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Cassandrayawning's avatar

I've always struggled to reconcile HGT reported NAV performance with the 7-8x net debt/EBITDA in this rate environment... and 26x EV/EBITDA is priced to perfection! fwiw I prefer e.g. CTPE with 3.1x and 11x respectively

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PowerLawInvesting's avatar

Given your deep dive in IP group is it fair to assume that’s your favorite? Other than discount to NAV, what are the reasons you like it more than others? Is it the deep tech focus or perhaps mgmt team or overall strategy?

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The Oak Bloke's avatar

Hi Power,

I'd be hard pressed to pick a favourite. Between the ideas in this article for example GROW, Oakley, TMT, IPO, EMVC they all have merits. What drew me to write about IPO was the 25% fall over a portfolio holding worth 10% that I believe is now worth 5%. (Istesso). If you go back over the 530 articles I've written all of the above have enjoyed similar deep dives.

Regarding IPO management I would describe them as smart, shrewd, open. The strategy to invest in a 3-prong strategy of deeptech, cleantech and lifesciences appears to work well. IP Group have close links with Universities and commercialising its IP... something the UK wasn't historically good at doing.

The recent realisations in deeptech particularly have been an endorsement. Cleantech (and valuations) is in utter capitulation however it remains my view that there is an inevitability to its success. Human ingenuity is the only way to avoid the worst of climate change and our hunger for energy. Finally life science as you probably know is a risky business. Istesso's results an example of this, and other examples exist. But we can also point to success like Intelligent Ultrasound in 2024.

The scale of IPO is another advantage and magnified by an EIS fund with £0.5bn AuM.

Finally at the risk of going into discount to NAV I'd comment if IP Group were in the USA its current valuation would be very different I believe.

OB

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teamwork86's avatar

I would add that with GBPUSD so low today (1.21) the underlying NAV of those with US based/denominated holdings will be substantially higher.

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