LMS Capital surveying new opportunities – The small to mid-sized focused private equity trust LMS Capital (LMS) saw its NAV decline by 6.5% in the year to December 31, 2018.
Highlights include:
- The net asset value at 31 December 2018 was £60.3m, 74.7p per share (31 December 2017: £64.5m, 79.9p per share)
- The portfolio showed an overall net reduction in value on the year of £2.3m (2017: net gain £10.5m)
- The loss for the year was £4.2 m (2017: profit £7.6m)
- Continued successful realisations in the year totalled £17.6m (2017: £21.7m). The biggest realisation came from the £9.0m initial consideration from the computing company Penguin (https://quoteddata.com/2018/06/lms-capital-sells-penguin-computing/ )
Renewed focus on small
The company, whose investments are focused on the US and UK, says it is surveying new investment opportunities.
Discussing where he sees opportunities, chairman of LMS, Martin Knight, states: “We continue to believe there are significant inefficiencies at the smaller end of the market, focusing on established smaller private companies below £50m enterprise value where there can be less competition for deals and valuations are more attractive. This segment of the market tends to be off radar for venture and early stage funding providers and sub-threshold for mid-market private equity investors, creating an opportunity to generate superior long-term returns.”
Regarding the fund’s investment approach, Martin states: “The investment approach is now focused predominantly on private equity investment and alternative, specialist asset classes using the experience of the GHAM team in asset management, private equity and public markets:
- The Manager will invest in profitable and cash generative businesses and investments to create value, targeting an annual return on equity of 12% -15% net of costs over the long term;
- The focus will primarily be on smaller private investment opportunities below £50m value where the Manager believes there to be significant market inefficiencies which create opportunities for superior long term returns and to leverage the experience of the investment team;
- Investments may include alternative, specialist asset classes which target long term, illiquid strategies both through co-investment and fund opportunities on preferred terms; and
- The focus is also on optimising the value of existing holdings and, where growth prospects are clear, to preserve and support longer term value creation.”
LMS: LMS Capital surveying new opportunities