SPPC.L Regulatory News (SPPC)

16 Apr 2007 07:01

St Peter Port Capital Limited16 April 2007 First Day of Trading St Peter Port Capital Limited ("the Company"), established with the aim ofgenerating value by investing in growth companies, immediately prior to aninitial public offering ("IPO"), today announces that its shares have begununconditional trading on AIM. Key highlights - £75m raised for new pre IPO Fund - Strong institutional investor appetite - £10 million subscribed by founding investors in Ordinary Shares at the Placing Price - Shore Capital acted as placing agent and stockbroker to the Company, Deloitte & Touche LLP acting as nominated adviser Bob Morton, Chairman of St Peter Port Capital Limited, said: "We are delighted with the investor appetite shown in St Peter Port Capital. Wehave assembled a strong and experienced team to exploit this opportunity." Commenting on the flotation, Tim Childs, Chief Executive Officer of St PeterPort Capital Limited, said: "We offer our shareholders a unique opportunity to invest in a broad range ofgrowth companies immediately prior to IPO which we hope will generate highreturns for shareholders" For further information: St Peter Port Capital Limited: 07768 816777 /Tim Childs / Graham Shore 020 7468 4090Deloitte & Touche LLP: 020 7936 3000Jonathan Hinton / James LewisShore Capital Stockbrokers Limited: 020 7408 4090Dru DanfordCitigate Dewe Rogerson: 020 7638 9571Fiona Mulcahy/ Sarah Gestetner Notes to Editors Introduction The Company, a Guernsey registered, closed-ended investment company will investin growth companies, predominantly immediately prior to an IPO. The Company's objective is to achieve returns from the uplift on or shortlyafter IPO, but the exit from the investment could also be a trade sale. Theuniverse for investment will principally be companies expecting to conduct anIPO in the months after the Company's investment. Investment will be made acrossa broad range of sectors and geography. The initial focus will be on companiestargeting UK, US and Commonwealth stock markets although pre-IPO companieslooking to float on other exchanges will also be considered. The Company hasappointed St Peter Port Investment Management Limited to act as its investmentmanager ("Investment Manager"). The Investment Manager St Peter Port Investment Management Limited is a joint venture between BroughtonInvestments Group Limited ("Broughton"), a company in which Tim Childs isinterested, and Shore Capital. Tim Childs and Shore Capital have an especiallystrong track record in generating value through investment in growth companies.Further information on Broughton and Shore Capital is set out at the end of thispress release. The Investment Manager will manage the Company's portfolioactively with the aim of achieving its investment objective. Initially, whilstsuitable investments are being identified, the Investment Manager will seek tominimise cash drag by investing a significant proportion of the net proceeds ofthe Placing in absolute return products intended to generate a positive return,principally hedge funds and funds of hedge funds. The investment opportunity The Investment Manager believes that there are a large and growing number ofinvestment opportunities which offer attractive returns from providing laterstage financing of private companies which are expecting to undertake an IPO inthe short to medium term. The Company will benefit from the increasing number ofcompanies using financial advisers and brokers based in London as their IPOadvisers, on AIM and other markets such as Euronext. The Company may alsobenefit from periods when IPOs become more difficult or risky to undertake, asthis is expected by the Directors to generate opportunities to invest onattractive terms in companies otherwise ready to undertake an IPO. The Investment Manager has extensive experience of investment in small tomid-sized companies to produce above average returns for investors. TheDirectors believe that this experience will provide the Company with access to awide network of contacts, including other investment banks, stockbrokers,investment boutiques and professional advisers, which should ensure a good dealflow. In addition, to increase the potential pipeline, the Investment Managerintends to meet smaller companies, a number of which may be suitable forinvestment. Investment strategy St Peter Port Investment Management Limited will aim to build a diversifiedportfolio of growing small to mid-sized companies which are seeking to achievean IPO within a reasonably short time horizon. It