Admission to AIM and First Day of Dealings

RNS Number : 6708U

Onward Opportunities Limited

30 March 2023

 

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES OF AMERICA (THE "UNITED STATES" OR THE "US"), AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL (EACH A "RESTRICTED JURISDICTION").

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 .

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 Andrew Henton, Chairman	Via Share Communications
Dowgate Wealth Limited (Portfolio Manager) Laurence Hulse, Investment Director	Via Share Communications
Share Communications Zoe Powell / Eleanor Mitchell	Tel: [phone] [e-mail]
Cenkos Securities plc (Nominated Adviser and Joint Broker) Ben Jeynes / Camilla Hume / Dan Hodkinson / Hamish Waller Michael Johnson / George Budd (Sales)	Tel: [phone]
Dowgate Capital Limited (Joint Broker) Russell Cooke / Nicholas Chambers	Tel: [phone]

To find out more, please visit: 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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