WHAT WE EXPECT FOR PORTFOLIO INFORMATION FLOWS

TRACKING THE RESULTS; PREPARING FOR THE FUTURE

At RCP, we get involved with and monitor our portfolio companies at various levels.  For some we hold Investor Director Board seats; for others, we just get irregular, informal updates.  For others, we've found ourselves intimately involved in operational management when the situation calls for it.  

In this post, I wanted to give a taste of what we expect and aim for when it comes to reporting on and valuing our portfolio.

Our relationship with Founders begins just after the initial investment.  We try to meet regularly and get trackable information, so we can follow the trajectory of the business.  Ideally, we come away with concrete, objective data that we can use to create some value markers.  The question we want to answer:  Is it growing in some form- revenue, net profit, customers, etc- and tracking to its projections.   A solid measure is ever increasing valuations at fundraising points.  

We maintain a Portfolio Tracker so that we can monitor, reflect and project these data points.  This gives us some level of comparison over time and a method to value our entire portfolio, albeit imperfectly.  

There are some added benefits to this reporting.  We can prepare for risks, cash calls, exits and get more involved operationally to help the business.

What are some of the issues to overcome:

  • Irregular data- as startups, some companies are constantly refining their management information presentation.
  • Inconsistent access over time- With one company, we held observer rights for Board meetings, then when a large VCs came in, we gave up our position (quite rightly), and we now have a less complete view.
  • Valuation objectivity- It's possible to use revenue and net income numbers for valuation, but may not give a true market picture.  And even the last fund raise valuation may be misleading because it may be dated or over-inflated.

The nature of the beast in early VC investing is constantly changing management information.  Hopefully, that is down to growth; sometimes it's not.  We just want to make sure we're keeping an open line of communication and getting some sense of value inflection points.  

Alicia Huertas
MAKING THE WORLD A BETTER PLACE

RCP LOOKS TO EMERGING TECH TO SOLVE HEALTH ISSUES

A key focus for RCP is on making the world a better place through emerging biotechnology.  We want to fund start-ups who are developing key technology in the fight against cancer and other debilitating diseases.

Over the last few years, we’ve backed the strong management teams fighting big problems.  Here is a sample:

TC BioPharm is currently developing the closest to market drug candidate in Gamma Delta T cell therapies. These cells are naturally-occurring within the human body, inducing one of the first lines of defense against infectious disease.  Their work focuses on priming these cells to attack and destroy pathogens within the body.  Why is this important? Because TCBio is harnessing the body’s own immune system to fight cancer.

Centauri Therapeutics is developing new ways to treat bacterial infections.  Many infections nowadays are resistant to existing antibiotics. Centauri is bringing to market new ways for the immune system to find and destroy bacteria and cancers.  Why is this important?  Bacterial infections are responsible for the deaths of 700,000 people worldwide a year.

Micrima has developed the MARIA breast cancer screening system. This imaging system uses harmless radio-waves to detect breast cancer, unlike mammography that uses ionising radiation.  The process gives a clearer picture and is less invasive than the current methodology.  Why is this important?  Because it helps doctors find and treat tumors more quickly by reducing the false positives in current screening. 

And we've been looking at other companies doing things like-

·       Developing 3D printing for orthodontics.

·       Dendritic cell therapies for tumor reduction.

·       Technologies that reactivate the immune system to fight cancer. 

So, if you’re developing new technologies in this space, get in touch.  We want to support emerging biotech efforts to make the world a better place. 

Alicia Huertas
Year in Review- 2017

RCP saw a successful close to 2017, both in venture capital and real estate development. 

This post is a review of what we did to support our investment strategy over the last 12 months.  Chief Operating Officer Adam Park commented “The year presented several great opportunities- for investing, realising gains and solidifying our niche in what we do”. 

Venture Capital:

RCP continued it’s focus over the last 12 months on high growth, innovative businesses. We put to work close to £2.2m in new and existing businesses, both in the form of equity and convertible debt. At the end of 2017, the portfolio was conservatively valued at approximately £7m.  Highlights included-

·      Adding to our earlier seed funding in AMTE- bringing new energy storage solutions to UK manufacturing. 

·      Backing a convertible note in TC Biopharm, which is focused on beta delta t-cells and their fight against cancer. 

·      Joining the management company for NCL Technology Ventures, to leverage our investing thesis in the life sciences sector. 

Going forward, RCP will build upon it’s focus on emerging technologies that make lives better and emphasise life sciences as a theme for it’s venture capital investments. 

Real Estate

RCP continued to improve the built environment in and around London in 2017.  Our development portfolio saw significant milestones through the-

·      Selling of the remaining flats at our Randall Court development in Elephant & Castle. 

·      Tendering and construction of the Penthouse and Commercial unit at Randall Court. 

·      Final works on Park View, ready for marketing in the Spring 2018.

All of these helped markedly increase the profitability of our projects over the last 3 years.

With funds to recycle into further development projects, RCP put a half-dozen potential sites through our development appraisal process. Most of these didn’t show the necessary ROI to take forward.  But, with dry powder and a buyer’s market, we’re confident that 2018 will unearth several possibilities. 

The built environment of London, and the surrounding counties, is an emerging theme for our development portfolio.  In 2018, RCP will look to focus on bringing premium quality homes to the residents of London. 

Renaissance Capital Partners Ltd. is a private company established in 2008 to invest funds in high-growth, innovative and entrepreneurial businesses. It now has a diversified investment portfolio across various industries including Healthcare, FCFM, Media, Clean Tech and real estate development.

Alicia Huertas
RCP EXITS FC FUND MANAGEMENT AT SIGNIFICANT PREMIUM

PROVIDING AN OPPORTUNITY TO RECYCLE FUNDS INTO GROWTH SECTORS

Renaissance Capital Partners, a leading-edge family office, completed a sizeable di-investment out of FC Fund Management, a distressed opportunity fund based in London, it announced today.  RCP’s decision followed a restructuring of the ownership of the FCFM business, which will allow RCP to further expand its pipeline of innovative investments.  RCP had supported the business through several investment rounds, over several years. 

Mark Randall, Managing Director of RCP, remarked “This was an excellent opportunity to realise a great profit, and move money into other high-growth opportunities.  We constantly scan our investment horizon for opportunities that balance risk and reward.”

With an expanding pipeline of opportunities, RCP is looking forward to putting the recycled funds to work.  It’s current holdings in bio-tech are gaining momentum and the remaining portfolio is showing growth. 

Renaissance Capital Partners Ltd. is a private company established in 2008 to invest funds in high-growth, innovative and entrepreneurial businesses. It now has a diversified investment portfolio across various industries including Robotics, Healthcare, Location Based Services, Clean Tech and Telecoms.

FCFM Group is a privately owned investment firm undertaking principal investing. 

Alicia Huertas