Editing Molten Ventures (section)

== Summary ==

A core tech holding through the cycle

[[File:Molten ventures logo.jpg|150px]]



Molten Ventures is the leading listed venture capital (VC) in Europe, providing liquid exposure to Europe’s high-growth tech start-up ecosystem, through a diversified investment holding company with a proven track record. Following the sell-off of technology and growth stocks, Molten now trades at a 18% discount to the H122 NAV. This is despite Molten delivering a 20% H117–H122 NAV/share CAGR and management’s expectations for c 35% fair value growth for FY22 (implying FY22 NAV/share of c 929p). Molten offers a diversified technology portfolio across multiple segments, delivering the potential for NAV returns uncorrelated to the wider public markets. Management is confident in the outlook for the European technology sector and is focused on its Series B+ growth fund in 2022 to capitalise on the opportunity.

'''Molten’s investor day 2022'''

On 3 March 2022, Molten’s annual investor day showcased the range of companies in which it invests. In his introduction, CEO Martin Davis noted the group’s portfolio remains well funded, with most companies funded for at least the next 12 months, having topped up cash reserves in 2021. He also confirmed Molten remains on track to deliver targeted NAV growth, cash realisations and PBT in FY22. In the headline presentation, Graphcore announced its ‘brain scale’ computer, due in 2024 for US$120m each.

'''Opportunity for Molten to prove its mettle in CY22'''

Driven by the marked rotation out of tech, Molten’s share price has dropped 38% since its peak of 1,180p in September 2021. With a healthy pipeline of investment opportunities, and a portfolio continuing to show strong growth, management is confident that Molten can continue to deliver growth and remains focused on launching its Series B+ growth fund (c £400m fund targeted) in 2022 to capitalise on the opportunity. By deploying third-party capital alongside its balance sheet, the co-investment fund would support Molten to lead deals and secure allocation in an increasingly competitive European technology funding environment.

'''Valuation: 20%+ five-year NAV/share CAGR'''

Investors are in ‘risk-off’ mode amid concerns over rising interest rates, elevated geopolitical risks and high technology multiples. After its strong performance FY21-H122, Molten’s diversified portfolio and consistent track record of growth (five-year NAV/share CAGR of 20%) demonstrate why we believe the group warrants a premium to its peers, as a leading European VC company, in a sector with the potential to deliver strong growth and NAV returns uncorrelated with the public markets. Molten trades at 0.78x our estimated FY22 NAV per share (c 929p), with the discount to NAV potentially offering an attractive entry point to investors.