Spac effect on VCT's
Posted: March 30th, 2021, 5:24 pm
Having seen the recent Cazoo deal at Titan, the City Pantry and Simply Cook deals at Apollo, not to mention Gousto now HH vct's largest holding due to it being elevated to unicorn status, plus other seemingly generous exits from various vct's makes me wonder if the game is changing ?
Five years or so ago sensible vct investors were worrying about the lack of recurring revenues in the future with MBO's in particular being banned, now perhaps with the impact Spac's appear to have had on US valuations in particular do we need vct's which go for, or have access to, early stage companies in the hope that one or more is picked up at, to me anyway, a seemingly ridiculous price ?
If so which vct's ? Clearly Octopus is firmly in that space, but their size means you need a few very good exits annually in Titan, notice Apollo is now growing fast too and goes for slightly more mature companies than its bigger brother.
Northern are now owned by an eis specialist but seem to be doing little since selling out, though I believe they have a good exit soon too, so what of the other generalists ?
Maven seems to go for low risk propositions which make money quickly such as crematoriums, I have no problem with that but hardly likely to go for a large multiple.
I wonder how Albion's shift to tech start ups might work out, they seem diligent there as managers ?
Seneca vct is owned by a potentially rather interesting parent but they currently are very small, BSC, certainly by their very modest fund raises since the new rules appear to be very cautious, perhaps Pembroke might throw out something to appeal to a Spac, they have a good heritage, certainly.
Given most tech enthusiasts are saying that UK valuations are about half those of similar US companies (Dr Jourdan of Amati for one said that very recently), perhaps we investors might need to rethink which trusts we support in future ?
Five years or so ago sensible vct investors were worrying about the lack of recurring revenues in the future with MBO's in particular being banned, now perhaps with the impact Spac's appear to have had on US valuations in particular do we need vct's which go for, or have access to, early stage companies in the hope that one or more is picked up at, to me anyway, a seemingly ridiculous price ?
If so which vct's ? Clearly Octopus is firmly in that space, but their size means you need a few very good exits annually in Titan, notice Apollo is now growing fast too and goes for slightly more mature companies than its bigger brother.
Northern are now owned by an eis specialist but seem to be doing little since selling out, though I believe they have a good exit soon too, so what of the other generalists ?
Maven seems to go for low risk propositions which make money quickly such as crematoriums, I have no problem with that but hardly likely to go for a large multiple.
I wonder how Albion's shift to tech start ups might work out, they seem diligent there as managers ?
Seneca vct is owned by a potentially rather interesting parent but they currently are very small, BSC, certainly by their very modest fund raises since the new rules appear to be very cautious, perhaps Pembroke might throw out something to appeal to a Spac, they have a good heritage, certainly.
Given most tech enthusiasts are saying that UK valuations are about half those of similar US companies (Dr Jourdan of Amati for one said that very recently), perhaps we investors might need to rethink which trusts we support in future ?