Augmentum Fintech talks up portfolio strength amid pandemic
Publicly-listed venture capital fund Augmentum Fintech updated the market on the current impact of the Covid-19 coronavirus pandemic on its business on Tuesday, outlining the measures it was taking to manage the fund in the current environment.
The London-listed firm said the investment management team’s business continuity plan had been activated, with the team operating remotely.
It reported that it had “adapted smoothly” to the new working arrangements.
The investment manager was said to be taking proactive measures to provide portfolio companies and management with the support they needed, and believed that many were “well placed” to benefit from the disruption.
“This increased dialogue with the portfolio companies will continue and our investment manager will continue to provide support as long as necessary,” the board said in its statement.
Augmentum noted that it had a “strong, diversified” portfolio of 18 private fintech companies, many of which were category leaders across a number of verticals.
“Each of these companies is built upon innovative, best-in-class technologies and is overhead-light, with lean and efficient operations.
“These companies are agile, able to respond to changing market conditions, well-versed in remote working, and consequently have reduced operational risk compared to many other larger companies.”
It said that although the situation was fluid and companies within the portfolio were expected to experience short-term impacts to their business, due to Augmentum’s diversification across the wider fintech spectrum, the investment manager was expecting several of the companies in the portfolio to perform counter-cyclically.
“Indeed a number of these companies are already experiencing heightened demand for their products and services - they represent a meaningful percentage [of at least] 40% of our net asset value, and are growing far quicker than in normal conditions through helping their customer base in this time of need with their products and services.”
Augmentum said its board and the investment manager recognised that the world was in the midst of “an ever-changing situation”.
“The company does not carry any debt on its balance sheet and has a current cash position of approximately £14m to allow for future supportive investment in the portfolio alongside a strong syndicate of co-investors.”
At 1317 GMT, shares in Augmentum Fintech were down 2.05% at 57.3p.