“Starvest (LON:SVE) is an investment company that was established by Bruce Rowan,” says chairman Callum Baxter.
“It made a lot of successful investments and helped a lot of pre-IPO companies. Bruce’s investment ethos was to take a stake in good early stage companies and support their IPOs and you can make a lot of money. As a result, Starvest as a company has returned a lot of money to investors over the years.”
But all things must pass. Much of that strategy was put together before and during the last mining boom, and Rowan can now claim to have backed a significant number of successful companies.
“Bruce decided he wanted to retire from the position of chairman and chief executive,” says Baxter, “and on September 1, 2015 I assumed a board position. I’ve known Bruce since 2003 when I first got exposure to London and I was also interested in the same sorts of opportunities. As a geologist I knew and understood a lot of the technical background.”
Greatland
At this point it’s probably also worth mentioning that Rowan was a seed investor in Greatland Gold PLC (LON:GGP), a company run then and now by Baxter, and which has a string of promising projects across Australia.
But there is more to Starvest than sharing a director with Greatland.
“I’ve continued the same investment strategy as Bruce had,” says Baxter. “We look at good exploration. We like particular commodities, gold copper and potash, but we’ll look at anything. We like oil and gas too. And we like the safer jurisdictions.”
Aside from Greatland, Starvest has key positions in Oracle Coalfields PLC (LON:ORCP), Ariana Resources plc (LON:AAU) and Salt Lake Potash (LON:SO4).
“We only invest in equities,” explains Baxter.
We’ll look at the TSX, NEX, the ASX and AIM, but we’re mostly interested in AIM stocks. We’re also interested in private investments that may go public. There are many investments that we have on the books at the moment that have increased in the last 12 months. Greatland has increased by five times and our NAV gets more and more robust every month.”
So what’s Baxter’s view of the market currently, given the changes that we’ve witnessed over the past 12 months or so?
“We’ve certainly seen the worst of it,” he says. “Things have improved markedly since the start of last year, although just at the minute we’re on a bit of a plateau waiting for a lead from the US. There’s been quite a lot of talk – now we’re waiting to see the follow-through.”
Nuanced question
Where that means investors should be weighted is a more nuanced question.
“Even though the commodities cycle has bottomed, we prefer precious metals because of ongoing fiscal issues in the global economy.”
And what does this mean for Starvest?
Well, there’s cash in the bank and the company is currently profitable – a good platform to be jumping off from into the buoyancy in the markets.
“We’re actively looking at good opportunities all the time,” says Baxter. “We’re in a solid position with a good portfolio and we’re looking to add other opportunities.”
All in all, there should be plenty of activity ahead.