Perth investment group Braveheart says it is “encouraged” by the rising value of deals in the tech sector as it seeks to realise value from its portfolio and funds.
Chief executive Geoffrey Thomson said disposals were being considered in several areas of the business, after results for the year to March showed how it returned to profitability during the second half.
He said Braveheart had been made “less volatile” by the December sale of its Envestors corporate finance network following a management buy-out.
The disposal, in exchange for the cancellation of share awards which had been due, saw the group reverse first-half losses stretching to £823,000 to record a return of £38,000 during the second six months.
It plans to continue its focus on contracted fund management, which already accounts for 89% of group revenues and offer “good visibility of operational revenue and associated cashflow”, and realising value in its own directly-held portfolio.
In partnership with crowdfunding specialist Crowdcube Ventures, Braveheart has also established the new Crowdcube Venture Fund.
The first of its kind, the fund will allow passive investors to build a portfolio of interests through an increasingly established fundraising channel with the help of screening from a professional fund manager.
“This year has seen good performance and output from our fund management business, the launch of an exciting new fund and the divestment of our loss-making corporate finance business,” Mr Thomson said.
“We have made steady progress with our directly held portfolio and market sentiment for realisations is improving with some weighty valuations for early stage technology company acquisitions being seen in the public markets.”
The company manages the £50 million Growth Loan Fund in Northern Ireland, which has now made a total of 46 loans across a “good range of industries” and Yorkshire and Humberside-based Viking Fund Managers, which has a portfoliocomprising 38 investments and “should provide significant returns for shareholders”.
A multiple of 2.2 has already been made on the sale of personal security firm S3 ID.
Braveheart also manages Strathtay Ventures, which invests on behalf of high net worth individuals and manages university seed fund Lachesis for a group of institutions in the East Midlands.
It said Lachesis was now in “wind-up mode”, with Strathtay examining two potential deals and long-term disposal plans.
Chief investment officer Carolyn Smith said the group’s directly-held portfolio, valued at £3.725m, had already had approaches over fresh deals, with “movement” in a market previously been seen as closed to firms of the size and nature of Braveheart’s technology investments.
“In tandem we are seeing some of our portfolio companies transition from prototype production to making product commercially available, and various companies are experiencing a burst in growth in sales and profitability, all helping to solidify a platform from which to seek realisations as part of the strategy for growth,” she said.
Mr Thomson said the group was “talking to a number of people” about deals, but that a newly-stabilised Braveheart, which is based at Merlin House on Perth’s Necessity Brae and employs around 30 people, could now afford to wait for the right option in an encouraging marketplace.
He said the venture was progressing well with strong investor interest in the offer.
Fee revenue remained flat at £2.04m in the year, with group-wide losses running to £807,000 given the impact of the reverse at Envestors.