diluted the earnings on the existing portfolio. We would have been close to 8.00 NAV/share without that fund raising.
3) the tailwind of COVID is not over. For sure will be for most of the March 31 2021 to March 2022. Maybe will outlast COVID in the G20 itself for years ahead. It stimulated a digital shift that is accelerating and has critical mass and momentum. It is not dependent on the COVID kick start.

SO no we are not decelerating to 10% NAV/share rises year on year. A 31% rise in NAV/share in spite of the above is fantastic and bodes well for 20% rises year on year gong forward.

But we have the dilution headwind this year so maybe a wash. Without the dilution headwind we topped 40% nav/share increase . So even if Covid tailwind was 20% as a one off we are still on 20% year on year growth

nav per share
370 in march 31 2017
413 in 2018 -11.6% increase
524 in 2019 - 26.3% increase
555 in 2020 - 5.9% increase and
"at least" 724 in 2021 -_at least a 31% increase.

That is about 20% per annum nav/share increase since GROW went public with a slight trend to accelerate. Even our conservative sage agrees that SP will go up in proportion to NAV/share increases.

a 20% premium over trailing nav/share puts us around 8.80 . I think that is where we settle once the market absorbs the news. Certainly by year end update. Seems quite light trading volumes and no broker upgrades right now so not much impact of update yet.

https://www.cityam.com/draper-esprits-tech-bets-pay-off-as-portfolio-value-jumps-35-per-cent/

https://www.altfi.com/article/7838_draper-esprit-portfolio-reaches-1bn-boosted-by-freetrade-trustpilot-and-uipath

https://au.finance.yahoo.com/news/tech-investor-draper-esprit-sees-080649178.html

great update but a lot of that news was trailed and priced in already.
I did not pick up on the effect of the dilution on short term NAV/share.

New money has not had time to earn a return but it still dilutes earnings that would have otherwise applied over a smaller share register (118.9m rather than 139m ) So a temporary downdraft I had not factored in. Good time to do it as 31% NAV/share increase buries that effect.

No surprises up or down but good to see confirmation. Should help our SP over the next month to get past 900 but my 10 quid may need to wait for the half yearly

In the past takes a few hours or days

Generally rises after market updates and podcast

shares in circulation were 118.9 m in 2020 an dare now 139m in March 31 2021.

Thus an increase in fair value will be larger than an increase in NAV/share.

Both good but NAV/share the more important of the two. the 31% increase in NAV/share truly puts the COVID year deflated NAV/share behind us and gives GROW an average NAV/share growth since it went public of circa 20%.

I don't really understand the difference in accounting between fair value growth and NAV/share growth. I suppose reinvested funds don't necessarily show on the NAV calculations as 100% of their cost as NAV is liquidation value and fair value increases are what was earned. Reinvested funds might not be immediately 100% recoverable???????

"The fair value growth in the period reflects strong performance across the breadth of the portfolio. Despite currency headwinds of over GBP50 million, the fair value increase of over 47% is significant relative to the targeted 20% annual gross portfolio returns through the cycle."

IN the past on the year end updates the SP was on slight premiums of NAV/share.
2017 370 NAv/share 390 SP.
2018 413 nav/share 550 SP
2019 524 NAv/share 500 SP
2020 555 Nav/share 648 SP

SO twice a good 20% premium and twice nada. Averages out to what Sage suggests -around 10%.

Will be closer to 20% or nada this year?

Some principals.

Assuming our trust has enough % private companies in it so that one can not simply buy the same portfolio directly (barriers to entry or ring fenced value) our SP can and has gone/go over Nav/share. Question is how much this year and in following years.

Some principals.

The faster NAV/share growth is the higher the premium. At 6% or so that just compensates investors for the lack of a risk free return. Average expected NAV/share growth needs to be more than 6%. If the market belies 20% is now the probable path for the next 10 years that is 14% extra returns to price in. However funds can, unlike us, participate in the fundi rounds of the privately held core portfolio and this will mitigate the GROW trust SP uplift. Does not mean we will not get the year on year growth of 20% in SP but not a rebalancing as well on top of that to a higher premium over NAV/share I hope for.

Assuming rapid NAV/share growth the closer to 100% private and the less likelihood of further funding rounds (or IPO's) that other funds can get into the higher the premium over NAV/share that will be paid. If the average differential between funding rounds is 100% uplift even funds who can buy into private companies will pay a significant premium over trailing NAV/share unless they are already shadowing GROW.

Also GROW has other money making bits to it beyond the core portfolio. These revenue generating bits can support a much higher P/E rations than the core trust held portfolio. It is like a company within a company.

For me the fact that the sector is growing at roughly the same rate as GROW and there are other ways (for at least private fund)s to get into the sector does not negate the GROW growth rate. Just other ways to own it. So big premium over NAV/share or small it is the growth rate that is the most important in the long run.

I do think this year by the end of July and assuming market stability we will see and SP of 10 quid plus made up of a trailing NAV/share of 800ish and a 20% plus premium.

May take a few trading days after the update for the shares to absorb the news and as in the past the full uplift will not occur until the year end formal results and the broker upgrades that generally come at that time.

Good luck all.

Yes of course topped up a bit at these levels

Surprised we are under 850 going into Monday but funds come out for reasons of their own. Profit taking after a good rise perhaps and never long term holders.

Good luck all

SP funny. Can't seem to make up it's mind whether to be in the upper or lower bund of 800 before preliminary results Monday.

I expect Monday will be a bit of a game changer and hopefully change upwards the range we are bouncing around in by 100pts.

As sage points out maybe 70% premiums of NAV/share not for a few years but some significant premium with this fast NAV/share growth surely justified. I think historically and practically 30% is "conservative" . We have had 30% premium over NAV/share 2/4 of our final results already. Surely this time round we will eventually drift p to 30% as well within a couple of months. How else can a retail investor get that growth rate? Even funds need time to mirror the fast growing GROW portfolio and should pay a premium of some sort based on not having a time machine to buy on the last funding rounds that form GROW NAV/share.