Sign up UNITED KINGDOM
Proactive Investors - Run By Investors For Investors

Primorus Investments convinced it holds a bagful of winners

Investment Co.deals just in equity, no convertible loan deals or mezzanine structures
meeting
Engage Tech is one of Primorus' key investments

A huge gap in the market exists for companies just below IPO level trying to raise money, according to Alastair Clayton, executive director of Primorus Investments PLC (LON:PRIM).

He'd liked to fill it, but at a market value of £4mln concedes the company is just too small to make a serious dent.

WATCH:Primorus Investments PLC picking out the pre-IPO winners

Instead, Primorus’s plan is to take equity stakes in a few carefully chosen private companies that eventually float, make a substantial return on its initial investment and reward shareholders with dividends.

Clayton says its method is different from other forms of funding for pre-IPO companies in a number of ways.

First, it does not get involved in the running of the business, rather it chooses its investments based on an assessment of the management team and lets them get on with it.

Second, it deals just in equity, no convertible loan deals or mezzanine structures.

Beyond seed capital

Primorus often invests alongside family offices and high net worths, buying a stake usually at the time a company is looking for funds to take it beyond its initial seed capital.

At that stage, companies have established a viable product and are generating revenues, even if modest, he says.

Ten companies are in the portfolio currently, which Clayton says means that all of its seeds have been planted.

It should not be too long either to see if any of these seeds are going to bear fruit.

The first of the portfolio to IPO may be on the listing runway shortly after Easter, though Clayton expects the bulk of the activity to be in the summer, markets permitting, when a further three might float.

At that point, investors will able to get a much better handle of the potential both of the investee companies and likely uplift in value when they come to market.

Right choices

Clayton is confident he has made the right choices.

“Venture capitalists work on the basis of getting one in twenty right, we have to get 10/10.”

Clayton is even more convinced he has one £100mln, possibly even a £500mln company in its investment ranks.

Engage Technology, a company that has developed a cheap, temporary staffing platform is ‘smashing it’ in his words.

“This time next year Engage will dominate the contractor space,” he says.

Primorus has a 3.6% stake after investing in a funding round that valued it at £30mln, but  Clayton wants more and says he will re-jig the portfolio a little to up its stake.

Horse Hill a wild card

That conceivably might mean more of its stake in the Horse Hill Development consortium going on the block.

The company halved its stake in the HHDL consortium to 5% recently.

An extended flow test of the Horse Hill well is to start shortly and Clayton says he can’t wait.

This will go a long way to determining whether the Weald Basin in the UK's Home Counties, where Horse Hill sits, contains a huge and accessible oil basin and, more importantly, it if is commercial.

3D screens

Other notable investments include a stake in Baroness Mone’s WEshop and Stream TV, a US$300mln glasses-free 3D screen manufacturer.

Clayton was a 3D sceptic but was bowled over when he saw Stream TV’s tech in action.

It’s an example of what’s out there for pre-float investors and Clayton would like nothing more than a couple of large venture capital firms to adopt its approach.

“That would shake up the market and get better companies listing.”

View full PRIM profile View Profile

Primorus Investments Timeline

Related Articles

mobile phone
June 19 2018
The marketing group has already said profits for the full-year will be ahead of expectations despite only being halfway through its current financial year
Clint Eastwood
May 25 2018
The group’s first piece of original content, a documentary called Pandas, premiered on 24 March this year, to positive reviews.
Media junkie
February 13 2018
In modern parlance, Ebiquity is making a pivot towards becoming the "world's leading tech-enabled marketing and media analytics consultancy"

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use