The Lemon Fool

An unsual buy-in to an existing VCT manager.

http://www.investegate.co.uk/elderstree ... 0727H9058/

Draper Esprit plc ("Draper Esprit"), a leading AIM and ESM listed venture capital firm involved in the creation, funding and development of high-growth digital technology businesses, has acquired a 30.77% stake in Elderstreet Holdings Limited, the holding company of Elderstreet Investments Limited ("Elderstreet"). Draper Esprit also has an option to acquire the balance of the Elderstreet Holdings Limited shares in due course.

Draper Esprit has a significant pipeline of dealflow in high growth technology businesses which it will share with Elderstreet VCT, which will be able to co-invest alongside Draper Esprit-managed funds.

Interesting. Sounds like a genuine synergy.

Is this a positive signal: someone wanting to buy in to the VCT industry after its wings have been clipped? Or a negative one: the shaking out of a small player from a weakened industry? Since it's not actually a takeover, one might lean towards the former.

127tolmers wrote:An unsual buy-in to an existing VCT manager.

http://www.investegate.co.uk/elderstree ... 0727H9058/

Draper Esprit plc ("Draper Esprit"), a leading AIM and ESM listed venture capital firm involved in the creation, funding and development of high-growth digital technology businesses, has acquired a 30.77% stake in Elderstreet Holdings Limited, the holding company of Elderstreet Investments Limited ("Elderstreet"). Draper Esprit also has an option to acquire the balance of the Elderstreet Holdings Limited shares in due course.

Draper Esprit has a significant pipeline of dealflow in high growth technology businesses which it will share with Elderstreet VCT, which will be able to co-invest alongside Draper Esprit-managed funds.

Following on from the above announcement of November 2016, I have received a letter from Draper Esprit VCT (formerly Elderstreet VCT) which reports that

the planned acquisition of the Company's Investment Manager , Elderstreet Investments Limited, by Draper Esprit plc, has now been finalised.

There is to be a closed General Meeting on 17th March 2021 to which investors will not be admitted. This will include a proposal to approve the New Investment Management Agreement. Ploughing through the pages describing this new agreement, I came across the reason for a new performance incentive, namely

A previous performance incentive was introduced in 2010. The Directors are of the opinion that this scheme is no longer an effective incentive as the hurdle is no longer realistically achievable, particularly after the fall in valuations that the Company experienced at the start of the coronavirus pandemic.

What's the point of a performance incentive, if you still hand it out for under performance? I remember, many years ago, Artemis VCT tried such an adjustment - but faced with much opposition, they did not proceed with it.

The Circular also announces that the Company has launched a new offer for subscription - details at the website http://www.draperespritvct.com (not draperespitvct as stated in their circular). The corrected link will take you to a front page which proclaims

Draper Esprit VCT
A leading UK venture capital fund manager
Managed by Elderstreet Investments

Not the clearest of who manages whom statements.

Result of Draper Esprit (formerly Elderstreet) VCT General Meeting on 17th March 2021

https://www.lse.co.uk/rns/DEVC/draper-esprit-vct-plc-result-of-general-meeting-cj39y5ekt4c64u3.html

Total Voting Rights 110.7M. Votes Cast for each Resolution 10.2M
The votes cast against Resolution 1 "Entry into the New Investment Management Agreement with Elderstreet Investment Limited " were 0.35M.
This agreement "improved" (for the management) the Performance Incentive.

I voted against, but I fear that my previous comment fell on mainly deaf ears:-

What's the point of a performance incentive, if you still hand it out for under performance? I remember, many years ago, Artemis VCT tried such an adjustment - but faced with much opposition, they did not proceed with it.

Damn, missed that.

I've subscribed for the first time in this year's offer. Need to add it to my RNS feed. Should've paid attention to your previous post, and at least made a (more) informed decision.

RNS Today - Offer for Subscription Closed.

The Board of Draper Esprit VCT plc is very pleased to announce that offer for subscription which launched on 16 February 2021 has reached capacity of £20 million (being £5m plus the overallotment facility of £15 million) and no further applications will now be accepted.

