The investment company is currently trading at a 50% discount to the value of its net assets. Director Ed McDermott sees this as a bit of an anomaly, particularly given the performances of some of the portfolio companies. Will 2020 herald a change of fortunes?<\/p>\n
The glossy magazines that chronicle the lifestyles of the rich and famous might show the glitterati at the opening of a new ultra-chic Mayfair nightclub.<\/p>\n
Rock up to the same spot a week later with your mates after a sesh down the Dog and Truck and a couple of burly shaven-headed six-footers will likely show you and your friends (physically if need be) where to go.<\/p>\n
In other words, these exclusive haunts arent for the rank and file plebs; they are for the handpicked few.<\/p>\n
The analogy works in the world of investing, specifically when it comes to getting in on the early rounds of promising start-ups. Its an exclusive, paid-up members-only club.<\/p>\n
In Silicon Valley, for example, you must be a fund of significant size and reputation (or a billionaire) to gain access to the Series A rounds of the next Uber, Palantir, or . Single-digit millionaires need not apply. Riches beget riches.<\/p>\n
Here in the UK, the story is a similar one: only a small cadre of venture capitalists and well-heeled individuals tend to see the pitch decks of the best new, innovative growth businesses.<\/p>\n
So, its a bit of a head-scratcher that shares of Ltd ()findthemself friendless at this point.<\/p>\n
The AIM-listed investment firm is chaired by Lorne Abony, the Canadian serial entrepreneur, while his predecessor was Jim Mellon, the UK mining magnate.<\/p>\n
FastForward has been given all-areas access to some exciting early-stage innovators and has holdings in nine businesses in the fintech, ed-tech, life sciences and cannabis sectors.<\/p>\n
The net asset value (NAV) of these stakes has grown to 20mln, or 12.63p a share, in the last six months yet FastForwards share price has slipped to just 6.05p.<\/p>\n
A 50% discount to NAV is an unaccustomed position for the company, which has tended to trade at a premium to its portfolios value.<\/p>\n
In January 2018, for instance, the shares were changing hands for 24p, and less than a year ago they were marking time at 12p.<\/p>\n
Its quite an unusual thing to be trading so far below NAV, especially with the assets we have, which tend to increase year on year [in value], said director Ed McDermott.<\/p>\n
Two investments that have done particularly well are EMMAC, a cannabis company co-founded by former investment banker McDermott, and Juvenescence, a biotech incubator focused on human longevity.<\/p>\n
The most recent fundraising for the latter provided a 58% valuation uplift.<\/p>\n
EMMAC, meanwhile, has issued a loan note that could convert into equity at 62.5p a share more than double the 30p FastForward bought in at.<\/p>\n
None of this seems to have been recognised by the market, though it should be noted it has been a rough year for companies listed on Londons junior market with Brexit and the recent general election exerting a huge drag.<\/p>\n
Wed like to see a little more liquidity within the portfolio of assets, said McDermott, setting the scene for 2020.<\/p>\n
2019 was a period of building up towards that. We could see three IPOs [initial public offerings] next year, maybe more.<\/p>\n
Listing a business on the stock market via an IPO provides an opportunity for FastForward to realise value.<\/p>\n
The cash it then receives can be reinvested in new opportunities, though there may even be scope for a pay-out, according to McDermott. Should we get a liquidity event then we are of the mind we would look potentially towards dividends.<\/p>\n
Hopefully, the thumping victory at the polls of pro-business candidate Boris Johnson will settle nerves. Next year should be about value realisation.<\/p>\n
We dont know what 2020 holds in terms of the market, but whatever your view, the Conservatives are much more business-friendly. That provides more confidence for anything that might float on this side of the pond, McDermott. We are quietly confident.<\/p>\n
<\/p>\n
Continued here:<\/p>\n
FastForward Innovations heading into 2020 with confidence - Proactive Investors UK<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" The investment company is currently trading at a 50% discount to the value of its net assets. Director Ed McDermott sees this as a bit of an anomaly, particularly given the performances of some of the portfolio companies Continue reading