REG - Onward Opportunities - Admission to AIM and First Day of Dealings

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30/03/2023 08:15

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RNS Number : 6708U  Onward Opportunities Limited  30 March 2023

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30 March 2023

Onward Opportunities Limited

("Onward Opportunities" or the "Company")

 

First Day of Dealings on AIM

 

Newly launched investment company with UK smaller company focus

 

Onward Opportunities Limited, the newly incorporated Guernsey incorporated
non-cellular (closed-ended) investing company, is delighted to announce the
admission of its entire issued ordinary share capital to trading on AIM, a
market operated by the London Stock Exchange plc ("Admission").

 

Admission will take place, and dealings in the Company's ordinary shares of no
par value ("Ordinary Shares") will commence, at 8.00 a.m. today under the
ticker 'ONWD'.

 

Key Highlights:

 

·    The Company's investment objective is to seek to generate
risk-adjusted absolute returns to shareholders through investments in UK
smaller companies. Returns are expected to be principally derived from capital
growth over a target three to five-year holding period with an appropriate
diversification of investment risk.

 

·    Dowgate Wealth Limited will provide portfolio management services to
the Company, with the investment team led by Investment Director Laurence
Hulse (the "Portfolio Manager").

 

·    The Board and the Portfolio Manager therefore believe that a
structural market opportunity exists in the UK smaller companies sector which
can be exploited through the deep industry experience of the Portfolio
Manager. The Board and the Portfolio Manager consider that implementing an
active investment approach to investment identification and position
management can lead to increased returns by targeting these inefficiencies.

 

·    Dowgate Wealth is an employee-owned, private company founded in 2020
by former Hargreave Hale colleagues. As at 30 January 2023, Dowgate Wealth has
assets under administration in excess of £495 million.

 

·    In connection with Admission, the Company has conditionally raised
Gross Proceeds of c.£12.8 million of initial capital pursuant to the Placing
at a price of 100 pence per Placing Share. Net Proceeds are intended to be
invested in accordance with the Company's investing policy.

 

·    The ISIN of the Ordinary Shares will be GGOOBMZR1514, the SEDOL of
the Ordinary Shares BMZR151 and the Company's LEI number 2138000P1Q2B3E09LE92.

 

Cenkos Securities plc ("Cenkos") is acting as Nominated Adviser, joint broker
and joint bookrunner to the Company. Dowgate Capital Limited ("Dowgate
Capital") is acting as joint broker and joint bookrunner to the Company.

 

All capitalised terms used in this announcement and not otherwise defined
shall have the meanings given to them in the Company's admission document
dated 23 March 2023. The Company's admission document is available for viewing
at www.onwardopportunities.co.uk (http://www.onwardopportunities.co.uk) .

 

Laurence Hulse, Investment Director of Dowgate Wealth, commented:

 

"We are pulling together for clients, the three core ingredients to make
money; a clear market opportunity, a bespoke strategy to capture it and the
people required to execute the plan. This launch puts in place the foundations
to grow an investment company that can actively engage with UK smaller
companies we identify value in. I would like to extend my thanks to our seed
investors and the whole team for providing this fantastic onward opportunity
to build upon."

 

Andrew Henton, Chairman of the Board, Onward Opportunities Limited added:

 

"We believe that a structural market gap in the market exists within UK
smaller companies which can be exploited through the deep industry experience
of the investment team. We recognise that implementing an active approach to
identifying these companies, and engaging with them, can support the SMEs that
are the driving wheels of enterprise in the UK and lead to increased returns
by targeting these inefficiencies."

 

Mark Chadwick, Chief Executive Officer, Dowgate Wealth added:

 

"Dowgate Wealth is excited to be launching our first investment company, which
sits right at home amongst the team's small cap investing heritage. The market
volatility of 2022 has created a statistically interesting time to deploy
capital into robust, well-researched investment ideas in the UK. We are
confident that Onward Opportunities will prove to be a popular proposition for
investors looking for an innovative product that can provide absolute
returns."

