Prelude Trust adds 3 firms to portfolio; sees net asset value slip £0.9m
Prelude Trust (PDT.L), the investment trust specialising in early stage tech businesses managed by Esprit Capital Partners, reported today that its net asset value was £48.9m at the end of September compared with a like-for-like £49.8m a year previously.
Its actual net asset value at end September 2005 was £54.8m, but in the meantime Prelude returned £5m to shareholders. Operating costs and changes in the valuation of investments accounted for the balance of £0.9m.
Chairman Mike Brooke said: "With the addition of three new companies during the period [the six months to 30 September], the Trust portfolio now includes 15 active companies, nine of which are revenue generating with a further three expecting to achieve early revenues in 2007.
“Looking forward, I share the Manager's confidence that this combination of early stage and more mature investments will provide shareholders with substantial growth in Net Asset Value."
He added: "The Manager is continuing to see many attractive investment opportunities and will continue to invest as cash resources allow. The Manager is exploring exit opportunities for some of its more mature portfolio companies."
At 30 September, following the £5m capital return and after making new investments totalling £6.7million, the Cambridge-based Trust had £12.3m cash in the bank, with £1.7m committed for further investment in its portfolio.
Investments
Follow-on investments of £2.9m were made in seven existing portfolio firms and £3.8m was invested in three new portfolio companies, Xanadu BV, DisplayLink Inc and Xmos Ltd.
The Trust invested a further £1m in ZBD Displays Ltd through two convertible loans. Its 27.7% shareholding in the company is valued at £5.6m, its largest single holding.
In May, it invested £1.25m in Xanadu BV, a semiconductor specialist developing industry-leading products for the emerging ZigBee wireless sensor networking market.
In July, it invested a further £0.48m in Kiadis BV, in which it now owns 24.7% valued at £1.7m. The investment is part of a larger funding round linked to new initiatives in the oncology market for which Kiadis has received a funding grant.
Also in July, the Trust invested £1.9m for a 13.5% shareholding in its second new portfolio company, DisplayLink Inc, which is already achieving early revenues.
In July and August, the Trust invested £0.18m in De Novo Pharmaceuticals Ltd in the form of a convertible loan. The Trust's 16% shareholding is included at a fair value of £0.97m, around £3.2m below its cost on the books.
In September, it provided a further £0.7m as a convertible loan to SiConnect Ltd, increasing its total investment to £2.1m.
The Trust provided a £0.18m loan to Cambridge Positioning Systems in September, increasing its total investment to £5.8m.
Also in September, the Trust added a third new company to its portfolio when it completed an investment of £0.63m in Xmos Ltd, an early stage semiconductor company developing products that emulate hardware functionality to provide a new way of implementing hardware designs in the microcontroller market.
The Trust also invested a further £0.15m in m-spatial Ltd in September, in a convertible loan, increasing its total investment to £2.4m and taking its holding to 31%.
Realisations
During the half year, Prelude received £4m as the final payment of the deferred proceeds from Invitrogen and Broadcom from their respective acquisitions of DNA Research Innovations and Alphamosaic in 2004.
Since the end of the half year reporting period, in November, it has committed £2.5m to a new venture capital fund in partnership with Cambridge Consultants Ltd, an iconic firm in the Cambridge Cluster that has an track record for spin-outs including Alphamosaic, CSR, Xaar and others. The new fund, to which CCL has also committed £2.5m, will provide seed and early stage finance to a new generation of CCL spin-outs.
Fund managers
Esprit Capital Partners now manages the Trust (after its merger), as well as a €400m limited partnership, Esprit Capital I, a fund focusing on later stage technology investment. With a team of 11 investment managers and funds under management of around €500m, Esprit is one of the largest venture capital fund managers in Europe. Esprit now has offices in both London and Cambridge.
The Trust and Esprit I invested together in DisplayLink, jointly leading a $13.25m later stage financing round for the company.
Mr Brooke said Prelude was exploring further later stage co-investment opportunities with Esprit I.
21st November 2006
