Editing Molten Ventures (section)

==Valuation: Molten justifies a premium to peers==

Molten Ventures’ most direct competitors are private European VC firms such as Accel Partners, Balderton Capital, Index Ventures, Northzone and Partech Partners. However, there is also a growing number of listed peers following the IPOs of Forward Partners and Seraphim Space Investment Trust in 2021 (Exhibit 16).

Sector valuations fell markedly in Q421/YTD, with renewed concerns over rising interest rates, high technology valuations and as part of a cyclical market rotation out of growth and towards value shares.

Molten’s NAV returns have a relatively low correlation to listed equity markets, as valuations of private technology companies take time to adjust to public market valuations, supporting portfolio diversification and reducing the overall level of portfolio volatility.

Molten Ventures offers a diversified technology investment portfolio that has delivered a consistent track record of growth and, after its strong performance in 2020 and 2021, management has demonstrated why we believe Molten warrants trading at a premium to its peer group as a mature and rapidly scaling leader in the technology VC sector. As technology valuations come under pressure, this will be the time for Molten Ventures to show it can offer NAV returns uncorrelated with the wider market. Molten Ventures trades on 0.82x H122 NAV (0.78x our estimate of FY22 NAV), in the top half of its peer group, recognising the group’s market-leading five-year NAV/share CAGR H117–H122 of 20%. In our view, the discount to NAV offers a potentially attractive entry point for investors.