Augmentum’s NAV per share ticks up as fintech investments perform well
Augmentum Fintech saw its net asset value (NAV) per share rise by 2.4 per cent year-on-year, thanks to the strong performance of its investments in a challenging market.
The London-listed fintech investment fund, which has peer-to-peer lender-turned-digital-bank Zopa in its portfolio, reported NAV per share after performance fee of 158.9p for the year ended 31 March 2023.
“Our 10 highest value holdings have seen revenue growth at an impressive average of 117 per cent year-on-year and raised over $300m (£235.7m) in capital during a challenging macroeconomic and fundraising environment,” said chief executive Tim Levene.
“Despite an increased focus from venture investors on companies displaying a clear path to profitability and reducing cash burn, the growth in our portfolio through the cycle reflects the quality of many of our companies and the unabated advance of digital transformation in the financial services sector.”
Read more: Zopa backer says bank needs to strike balance between profit and growth
However, Augmentum’s overall NAV ticked down to £294.1m from £295.2m the previous year, while the value of the investment portfolio fell to £254.3m from £268.8m.
The fund reported a total pre-tax return of £4.893m for the year, substantially down from £59.315m the previous year. This was mainly due to a decline in capital, which reflects Augmentum’s method of using market comparables to value investments, at a time when most of its peers are reporting net downward valuations.
“Shareholders will be fully aware of the significant market volatility throughout the year under review,” said chairman Neil England. “The war in Europe, inflation, rising interest rates after a prolonged period of close to free money, highly priced US technology stocks falling in value and the contagion from that have all been factors. Fast growing companies that need cash to fuel that growth have generally been out of favour.”
Read more: Augmentum hails “significant growth potential” of fintech portfolio
Augmentum’s share price rose by 1.43 per cent to 99p on the results announcement, as of 2pm GMT.
However, the fund’s share price has declined by more than a third in the past two years. England said that it was “disappointing” that Augmentum’s NAV growth over the past five years is not reflected in its share price.
Augmentum has completed several successful exits over the last 18 months, making £42.8m from the sale of interactive investor to abrdn in May 2022 and £22.8m from the sale of its stake in pensions fintech Cushon to NatWest Group earlier this year.
Read more: Fintech offers opportunities despite macro headwinds, says Augmentum
However, it invested just £19.9m last year, down from £60.8m the previous year, which it attributed to “a disciplined approach to capital allocation” amid challenging macroeconomic conditions.
Levene said the company is seeing “a material increase in the number of compelling investment opportunities at more pragmatic valuations”, which it expects to continue into 2024.
Augmentum has 10.8 per cent of its net assets in Zopa. Other key investments in its portfolio include technology rental site Grover (15.5 per cent of Augmentum’s net assets) and business banking platform Tide (12.9 per cent).