More name changes for Elderstreet. It moved from Elderstreet VCT to Draper Esprit VCT, and now the board expects to change the name of the VCT to Molten Ventures VCT plc. Apparently Draper Esprit plc has been recently rebranded as Molten Ventures plc. All info is from the Chairman's Statement (dated 13/12/21) in the Half-Yearly report to 30/9/21 which arrived through the letterbox today. The VCT name change is proposed to take place "next year" - which I assume is 2022.
Its a strange name - I think I would have preferred Rock Solid Ventures, or Cast Iron Ventures
I wonder when we should expect another name change.

Was ther not a venture capitalist with a name like that ?

I have held Elderstreet for some years now and I am still waiting for a substantive dividend flow to start. Changing the name etc and bringing Draper on etc strikes me of promises tomorrow. I am sure that it signals that these managments are dynamic.

Karellan wrote:Was ther not a venture capitalist with a name like that ?

I think you are thinking of Jon Moulton.

I get rather twitchy (and start heading for the door) when these funds start changing their name.

Boots wrote:I get rather twitchy (and start heading for the door) when these funds start changing their name.

So did I.

When Matrix changed their name to Mobeus it stoked my twitchiness. And thus it was that my best-performing VCT family of all over the period I've held was (and is) a smaller part of my portfolio than it might have been.

Indeed name changes , alterations , mergers , high profile announcments etc make it harder to ascertain what the actual return is. Its hard enough when it is going well.

A mere name change doesn't obscure the record. Mergers do, and rebasings are a gotcha. But then, routine return of capital - especially capital-depleting special divis - also frustrate comparisons.

I note the name Draper Esprit hasn't changed at WealthClub. And it's now a featured offer, with Pembroke, Albion, Baronsmead and Northern.

Draper Esprit (the plc) changed its name to Molten Ventures last year.

But Draper Esprit VCT is still called that… for now.

Its offer was already open at the time of the plc’s name change. So I’m sure it will wait for the dust to settle before following suit.

When I bought in 2016/17 it was called EDV then it became DEVC and now it will change again. Are trying to establish the best name for it ?

Karellan wrote:When I bought in 2016/17 it was called EDV then it became DEVC and now it will change again. Are trying to establish the best name for it ?

How much does this nonsense cost shareholders?

Karellan wrote:When I bought in 2016/17 it was called EDV then it became DEVC and now it will change again. Are trying to establish the best name for it ?

Same timeline here. I think of it as a teenager struggling with their identity! I'd drop it in April when the five year anniversary comes up, but the performance has been quite reasonable.

UncleEbenezer wrote:How much does this nonsense cost shareholders?

Too true UncleEbenezer , in a Buffetesque way we should avoid companies that spend shareholders money on glittering promises and great corperate events.

Boots wrote:Same timeline here. I think of it as a teenager struggling with their identity! I'd drop it in April when the five year anniversary comes up, but the performance has been quite reasonable.

It started in 1996 ! , my finding has been that the dividend return has been mediocre and the share price return weak. I think that they sporadically have a bumper special dividend and possibly one is due (with luck anyways). If the investment needs luck to work then I personally would not buy more.

Karellan wrote:It started in 1996 ! , my finding has been that the dividend return has been mediocre and the share price return weak. I think that they sporadically have a bumper special dividend and possibly one is due (with luck anyways). If the investment needs luck to work then I personally would not buy more.

I can only comment on what I have seen during my ownership - no special dividends, just a steady 7% (on my net cost) and a reasonably steady asset price. Not great, but OK.

I may be setting the bar too low, but it passes my tests at the moment.

Boots wrote:

Karellan wrote:It started in 1996 ! , my finding has been that the dividend return has been mediocre and the share price return weak. I think that they sporadically have a bumper special dividend and possibly one is due (with luck anyways). If the investment needs luck to work then I personally would not buy more.

I can only comment on what I have seen during my ownership - no special dividends, just a steady 7% (on my net cost) and a reasonably steady asset price. Not great, but OK.

I may be setting the bar too low, but it passes my tests at the moment.

Seems to be a rising asset price - unusual for a VCT. Though perhaps just short-term?

I bought (last minute) in last year's offer at 54.4p including offer costs, so I'd guess that'll be a NAV in the 53p ballpark and share price around 50p. Now it's a 58p share price. Plus two respectable divis. Given that my choice was dictated in part by the timing (most popular offers had closed) I ain't complainin' too loudly.