Oakley Capital, manager of Oakley Capital Investments (OCI), has bought a majority stake in XTEL, a Belgian business software as a service (SaaS) provider. The size of the investment was not disclosed but OCI, an £816m investment company that invests in Oakley’s private equity funds, is investing £33m through the Oakley Capital Fund VI. This is OCI’s second investment in an enterprise software provider this year, following a £28m investment in France’s Group Senef in March, and comes after a period in which listed software businesses have fallen on fears of disruption by low-cost artificial intelligence (AI) tools. Oakley, which argues that the best software firms will benefit from AI adoption, said XTEL’s software enabled over 400 consumer packaged goods companies, such as Unilever, PepsiCo and Johnson & Johnson, to manage the trade promotions they run with retailers. Previously backed by private equity groups Bain Capital and SilverTree, XTEL had grown annual recurring revenues by around 40% over the last three years and Oakley’s investment would support its global expansion under chief executive Rob Mullen. Peter Dubens, co-founder and managing partner of Oakley Capital, said: “We believe the company is well-positioned to harness AI to enhance its product offering and further strengthen its market position.”
QuotedData senior analyst Matthew Read said: “Oakley’s investment in XTEL looks very much in keeping with its long-established playbook of backing mission-critical software businesses with strong recurring revenues and international growth potential. While “trade promotion management” may sound niche, software that becomes deeply embedded in the operations of global consumer brands tends to enjoy high switching costs and resilient demand. The deal also illustrates how private equity investors continue to favour software businesses with large proprietary datasets and clear opportunities to apply AI in practical ways, rather than simply chasing fashionable themes.”
Octopus Apollo VCT (OAP3), the largest venture capital trust with a market value of £550m, deepened its exposure to artificial intelligence software providers in its last financial year. Results for the 12 months to 31 January showed the VCT, which faces its next four-yearly continuation vote in July, stepped up activity with total investment rising to £55m from £47m. Six of 10 new unquoted investments were in companies using AI at the heart of their businesses. These were: £4m in Liftango, a shared transport software platform; £4.8m in Altura, a bid management platform; £2.2m in Lyrebird Health, a medical documentation platform; £2.5m in healsgood, a healthcare staffing platform; £4.5m in Grasp, a market analysis firm for finance professionals; £3.5m in dost, a document processing platform; and £2.5m in Sales Ape, a sales automation platform. In all £43.4m was invested in new holdings with £11.6m in follow-on investments to existing companies. Five disposals made £33.9m against an aggregate investment cost of £15.1m. It was a quiet year for performance with a 2.4% total return driven by 2.6p per share of dividends. Net asset value per share dipped to 49.1p from 50.5p. Over five years, shareholders have received a total 37.3% return.
Gresham House Energy Storage (GRID) will begin construction at Cockenzie in Scotland, Monet’s Garden in North Yorkshire and Elland 2 in West Yorkshire after the £438m battery fund completed £141m of borrowing for its first three development projects. Separate financing has been arranged on each project covering up to 70% of costs. The company will pay 2.5% over SONIA for 15 years. The overnight interest rate administered by the Bank of England is currently 3.73%. Separately, GRID is holding a webinar at 2pm on Thursday to discuss its latest development project in Rayleigh, Essex, which it acquired on Friday. You can register here.
Vietnam Holding (VNH) notched up 1.7% of growth in April but underperformed the 9.4% rebound in the Vietnam All-Share index as the benchmark was once again led by a narrow band of large companies, such as conglomerate Vingroup (VIC), which the fund’s managers at Dynam Capital do not hold on account of their concerns over valuation and business execution. VNH, a £67m investment company that has delivered a 37.5% total shareholder return over three years, has gradually shifted towards large-cap stocks that now account for around three quarters of the portfolio. Much of the market remained flat last month, reflecting a “complex picture” of strong economic growth (up 7.8% in the first quarter) offset by higher energy costs from the Middle East war pushing up inflation to 5.5%. Nevertheless, portfolio companies continued to report strong earnings growth. That left the fund and Vietnam attractively valued ahead of the country’s promotion by index provider FTSE Russell to secondary emerging market status in September.
BlackRock World Mining (BRWM) has announced changes to its board with former SocGen mining analyst Judith Mosely retiring after 12 years. Guy Elliott, former chief financial officer of £137bn mining giant Rio Tinto (RIO) who has also served on the boards of Cadbury, Shell and SABMiller, has joined as a non-executive director. Existing NED Marion Sears replaces Mosely as senior independent director. The £1.8bn investment trust reported strong annual results in March with a 74.1% total shareholder return last year.
Stay a step ahead. Our daily newsletter brings you the latest on investment trusts and active ETFs. Subscribe here.
