- Two successful portfolio exits deliver bumper returns
- Increased equity stake in existing royalty partner
Funding provider Duke Capital (DUKE:29.75p) has announced the successful exit from two of its royalty partners, and increased its equity stake in an existing portfolio company, too.
The Aim-traded company provides capital to longstanding, profitable, owner-operated businesses in exchange for rights to a small percentage of their future revenues. Duke also holds minority equity stakes in two-thirds of its royalty partners, which enables it to benefit from capital upside, augmenting the healthy returns from its high-yielding royalty investments. Taking equity returns means that the business mix is moving more towards that of private equity, one reason for the recent change in the company's name from Duke Royalty to highlight the hybrid business model. However, a key differentiator is that Duke does not look to take outright control from day one. Also, existing management teams remain in place and are incentivised to drive organic growth.