Augmentum Fintech, a London-listed investment fund, has reported a 2.4% year-on-year increase in its net asset value (NAV) per share. Despite a challenging market environment, the fund’s investments in the fintech sector performed well, contributing to the growth in NAV. Augmentum Fintech’s portfolio includes peer-to-peer lender-turned-digital-bank Zopa, among others.
The fund’s CEO, Tim Levene, highlighted the revenue growth of its top 10 holdings, which averaged an impressive 117% year-on-year. These companies also raised over $300m (£235.7m) in capital during a difficult fundraising environment. Levene attributed this success to the quality of the portfolio’s companies and the continued digital transformation in the financial services sector.
However, Augmentum Fintech’s overall NAV decreased slightly from the previous year, from £295.2m to £294.1m, and the value of its investment portfolio also fell from £268.8m to £254.3m. The fund’s total pre-tax return for the year was £4.893m, a significant decline from £59.315m in the previous year. These decreases were mainly due to market comparables used to value investments, which resulted in downward valuations.
Chairman Neil England acknowledged the market’s volatility throughout the year, including factors such as the war in Europe, inflation, rising interest rates, and falling US technology stocks. He also mentioned that fast-growing companies in need of cash have generally been out of favor. Despite the challenges, Augmentum Fintech’s share price rose by 1.43% following the announcement.
Although the fund has experienced successful exits in recent months, generating millions of pounds from the sale of investments, its overall share price has declined by over a third in the past two years. England expressed disappointment in this discrepancy, as the fund’s NAV growth over the past five years has not been reflected in its share price.
In 2022, Augmentum Fintech invested £19.9m, compared to £60.8m the previous year, adopting a cautious approach to capital allocation amidst challenging macroeconomic conditions. However, CEO Tim Levene noted a rise in compelling investment opportunities at more pragmatic valuations, a trend expected to continue into 2024.
Some of Augmentum Fintech’s key investments include Zopa, Grover, a technology rental site, and Tide, a business banking platform. The fund has allocated 10.8% of its net assets to Zopa, with Grover and Tide accounting for 15.5% and 12.9% respectively.
Despite facing market challenges, Augmentum Fintech remains optimistic about the growth potential of its fintech portfolio. The fund continues to seek investment opportunities in the sector, aiming to capitalize on the ongoing digital transformation in financial services.
Overall, Augmentum Fintech’s NAV per share has shown positive growth thanks to the strong performance of its fintech investments. While the fund has faced challenges in terms of overall NAV and market comparables, it remains focused on identifying and capitalizing on promising investment opportunities in the fintech sector.
