Is an Institutional Investor on the cards for SEED Innovations?
“…Seed’s portfolio is in line with and significantly outperforming expectations…”
The final results from SEED Innovations reveal few surprises, including the million pound plus reduction in the net asset value of the fund the company manages.
Chief executive Ed McDermott is determined to rectify this in part by being opportunistic. Ironically the junior market weakness impacting the stock of the listed company component in the portfolio allows SEED to buy more asset for less money.
McDermott is not saying which sectors they’ll be buying, but at the moment the portfolio has a nice rhythm to it. EdTech, BioTech, Blockchain, wellness, medical cannabis and then there’s Leap Gaming the B2B developer of 3D gaming applications. It’s not in a sector that is a core focus for SEED, but a liquidity event has been long anticipated and ahead of a potential IPO, a further end-of-calendar year investment has been made.
McDermott is on the board of Leap and says he’s working with Yariv the CEO on a weekly basis. So, something is cooking because that’s a lot of investment in executive time with McDermott enthusing: “There’s a lot of M&A going on, a lot of traction for gaming stocks, ancillary businesses in gaming and Leap’s really in a sweet spot in that space. I’m really excited about what lies ahead.”
He describes gaming as the outlier against the macro portfolio focus of cannabis, health and wellness which McDermott says “still have all of the right ingredients and these are markets that we’re entirely bullish on.”
He remains bullish generally while sharing his investors’ pain of SEED’s current share price which he sees as an opportunity to buy “pound coins for 50p.” And he would buy if he could, but his position as a NED on Leap’s board prevents him from doing so, but he’s looking for Mr or Mrs 20% investment.
“What we’re missing and what we’d really like to see is an institutional investor with a long term view on the sector that we’re investing in.” McDermott is spending a lot of time getting the institutions comfortable with the cannabis space that SEED has been inhabiting for four years while simultaneously endeavouring to strengthen the net asset value.
Which brings the corporate conversation full circle.
Listen to Ed tell Sarah Lowther about his unflagging confidence about his fund despite the lack of essential corporate advisors available to oversee intended corporate actions.
To see if Ed and Sarah’s assertions that Ed is consistent in his view watch the company’s AGM.
Access #SEED’s corporate presentation here
Follow the company on Twitter – @SEEDInnov
The author was remunerated but does not hold shares in the company