is intended that investmentswill be opportunistic and not sector or regionally focused and that they willtypically be passive in nature. It is intended that the net proceeds of the Placing will be used to build aportfolio of investments of in the region of forty companies over the nexttwelve to eighteen months. The Investment Manager will actively manage theCompany's portfolio to enhance returns for Shareholders, with an emphasis onrealising gains in the medium term. The Investment Manager will seek, in theshort term, to minimise cash drag by investing a significant proportion of thenet proceeds of the Placing in a range of absolute return products intended togenerate a positive return, principally hedge funds and funds of hedge funds. The funds invested will typically be used to provide the investee company withthe working capital and finance needed for expansion before the relevantbusiness proceeds to an IPO. The Directors anticipate that the Company'sinvestment will typically be through convertible loan notes which will convertinto equity upon flotation, through direct equity, or a combination of both. The investment strategy provides that investments may be opportunistic in theirnature. Where it believes that there is a good business case for investment, theInvestment Manager will not necessarily limit investments to opportunities whichdisplay all or any of the above characteristics. The Investment Manager may, forexample, invest in quoted companies (for example, where a company becomes ashell and is about to make a major acquisition). Directors The Board is chaired by Bob Morton (currently Chairman of five quoted companies)and also includes Tim Childs (experienced investor and entrepreneur), GrahamShore (Managing Director of Shore Capital Group plc), Simon Bourge (ManagingDirector of the Bourse Fiduciary Group) and Peter Griffin (director of the trustcompany division of Fortis Reads in Guernsey). Dividends Initially, it is not intended that dividends will be paid to Shareholders.However, the Directors may pay dividends in the future depending on theavailability of distributable reserves, cash resources and the working capitalrequirements of the Company. Any dividends or other distributions made to Shareholders will be paid inSterling. Promoters' commitments to invest Broughton Limited, Southwind Limited (a company in which the Morton family isinterested) and Shore Capital Trading Limited have committed to invest £2.5million, £2.5 million and £5 million respectively in the Company pursuant to thePlacing. About Broughton Investments Broughton and Broughton Investments are both wholly owned by the trustees of TheTimothy Childs Life Interest Settlement, a trust of which Tim Childs is thesettlor and a beneficiary. For the purposes only of ease of reference in thisDocument, all references to Tim Childs shall, where applicable, includeBroughton and/or Broughton Investments and/or the trustees of The Timothy ChildsLife Interest Settlement. Broughton, and a predecessor vehicle in which Tim Childs was also interested,have been investing in unquoted companies since 1994, on the basis of dealssourced by Tim Childs (the actual investment decisions being made by thedirectors of Broughton). In the early/mid 1990's, Broughton focused its unquotedinvesting on the bio-tech sector, concentrating on information technology andinternet related companies in the later 1990's and 2000. After the bursting ofthe ''tech bubble'' in the latter part of 2000, Broughton changed its investmentemphasis and since then has principally undertaken pre-IPO investing, an area inwhich it has proved successful and has achieved high returns. In sourcing unquoted investments over this period of more than a decade, TimChilds has developed an extensive network of introducers of transactions whoregularly bring him deals. The Investment Manager expects to draw upon thisnetwork for the benefit of the Company. About Shore Capital Shore Capital Limited is a smaller companies fund management specialist. Theteam at Shore Capital has many years of experience and currently managesapproximately US$2.3 billion in a combination of alternative assets and privateclient portfolios. Shore Capital Limited has a strong track record of over 10 years of investing insmaller quoted and unquoted companies and delivering consistent returns, both inperiods of strong performance of smaller companies generally and where marketconditions have been more challenging. Puma I, a growth capital fund managed byShore Capital, delivered net returns to investors, after all costs, of 