Draper Esprit on track

The challenge comes from limited third-party faith in the fair value Draper applies to its own estimates, as shown by the shares’ steep discount to net asset value (NAV). Half-year results – well-telegraphed in an early-November trading update – showed a 12 per cent increase in the gross portfolio fair value, as the venture capital outfit banked £23m in cash realisations and marked up the paper value of its investments by £70m.

The opportunity comes from the fact that private markets are capturing a greater share of high-growth companies’ capital appreciation. With this in mind, the job of running the company has passed to Martin Davis, and should give chief investment officer Simon Cook more time to sift through the “5,000 to 10,000 businesses” Draper evaluates each year. In theory, that gives the group a greater chance to “win the rights to work with” the most attractive picks.

Including deals struck post period-end, investments have so far come to £52m this year. That’s just behind the group’s unstated ambition to deploy £100m a year, although Mr Cook says a “strong pipeline” of deals includes both portfolio companies and new investments.

Analysts at broker Numis expect Draper’s NAV to rise to 608p a share by March 2020, and to 708p in the following year.