Braveheart Investments Regulatory News (BRH)

18 Jun 2007 07:00

Braveheart Investment Group plc18 June 2007 18 June 2007 Braveheart Investment Group plc ("Braveheart", or "the Company") PARTNERSHIP WITH THE UNIVERSITY OF EDINBURGH TO CREATE £25 MILLION FUND Investing in commercial investment opportunities emanating from the University Braveheart (AIM: BRH), the technology commercialisation and investmentmanagement company, and the University of Edinburgh, Scotland's largestUniversity ("the University"), announce the creation of a dedicated £25 millionfund ("the Fund"), further extending the relationship between the two parties. With a maximum value of £25 million, the Fund will have rights of first refusalto invest in all commercial investment opportunities that arise in respect ofcompanies and intellectual property emanating from the University, other than inthe field of medicine, veterinary medicine and life sciences, where it may takea co-investment position. The Fund, which intends to generate attractive commercial rates of return forits investors, will seek financial commitments from a number of partners. It isanticipated that the first round of investment will close in the spring of 2008,and will involve cornerstone investors including Braveheart itself, theUniversity, Bank of Scotland and others. Braveheart will act as fund manager and will issue an information memorandum toprospective partners in early 2008. This is Braveheart's second such fund,following the announcement in February this year of the £12 million StrathclydeInnovation Fund partnership with the University of Strathclyde. In common with the Strathclyde fund, Braveheart will share 25% of itsperformance bonus with the University. In addition, when an investment is made,a payment will be made to the department which has sponsored the investmentopportunity, thereby encouraging departments within the University toparticipate in the commercialisation partnership. The Fund will have a life of eight years, comprising an investment period offive years followed by a period of three years in which to monitor and manageexisting investments. There are options to extend the life of the Fund, up to amaximum aggregate period of 10 years. Braveheart and the University's commercialisation arm, Edinburgh Research andInnovation will pool resources and expertise to help with the commercialisationof companies and their technologies. Braveheart will also use its network ofbusiness angel investors to provide non-executive directors to companies thatare spun-out, making crucial expert advice on corporate development available tothem. The University of Edinburgh is Scotland's largest University and is rated fifthin the UK and first in Scotland for research income. The University attractedresearch awards of £139 million in 2005/2006, including 23 awards in excess of£1 million. In 2005/2006, the University supported the formation of 23 new companies andbusinesses. Over the past five years, 57 companies have been created, of which91 per cent are still trading. These companies have raised around £18 million ininvestment funding and employ over 150 staff. Braveheart has a strong 10-year track record in the field of commercialisation,and has consistently produced annual rates of return for its investors thatexceed 35 per cent. To date, Braveheart has exited 17 of the companies it hasinvested in. Of these, six have been IPOs and three have been trade sales, withthe balance being write-offs. To date, three University of Edinburgh spin-out companies have developed intopublicly quoted companies. These are Vision Group plc, Wolfson Microelectronicsplc and MicroEmissive Displays Group plc. Both Wolfson and MicroEmissiveDisplays were in the Braveheart portfolio prior to them becoming publiccompanies. The Company also recently announced a £300,000 investment through itsAlpha EIS Fund into Spiral Gateway, a semi-conductor company which spun-out ofthe University. Commenting, Geoffrey Thomson, Chief Executive of Braveheart, said: "We have hada strong working relationship with the University since 2003, having supportedeight spin-out companies to date. The creation of the Edinburgh University fundwill act as a further catalyst to the successful commercialisation of theUniversity's intellectual property. The Fund is also a further opportunity forBraveheart to extend its ability to make proprietary investments following ourflotation in March this year. "This Fund offers access to capital for innovative intellectual propertyemanating from the University, to support it en route to commercialisation. Wehave successfully supported young companies for ten years now and we expect tofinance some really exciting technology with this fund. The University has awell deserved world class reputation for commercialisation and we are delightedthey wish to strengthen their relationship with us." Derek Waddell of the University of Edinburgh, said: "The University of Edinburghhas an integrated policy for, and a strong track record