 

FOR FURTHER ENQUIRIES:

 

 Onward Opportunities Limited                                Via Share Communications

 Andrew Henton, Chairman

 Dowgate Wealth Limited (Portfolio Manager)                  Via Share Communications

 Laurence Hulse, Investment Director

 Share Communications                                        Tel: +44 (0) 20 7071 3932

 Zoe Powell / Eleanor Mitchell                               team@sharecomms.co.uk

 Cenkos Securities plc (Nominated Adviser and Joint Broker)  Tel: +44 (0)20 7397 8900

 Ben Jeynes / Camilla Hume / Dan Hodkinson / Hamish Waller

 Michael Johnson / George Budd (Sales)

 Dowgate Capital Limited (Joint Broker)                      Tel: +44 (0)12 9351 7744

 Russell Cooke / Nicholas Chambers

 

To find out more, please visit: www.onwardopportunities.co.uk
(http://www.onwardopportunities.co.uk)

 

Overview of Onward Opportunities

 

Investment objective

 

The Company will seek to generate risk-adjusted absolute returns for
Shareholders through investments in UK smaller companies. Returns are expected
to be principally derived from capital growth over a target three to five-year
holding period with an appropriate diversification of investment risk.

 

Investing policy

 

The Company will seek to achieve its investment objective by investing
primarily in equity and equity-related securities of UK smaller companies that
are predominantly listed or admitted to trading on markets operated by the
London Stock Exchange, and where it is considered that there is a material
potential valuation upside that can be delivered from catalysing strategic,
operational or management initiatives.

 

In order to ensure that the Company is able to maintain its approach of active
engagement with investee companies, and to encourage and support value
creation, the Company will typically target meaningful minority stakes in
investee companies of between 5 per cent. And 25 per cent. Of the issued share
capital.

 

Whilst the Company has no limitation on the size of the companies in which it
can invest, the Company typically expects to invest in companies with market
capitalisations of no more than £250 million (with a particular focus on
those below £100 million) at the time of investment. The Company will
therefore focus on investments in the ''micro'' smaller companies sector and
on companies admitted to trading on AIM.

 

Investee companies will typically have certain of the following
characteristics:

 

·    balance sheet asset backing;

·    a competitive advantage and/or strong management track record;

·    attractive cash flow potential;

·    visibility of earnings/future earnings improvement;

·    potential for liquidity and/or exit in line with the Company's
targeted hold period;

·    scope for an active shareholder to trigger value creation; and/or

·    foreseeable events and catalysts to unlock intrinsic value.

 

Investments may be either direct investments made by the Company, or indirect
investments made by the Company through similar funds or investment vehicles.
The Company may make its investments for cash or for share consideration.

 

Although investments will not be restricted to specific sectors, the Company
does not expect to pursue or make investments into companies in the
biotechnology sector or in companies directly involved in extractive
industries (such as mining or oil and gas).

 

Whilst the Company will initially seek to take minority stakes in investee
companies of between 5 per cent. And 25 per cent. And will not typically seek
to take majority positions in investee companies, it will not be restricted
from taking a majority position if considered appropriate by the Portfolio
Manager.

 

The Company's portfolio is expected to be relatively concentrated, with a
typical investment being between 2 per cent. And 10 per cent. Of Net Asset
Value at the time of investment. This is expected over time to result in a
portfolio of approximately 10 to 15 high conviction investments and a further
5 to 10 smaller portfolio holdings, in companies operating in a number of
industries and geographic locations.

 

Whilst the Company will target an investment holding period of three to five
years, actual holding periods and exit strategies will depend on the
underlying investment, the availability of exit opportunities and the size of
the Company's investment. The Company may therefore dispose of investments
outside of the target timeframe should an appropriate opportunity arise.

 

The Company may hold cash in its portfolio from time to time to maintain
investment flexibility. There is no limit on the amount of cash which may be
held by the Company at any time.

