Augmentum Fintech enjoys NAV boost, but the share price suffers
Augmentum Fintech enjoys NAV boost but share price suffers – Augmentum Fintech (AUGM) has published its final result for the year to 31 March 2022, during this time NAV per share after resultathonorar delivered 19%.
However, the share price and the total return to shareholders, down by 16%, did not reflect the strong development of the company portfolio as board says had been affected by the global mark down of listed technology shares and associated market sentiment.
In July 2021, AUGM collected a gross proceeds of £ 55 million through a significant oversubscribed fundraiser. This provided resources to continue adding new exciting fintech companies to the portfolio and to make further investments in existing portfolio companies. However, the second half of the year had a lower deployment rate, reflecting the disciplined approach to investment decisions that has often led the manager to refuse to participate in investments at prices that others have been willing to pay.
The investment pipeline remains strong and the manager continues to have visibility over most of the opportunities in European fintech. The board believes that despite market headwinds that affect the current share price, the company will generate a rewarding return to shareholders.
CEOs prospects
We have developed in just six short months from a risk in the market that had developed over a number of years to an environment with risk. The change in sentiment has not surprised us, and we have built up a healthy cash buffer of, on the date of this report, £ 61.0 million to ensure that we can both support our existing portfolio and also take advantage of convincing opportunities in the fintech market during the next 12 months and beyond.
The volume of venture capital collected over the last two years leaves significant “dry powder” commitments across Europe, with estimates suggesting more than two and a half years of capital in place with deployment rates matching the last two years. Such a volume of capital seeking a limited number of quality investments is likely to serve to continue to maintain the momentum for the fintech sector. In addition, there has been a consistent trend, especially in fintech, for companies to remain private for longer, which external market conditions are likely to strengthen.
Seeing potential hugs both at the entrance and exit therefore means that discipline is crucial. The quality of the opportunities in our pipeline is still high with more and more talents being attracted to the sector. However, not all good business is a good investment, and our conversion rate to meet companies and ultimately invest is currently 0.4%. The bar must remain exceptionally high, and our central thesis of investing only in areas of high conviction and / or secular trends in consumer behavior will continue to dominate our decision-making.
Our belief in the potential of the sector is still as strong as ever. Our core items in the portfolio are well placed, well financed and with sufficient liquidity to take advantage of continued market opportunities as they evolve.
AUGM: Augmentum Fintech enjoys NAV boost, but stock price suffers
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