in, company formation.We provide high levels of support to staff and students who wish to create newcompanies and, on average, we produce one new company every month. We work hardto produce companies with a sound technology base and good managerial teams andlook forward to working with Braveheart to develop the Fund, which will not onlyoffer important early stage finance for these companies, but importantly alsoprovide our companies with access to experienced management expertise." For further information, contact: Braveheart Tavistock Communications University of EdinburghGeoffrey Thomson Richard Sunderland Derek WaddellChief Executive Rachel Drysdale Managing DierctorT: 01738 587 555 T: 020 7920 3150 Edinburgh Research and Innovation rdrysdale@tavistock.co.uk T: 0131 650 9040 About The University of Edinburgh • The University of Edinburgh was founded in 1583 and is the largestuniversity in Scotland with over 23,000 students from more than 120 differentcountries. In 2005, it was named the Sunday Times Scottish University of theYear and was described by the paper as "a model of broad and consistentexcellence". • The University of Edinburgh is recognised for its innovative researchacross a broad range of disciplines. Since the Scottish Enterprise Proof of Concept grant programme was initiated, atotal of 26 University of Edinburgh projects have received Proof of Conceptgrants, including four in the last year. In the past ten years, the Universityof Edinburgh and its network of spin-out and start-up companies havecollectively won 44 SMART awards. About Braveheart Braveheart is a technology commercialisation and investment management groupwith a proven track record of delivering attractive returns by makinginvestments in companies which commercialise intellectual property.Braveheart Ventures, which later became a subsidiary of Braveheart InvestmentGroup, was formed in 1997 by four Scottish businessmen as a co-investmentvehicle in order to pool their money and knowledge, increase diversification andreduce risk. Braveheart makes investments in young, emerging, unlisted companies where thereis potential for significant growth. Typically, Braveheart's investments arefocused on British companies with potential global technology solutions.However, the Group also maintains limited exposure to more traditionalbusinesses. Braveheart's portfolio ranges from start-up companies to companieswhich are close to an IPO or sale. Each year, out of several hundred businessplans received, around ten investments are made, all of which demonstrateattractive exit potential. These opportunities arise from Braveheart's networkof contacts, which includes close relationships with universities, innovationcentres, and the Group's own clients. The Group's business consists of two components:• an investment management business; and• direct investment. These components provide the Group with a mix of regular revenue streams,principally from investment management fees, and exceptional income through therealisation of investments upon exit. The Group's investment management business arranges and manages investments onbehalf of sophisticated private investors, corporate entities and public sectororganisations. Many clients are successful entrepreneurs in their own right andhave extensive track records of starting, building and exiting companies.Clients are able to choose whether they wish to be active investors (referred toas advisory clients) or passive investors (referred to as discretionaryclients). Advisory clients build their own portfolio based on opportunitiespresented by the Group. Discretionary clients give a mandate to the Group tobuild portfolios based upon agreed objectives. The Group currently has approximately 100 clients who, as well as investingfunds, frequently provide:• secondary pre-investment due diligence;• management skills and business development expertise;• a pool of executive and non-executive directors; and• further investment opportunities. Each client has a different portfolio and therefore a different overall return.An equal investment made in every portfolio company since the Group's formationwould have generated an average compound return of 37 per cent. per annum onrealised investments (these being investments where an exit has been achieved).Of the 17 realised investments, six have been by way of IPO, and three by way oftrade sale or secondary purchase. Eight have been written off. In November 2005, Uberior Investments plc (a subsidiary of the Bank of Scotland)subscribed for 10 per cent. of the enlarged capital of the Company. Thisprovided the resources for Braveheart to commence making significant directinvestments alongside its clients. As at 31 March 2007 there had been threerealisations of investments directly held by Braveheart which have togethergenerated a compound return of 110 per cent. per annum. The Group is based in Perth and has a staff of nine. This information is provided by RNS The company news service from the London Stock Exchange