Augmentum Fintech (AUGM)

Augmentum Fintech (AUGM) is a venture capital investor which specialises in early-stage fintech businesses. It owns a highly concentrated portfolio of 27 businesses operating across areas from digital banking and digital infrastructure to online platforms and trading areas. The largest holding, small business bank Tide, makes up almost 25% of the portfolio, and the top ten are c. 78% of the NAV by value.

Tim Levene leads the experienced management team, which concentrates on the series A stage for new investments, looking to help companies scale up into profitability from a stage when they have a proven product or service for the first time. He targets an internal rate of return (IRR) of 20% for the portfolio over the long run.

The portfolio has delivered £100m of exits over its life (the current NAV is c. £270m), with a combined IRR of 38%. NAV total returns have dipped in recent years, as we discuss under Performance. In this time, the market has worried about the carrying value of private investments and the prospect for them to be realised, while high interest rates have led to greater risk aversion. AUGM’s shares have traded out to a wide discount, which sits at 43% at the time of writing.

Last year saw some small exits above carrying value, as well as good operational performance from the largest positions in the portfolio. Tim argues the window for IPOs is opening up, highlighting some successful flotations in the US. This might mean the prospect of an exit from AUGM’s largest holdings might be growing.