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52. Bull, Bear & Beyond – Molten Ventures: executive interviews: Allocation of capital image

52. Bull, Bear & Beyond – Molten Ventures: executive interviews: Allocation of capital

S1 E52 · Bull, Bear & Beyond by Edison Group
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6 Plays10 months ago

In this section, Wilkinson discusses how capital will be re-reinvested, with a balance struck between direct investments to capitalise on the current AI-driven technology shift and drive future vintages, secondary investments to take advantage of market pricing opportunities and the need to support their share price through buybacks.

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About ‘Bull, Bear & Beyond’

Bull, Bear & Beyond': features candid conversations with senior executives and from our own team of experts from across industries, exploring strategy, innovation, and the opportunities shaping their markets and 60-second pieces are a compressed summary of content designed to convey our message in a single, easily shareable hit.

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Original interview published on 10/02/2025 and reposted as a podcast

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Transcript

Reinvesting in New Opportunities

00:00:06
Speaker
um I understand that part of your proceeds will be reinvested into new opportunities with secondaries being, you know, a particular focus. Really, to i guess, position yourself for the next BC cycle. Can you um tell us more about that?

Market Tension and Business Value

00:00:23
Speaker
Yeah, I see the the market really has sort of a tension that exists at the moment as we see the public markets have been struggling for liquidity and and share prices have therefore been trading below asset values.
00:00:37
Speaker
There's a tension naturally therefore to support the share price, that's what we're here for, to provide returns to our shareholders. um but also to build fundamental value into into into the business.

Access Through Molten Ventures

00:00:49
Speaker
And we're in the unique position where we're supporting ah innovation and productivity that public market shareholders can't really get access to unless they they own shares through Molten Ventures.

Investing in New Technologies

00:01:00
Speaker
And our ability, therefore, to drive future vintages and Venture capital is a long-term asset class and so investing into new technologies and being consistent about that creation of of of new investments and and supporting those those technology shifts as they come, that creates the value that we'll be accruing in you know three, four plus years' time.
00:01:24
Speaker
And so we're very keen on making sure that we we stay in the market, we stay active, particularly now where I think we're in ah the midst of a generational technology shift.

Secondaries and Pricing Arbitrage

00:01:32
Speaker
This is a very unique opportunity, even if you look over a 50 to 100 year timescale. I think we're in the midst of ah a value creation shift that I don't want our shareholders to miss out on. And so to make sure we we continue to invest is important.

Impact of Investments on Shareholders

00:01:47
Speaker
But as you described there, secondaries in a market where there's a pricing arbitrage is a great way to to create value. And we have a strong track record of investing in in assets um and also funds where there are clear leading companies in those portfolios. I'm thinking around the transactions we've done with CCAMP and with Early Bird and then in the last year with Connect Ventures as well. And that's given as an exposure to TransferWise, to UiPath, to most recently Typeform and Soldo and also to Revolut. And that just adds additional value to to our shareholders.
00:02:28
Speaker
And the beauty of secondaries is that you can price known assets and known

Unique Investment Strategy of Molten Ventures

00:02:33
Speaker
winners. And because of the liquidity arbitrage, you could often price them at a discount to their to their true value.
00:02:40
Speaker
um And then you get the benefit of, because they're more mature, being able to recycle those those companies into into cash in a shorter time frame than you would do with just pure primary investing.
00:02:52
Speaker
And so I think with Molten you have that unique capability of having that blend of primary and secondary investing opportunity to create value and that is distinct. and If you look at our capital allocation policy we point to those those those opportunities but we also point to the need to support the share price and so we put we're saying 10% of our realizations will go into into buybacks and we put that program in place in the summer and as we get more liquidity coming through from subsequent sales we'll we'll we'll continue to follow that policy.