 

Investment restrictions

 

The Company will observe the following investment restrictions:

 

·    the maximum investment in any single investee company will be no more
than 15 per cent. of Net Asset Value at the time of investment

 

·    no more than 10 per cent. of Gross Asset Value at the time of
investment will be invested in securities listed or quoted on listing venues
other than markets operated by the London Stock Exchange (without the explicit
written consent of the Board);

 

·    no more than 25 per cent. of Gross Asset Value at the time of
investment(s) will be in unquoted securities including, inter alia, in
unlisted shares or other unlisted instruments such as convertible loan notes
issued by quoted companies, rights, options, warrants, bonds and notes; and

 

·    no more than 20 per cent., in aggregate, of the Gross Asset Value at
the time of investment will be in other listed closed-ended investment funds.

 

Sector expertise and established track record

 

The Company has an investing policy overseen by a strong Board with extensive
relevant experience and implemented by an experienced AIFM and FCA-authorised
Portfolio Manager. The Investment Team and the Investment Committee have, in
aggregate, more than 160 years' of collective, relevant experience and
performance and members have worked together before on this specialist
investment approach. This is supported by the Dowgate Wealth team's long
history investing in UK smaller companies during their time at Hargreave Hale.

 

Market opportunity

 

The Board and Portfolio Manager believe that there are compelling structural
factors underpinning the investment strategy and that prevailing market
conditions create an environment in which the Portfolio Manager has the
ability to generate aggregated portfolio returns in excess of 15 per cent. per
annum over the long term.

 

Pipeline of investment opportunities

The Portfolio Manager is continuously reviewing and considering investment
opportunities. Investment by the Company in any opportunity is subject to,
inter alia, the Portfolio Manager completing satisfactory due diligence and
documentation and the Company having sufficient cash resources available.

 

The Board intends that the Net Proceeds will be substantially invested within
a period of twelve to eighteen months after Admission (subject to market
conditions) and that the Company will remain substantially or fully invested
thereafter.

 

There can be no assurance that any of the opportunities currently under review
by the Portfolio Manager will be completed or will be purchased or funded by
the Company.

 

DOWGATE WEALTH

 

Dowgate Wealth is an employee-owned, private company founded in 2020 by former
Hargreave Hale colleagues. The founders wanted to move away from industry
trends and focus solely on the objectives of their individual clients by
delivering a high-quality service via bespoke portfolio management. As at 30
January 2023, Dowgate Wealth has assets under administration in excess of
£495 million and offers services across fund management, wealth management,
advisory stockbroking and discretionary portfolio management.

 

INVESTMENT COMMITTEE

 

Laurence Hulse - Investment Committee Member

 

Laurence joined Dowgate Wealth in 2022 from Gresham House where he spent seven
years in investment roles, latterly as a Citywire AA-rated manager working as
part of the small team to achieve two FE 5-Crown rated funds; Gresham House
Strategic plc (now called 'Rockwood Strategic plc') and Gresham House UK
Smaller Companies Fund. He also joined the Board of The Lakes Distillery plc,
as a Board observer, following an investment by Gresham House Strategic and
Gresham House Multi-Cap Income fund via Convertible Loan Note. In 2021
Laurence was nominated for Investment Week Investment Company Rising Star of
the Year Award.

 

Mark Chadwick - Investment Committee Member

 

Mark began his investment management career in 1994 at the Hargreave Hale
Blackpool office and subsequently moved to the Hargreave Hale London office to
work with Giles Hargreave in 1997. Mark assisted in managing the Marlborough
Special Situations fund, UK Micro-cap and Nano-cap funds from their launch
before taking over sole management of these mandates in 2014. Mark co-founded
Dowgate Wealth in 2020 and today manages a team of 25 and is the Lead Fund
Manager of the SVS Dowgate Wealth UK Small Cap Growth Fund. He also continues
to manage c.£190 million of bespoke private client mandates with a focus on
growth stocks, particularly in UK mid/small cap companies which has remained
his focus throughout his 29 years in the industry.

 

Tom Teichman - Investment Committee Member

 

Tom started his career at Willis Faber & Dumas and then William Brandt's
Sons & Co., becoming head of European merchant banking. Over the next 40
years he has sat on various credit and investment committees whilst working at
Bankers Trust Company, Credit Suisse, Finanz AG, Mitsubishi Finance
International, Bank of Montreal Nesbitt Thomson, NewMedia Investors, SPARK
Ventures (which he co-founded), The Garage Soho (which he co-founded) and
Gresham House Strategic, where he worked directly with Laurence Hulse.

