There are always opportunities out there
August 29, 2023
We hope you have had a lovely bank holiday break and are looking forward to September.
There has been a storm of headwinds in the private markets this year, not least increasingly painful interest hikes and a slower than expected drop in inflation, but as always in this type of economic climate there are both valiant established and exciting emerging private companies that are determined to beat the trend. I suspect we will start to see second generation companies emerging from the ruins of those that drank too much KoolAid at the start of this decade, which will generate a lot of activity for us all.
New data, published by the Venture Capital Trust Association and reported by the Financial Times HERE, shows that in 2022 UK VCTs deployed £664m across 345 investments. This increase in investment by VCTs was in contrast to the 23% drop in funding across the wider UK venture capital industry. What does that mean for you and us? In due course there will be lots of transaction and valuation work either for companies that are funded and growing or from those that need to do something because the VCs are no longer there for them.
(As an aside, we have a very positive relationship with a discrete outfit that specialises in funding £50m rounds or larger. If you have a client that has a need like this, I will happily put you in touch).
As you know we are very busy. We’ve been working on another valuation where we are having to attribute value across sister companies, but in this case there’s a good argument to justify moving some value because of operational interconnectivity (transfer pricing can make things look very different to reality!), but one of the companies definitely retains all the brand value.
We know that the autumn often starts slowly as clients roll back from their summer holidays and then picks up fast towards the end of September, but if a valuation does come across your desk anytime soon, we have capacity to get it finished, fast. Do get in touch if you think we can help. You can reach me on 07736 676 212 or at modwenna.rees-mogg@athlacapitalmanagement.com.
