Early-stage technology investor Forward Partners reported “strong” ventures portfolio growth in a full-year trading update on Monday, reporting that it was expecting growth through to the end of 2021 to be in line with expectations.
The AIM-traded firm said its investment momentum was on track, with £5.3m invested since 1 July, taking the total for the year ended 31 December to £8.8m.
It also described a “strong and growing” pipeline of investment opportunities, with “exciting” early-stage deal flow from the UK startup ecosystem, and follow-on rounds from scaling companies within Forward’s portfolio.
At the same time, its “maturing” ventures portfolio was seeing its first significant exits, with sales of shares in Wonderbly and Heights totalling £5m, representing internal rates of return of 103% and 29%, respectively.
Forward Advances was also said to be continuing to grow, with 2021 originations of £9.5m, and 13x growth in its first full year of operations.
Write-offs within the 2021 cohort were higher than expected, however, totalling £0.8m or 8.0%, although that rate was expected to trend down for the 2022 cohort, and to 1% in the long term.
Forward Partners said its ventures portfolio momentum was expected to continue into 2022, as the board reiterated its guidance of 20% per annum growth over the cycle for the year, exclusive of new investments.
The company’s cash position at the end of the year was £32.1m.
“We’re really pleased to announce strong results for our first year as a listed business,” said chief executive officer Nic Brisbourne.
“They highlight the great underlying revenue growth momentum in our portfolio, particularly when considered against the headwinds of comparable valuations in public markets that drive our valuations.
“These are uncertain times, but we move forward with confidence,” Brisbourne said, adding that early-stage venture was a “patient” investment.
He said the company believed firms that focussed on sourcing and supporting businesses that demonstrated “strong fundamentals” from the start were more likely to deliver good returns, and demonstrate resilience in the face of market corrections, adding that the strategy was paying off.
“We’ve not only seen great early-stage deal opportunities this year – as our portfolio matures, we encounter an increasing number of follow-on investment opportunities from businesses that we know well across both the investment and studio teams.
“Through 2021, we have focused on these fundamentals – strengthening core functions, expanding the ventures team and building further rigour into Advances operations and underwriting puts us in good stead to deliver predictable growth.
“We’re excited to capitalise on the opportunities ahead to unlock value and deliver growth through the next year.”
At 1009 GMT, shares in Forward Partners Group were down 2.56% at 95p.