 

Tom was personally, or through investment vehicles he established, a very
early-stage investor in MAID, Argonaut Games, ARC Risc Cores, lastminute.com,
mergermarket.com, System C, Notonthehighstreet.com, made.com,
moshimonsters.com, Kobalt Music Group and IMImobile. He served on the boards
of almost all of these companies, in some cases as chairman, advising on
growth, funding and exit strategy. Some of these eventually went public or
were acquired by major corporations, including The Financial Times and Oracle,
and/or achieved valuations of over £1 billion.

 

Tom has a B.Sc. (Econ.) Hons. from University College, London and was born in
Hungary. He has seven years' experience in investment strategies similar to
those to be employed by the Company, including sitting on the investment
committee of Gresham House Strategic and Strategic Public Equity Fund LP,
where he worked with Laurence Hulse and the rest of the team. He has over 30
years' experience in venture capital and banking and has chaired or been a
member of several credit and investment committees including the Gresham House
Strategic Public Equity Investment Committee where he worked directly with
Laurence Hulse from its inception.

 

David Poutney - Investment Committee Member

 

David is Chief Executive of Dowgate Capital and Chairman of, Dowgate Wealth,
and Dowgate Group. His early career was in commercial banking and asset
finance, after completing a history degree from Cardiff University in 1974. He
made the transition into stockbroking a few years ahead of the Big Bang,
becoming a number one rated financials analyst for 15 years at a number of
well known firms including BZW, James Capel and UBS. He moved into a broader
role in corporate broking during the DotCom boom of the 1990s and was involved
in the flotation of a number of companies which survived the crash, notably
Sports Internet Group which was taken over by Sky. After joining Numis in 2001
as head of corporate broking, he was responsible for a number of growth
companies such as Dominos Pizza, Alliance Pharma and Learning Technology
Group. Overall, he was involved in the flotation of over 30 companies.

 

In addition to his positions at Dowgate Group, David is a non-executive
director of AIM-quoted Franchise Brands plc and Belluscura plc and previously
of Be Heard plc which was also quoted on AIM before being sold to a private
equity firm.

 

Jay Patel - Investment Committee Member

 

Jay is the Vice President and General Manager of Cisco's Webex CPaaS
initiative and joined Cisco when the company he ran, IMImobile, was acquired
for US$730 million in 2021. He helped start IMImobile PLC in 2003, as CEO led
it to a successful IPO in 2014 and then delivered its exit to Cisco. Today Jay
is working on combining the IMI platforms with relevant technologies from
Webex to create solutions that help clients deliver the world's best customer
experiences.

 

IMImobile was an investment for the Strategic Equity Capital team at Gresham
House between 2015 and 2019, being one of its best performing assets. The
investment delivered a 23.7 per cent. IRR and for a number of years Gresham
House (via its managed funds) was IMImobile's largest shareholder.

Jay is an experienced technology executive with over 25 years' commercial
experience through operational, investment and advisory roles. He has had a
successful career working with fast growth businesses and has served as both
an executive and non-executive director on the boards of both private and
public companies over the last 20 years.

 

Previously, Jay was a co-founder of venture capital firm Spark SPARK Ventures
PLC (an early stage venture capital firm), where he led several successful
investments, restructurings and exits in the technology sector across digital
media and publishing, B2B software and B2C eCommerce. Jay has also worked in
corporate finance roles at UBS Warburg and BSkyB and qualified as a Chartered
Accountant with KPMG. He has an MBA from INSEAD and an Economics degree from
the London School of Economics.

