Tech-focused venture capital firm Forward Partners’ pre-trading gains were eroded by almost 13 per cent upon its listing on London’s AIM market on Monday morning.
Shares in the VC firm slid to 100p at some points on Monday following its AIM debut – in line with its float price, and 12.5 per cent down on the pre-market gains it made to 112.5p.
Forward Partners’ listing on London’s AIM market this morning comes just a week after it announced it had submitted its application, with plans to raise £36.5m.
In a rare move for a venture capital firm, it announced it was going public on London’s alternative investment market and that its listing was oversubscribed.
Blackrock and Draper Espirit are both backing the listing, having committed to £15m and £2m worth of Forward’s shares in the placing.
Based on the 100p share price, Forward Partners was valued at around £134.6m on admission to London’s AIM.
But despite the high expectations and pre-market gains, its share price quickly slid down within hours of its IPO, as renewed doubts about post-pandemic economic recovery weighed on a particularly bad day for markets.
“Timing is everything for an IPO and Forward Partners has launched onto the market when investor confidence in the UK has fallen compared to last month and it appears sentiment is becoming a little more risk adverse,” said Susannah Streeter, a senior investment and markets analyst at Hargreaves Lansdown.
“Although there has been an accelerated shift towards digital platforms over the past 18 months, there is renewed uncertainty about the trajectory of the economic recovery and the effect on asset valuation, particularly in the light of rising inflation, which is why there appears to be more caution towards the stock.’’
Hargreaves Lansdown research also found that investor confidence in the UK fell by 5 per cent in the last month compared to a global average fall of 2 per cent, as the Delta variant of coronavirus continued to spread rapidly.
Commenting on its AIM admission this morning, Forward Partners’ chief executive officer Nic Brisbourne said: “It is a rarity to see retail investors accessing venture capital on equal terms as institutional investors and we are pleased to have delivered on our mission to democratise access to high growth, UK technology startups.
“As a public company, we can now provide long term support to startups who are finding solutions to the challenges that we face, providing a critical engine of growth to turbocharge the UK’s economic recovery.”
Founded in 2013, Forward Partners provides early-stage capital to high growth, early-stage technology businesses.
The group’s portfolio currently consists of 46 equity investments in early-stage, high growth UK companies, and its investing strategy focuses on businesses that use e-commerce, marketplace and applied artificial intelligence technology.
Its investments have posted strong performances in the eight years since it was founded, recording a 25 per cent rate of return.
The VC firm’s shares were valued at 112.5p in pre-market trading before the IPO, and ended at 102p at market close.