76.1 percent. per annum over the period from May 1996 to August 2000 (when the fund wasliquidated and wound up). Puma II, the second fund launched by Shore Capital inthe growth capital area in October 1999, notwithstanding very challenging marketconditions, achieved an overall growth in net assets per share (after allexpenses but prior to founders' carried interest) of 71.3 per cent. to 28February 2007, outperforming the FTSE AIM Index by more than 89.5 per cent. overthe same period. Both of these Puma funds have invested in portfolio companieswhich contained elements which would fit with the investment strategy of theCompany. Over the 65 months to February 2007, Shore Capital's portfolio of hedge fundholdings has achieved a 12.3 per cent. per annum internal rate of return, beforemanagement and performance fees. Over the same period the fund has produced anannualised volatility of 4.5 per cent. per annum. To 28 February 2007, the PumaAbsolute Return Fund (''PARF''), launched in May 2003 as a fund of hedge funds,and listed on the Dublin Stock Exchange, delivered a gain to investors of 49.5per cent. since inception, before management and performance fees. Directors of the Company Arthur Leonard Robert Morton (aged 65), ChairmanBob is a Chartered Accountant, who has been a substantial investor on his ownbehalf in a number of AIM companies. He is currently Chairman of five quotedcompanies: Harrier Group PLC, Vislink PLC, Armour Group PLC, Lorien PLC andTenon Group PLC. He is also a director of a large number of private companies. Timothy Erling Childs (aged 45), Chief Executive OfficerTim is an experienced investor and entrepreneur across a range of sectors. Hewas a founder, Chairman and Chief Executive of Gatehouse Leasing Limited, aDublin-based lease finance company, which was subsequently sold to an investmentgroup, and in turn acquired by the Bank of Scotland. He also served as ManagingDirector of Private Equity Investor plc, an investment trust fund of technologyfunds from February 2000 to November 2004. He has been involved in pre-IPOinvesting since 1994. Graham Barry Shore (aged 50), DirectorGraham is a former partner of Touche Ross (now Deloitte & Touche) and wasresponsible for the London practice advising the telecommunications and newmedia industries. At Touche Ross he undertook strategic and economic assignmentsfor a wide range of clients including appraisals of venture capitalopportunities. In 1990, Graham joined Shore Capital as Managing Director, andhas been involved in managing Shore Capital-promoted investment funds Puma I,the JellyWorks portfolio, Puma II and the Puma VCTs. This has involved theevaluation of new deals and representing the funds with investee companies.Graham has been involved with AIM since its inception as both a corporatefinancier and investor and with private equity for more than 20 years. Simon Charles Bourge (aged 46), DirectorSimon is a qualified barrister with an MA from Cambridge and practised as alawyer in Bristol for 15 years. He moved to Guernsey in 1998, where he isManaging Director of the Bourse Fiduciary Group and is involved in all aspectsof business development and service delivery with a particular emphasis on taxstructuring for foreign and expatriate private clients, collectives andcompanies. Simon is also a Director of Ptarmigan Property PLC, the AIM-listed UKproperty trading company, as well as Montier Asset Management Limited, aDublin-listed absolute return fund of funds, and its related CISX-listed fundand feeder fund. Simon is also a director of the Guildhall Managed Fund, anopen-ended macro-economic event driven fund and currently serves as VicePresident of the Guernsey International Legal Association. Peter Francis Griffin (aged 48), DirectorAn economics graduate from Leeds University, Peter qualified as a CharteredAccountant with Coopers & Lybrand in Manchester in 1982. Since 1984 he hasworked in the offshore financial services sector in a number of jurisdictionsand is presently a director of the trust company division of Fortis Reads inGuernsey. Fortis Reads is a group subsidiary of Fortis Group and is one of thelargest trust service providers in Guernsey. Peter's employment history includesperiods as a Partner with accountants Reads & Co/Robson Rhodes in the Isle ofMan, as a director of CMI Trust Company (a Halifax Bank of Scotland groupcompany) in the Isle of Man, and as Managing Director of Fairbairn Trust Company(an Old Mutual group company) in Guernsey. This information is provided by RNS The company news service from the London Stock Exchange