 

BOARD OF DIRECTORS

 

Andrew Henton - Independent Non-Executive Chairman

 

Andrew is currently a director of Pershing Square Holdings Limited, a
closed-ended investment company domiciled in Guernsey. He also currently
serves on the Boards of several private entities. Andrew is Chair of the Board
of Butterfield Bank Jersey Limited and a member of the Board and Chair of the
Audit and Risk Committee of Butterfield Bank Guernsey Limited, which acts as
Custodian and principal banker to the Company. Andrew is also a member of the
Board and Chair of the Audit & Risk Committee of Longview Partners
(Guernsey) Limited, Chair of the Board of SW7 Holdings Limited and a director
of Close Asset Management (Guernsey) Limited, Tadaweb SA and Rain Foundation
LBG. Andrew is a non-executive director on all of the Boards on which he
currently serves. Andrew was previously Chair of the Board of Boussard &
Gavaudan Holding Limited and a member of the Board of Equity Bridge PCC
Limited and Northill Global Strategies SPC. Between 2002 and 2011 Andrew held
various positions at Close Brothers Group plc, latterly acting as Head of
Offshore Businesses. During this time, he led the creation of Close Private
Bank, which provided asset management, banking, and administration services to
high net worth and institutional clients. Andrew previously spent four years
working in HSBC's Corporate Finance division and three years as a Fund Manager
with Baring Private Equity Partners. He is a qualified Chartered Accountant
and obtained his MA in Modern History from St John's College, Oxford.

 

Susan Norman - Independent Non-Executive Director

 

Susan has over 20 years of boardroom experience, formerly in company
secretarial roles and most recently through non-executive director roles
across a wide range of companies in multiple jurisdictions. She is currently a
non-executive director of a number of Terra Firma Capital Partners Limited's
Guernsey-based private equity vehicles. Susan started her career within the
private banking and fund of hedge funds sectors and now runs her own
consultancy business providing company secretarial, governance and independent
directorship services to a broad range of clients across various
jurisdictions. Susan's board experience covers public and private equity
investment companies, real estate investment companies and impact investment
funds, amongst others. She holds an LLB (Hons) degree in Scots Law from the
University of Strathclyde, is a Fellow of the Chartered Governance Institute
and holds the Institute of Directors' Diploma in Company Direction.

 

Henry Freeman - Independent Non-Executive Director

 

Henry sits on the States of Guernsey Investment Board, overseeing the
sovereign reserve, social security and civil service pension funds for the
Crown Dependency, as well as a number of other commercial investment fund
Boards. He Chairs the Guernsey Investment & Funds Association (GIFA)
Managers' Committee and holds the Institute of Directors' Diploma in Company
Direction. Henry has held senior and board director roles over a 25-year
career in investment banking, fund management and fintech in London and the
Channel Islands. During his executive career he has advised companies, funds
and Boards; run global equity, multi-asset and private equity funds as well as
private client and ESG portfolios; raised institutional and retail capital for
publicly listed and private investments. He has extensive experience in the
London-listed funds and alternative assets space - both sell-side capital
markets advisory, structuring and broking and buy-side investing. He has
established and grown financial businesses; sat on two All Party Policy Groups
in Westminster and has been a regular contributor to various media and events.

 

Luke Allen - Independent Non-Executive Director

 

Luke is an independent non-executive director with over 30 years' experience
working in the financial services sector, the last 18 of which have been spent
in the investment funds industry. Until December 2019 he was the chief
executive and managing director of Man Group plc's Guernsey office, which
serviced an extensive range of hedge funds and funds of hedge funds. His
primary role was to lead Man Group's operations in Guernsey, chairing the
local management company boards, setting strategy and ensuring effective risk
management, outsourced service provider oversight, and compliance with laws
and regulations. He has over 13 years' experience (in both an executive and
independent non-executive capacity) of working with, and sitting on the boards
of, a wide range of fund and management company structures across various
asset classes and international jurisdictions. He is a chartered accountant
(ICAEW) and, prior to running Man Group's Guernsey office, he headed up their
fund financial reporting and liquidations team, with responsibility for the
production of fund financial statements and for fund terminations across their
entire product range. He has completed the Institute of Directors' Diploma in
Company Direction and is the holder of a personal fiduciary license issued by
the Guernsey Financial Services Commission.

 

 

 

 

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