Portfolio Approach
Investment Policy
The investment policy of the Company is to seek exposure to early-stage technology companies, with a focus on software-centric businesses in four chosen target markets:
Immersive Tech
:
AR/ VR
IoT
:
The internet
of things
AI
:
Artificial Intelligence
FinTech
:
Financial technology
Strategy
The Company may invest directly in investee companies or obtain exposure to such companies through investment in collective investment vehicles, including Sure Valley Ventures (the "Funds") and any further funds, which have investment policies that are complementary to that of the Company. Investments may be made using such instruments as the Company in conjunction with Shard Capital AIFM LLP (the "Manager") may determine but are expected to predominantly comprise equities and equity-linked securities (including shares, preference shares, convertible debt instruments, payment-in-kind notes, debentures, warrants and other similar securities) and may include derivative instruments, contractual rights and other similar interests that grant the Company rights equivalent or similar to those conferred by equity and equity-linked securities
The Company may implement its investment policy by investing in class A shares of the Fund and by investing in any further funds and collective investment vehicles managed by third parties. The Company will have discretion as to how to make investments, although it is anticipated that investments in the Funds will represent between 10% and 100% of the Company's portfolio at any given time, and that investments in any further funds and collective investment vehicles managed by third parties may similarly constitute a material proportion of the Company's net asset value subject to the Company's investment restrictions.
Source: Annual Report for the year ended 31st March 2025
1.1 Diversification
The Company will seek to hold a diversified portfolio of investments and, once the assets of the Company, the Funds and any other collective investment vehicles through which the Company invests are each fully invested, expects to have a direct or indirect holding of between 20 and 30 investments. It is intended that the Company would ordinarily acquire a significant interest, consisting generally of between 20% and 50% of an investee company's equity capital. The Company does not envisage taking management control of a portfolio company other than in exceptional circumstances and on a temporary basis, and only if it is considered that such action would be necessary to secure the interests of the Company. The Company has the option to invest directly in quoted companies. Furthermore, a portfolio company may seek a flotation in which case: (i) the Company may continue to hold such investments without restriction; and (ii) the Company may make follow-on investments in such portfolio companies.
1.2 Diversification
The Company's investments will not be constrained by geographical limits. However, it is expected that the Company's portfolio will predominantly be exposed to companies that have their principal operations in the UK, Republic of Ireland or elsewhere in the European Economic Area. In addition, the Company will aim to satisfy the following guideline criteria for its portfolio:
- No more than 15% of the Company's NAV in a single investment and no more than 60% of the Company's NAV invested in a further fund or collective investment vehicle managed by a third party,
- Invest in a further funds or collective investment vehicle managed by a third party only if such further funds or collective investment vehicle has an investment policy that is consistent with the investment policy of the Company,
- No investment in companies whose primary business is acquisition or development of real estate,
- No investments in real estate assets, and
- No more than 15% of the Company's NAV to a counterparty in relation to the utilisation of derivatives (including for investment and hedging purposes).
2. Borrowing
The Company may borrow (through bank or other facilities) a maximum of 20% of net asset value in aggregate (calculated at the time of borrowing) to seek to enhance returns and for the purpose of capital flexibility and efficient portfolio management. The Company's gearing is expected to primarily comprise bank borrowings but may include the use of derivative instruments and such other methods as the board may determine. The board will review the Company's borrowing policy, in conjunction with the Manager, on a regular basis.
3. Hedging
Fluctuations in interest rates are influenced by factors outside the Company's control, and can adversely affect the Company's results and profitability in a number of ways. The Company's investment in the Funds will be denominated in Euro. The Company may use derivatives, including forward foreign exchange contracts and contracts for difference, to seek to hedge against any currency risk between the currency of the Company's investment in the Funds and pound sterling, the base currency of the Company. Shareholders should note that there is no guarantee that such hedging arrangements will be utilised or, if so, will be successful.
4. Cash management
The Company may hold cash on deposit and may invest in cash equivalent investments, including short-term investments in money market type funds, tradeable debt securities and government bonds and securities (''cash and cash equivalents''). There is no restriction on the amount of cash and cash equivalents that the Company may hold and there may be times when it is appropriate for the Company to have a significant cash or cash equivalent position instead of being fully or near fully invested. In order to efficiently allocate all of the Company's available funds, the Company may make short- and medium-term investments in relatively liquid assets that are in accordance with the Company's investment policy (''liquid investments''). Such liquid investments may include shares, bonds and other debt instruments issued by companies as well as shares, units or other interests in collective investment schemes, other investment funds, exchange traded funds and fixed income investments. Prior to the full drawdown of the Company's commitment to the Funds, the cash held by the Company will be utilised in accordance with the Company's stated investment policy and cash management policy. The directors, on advice from the Manager, consider that it is the interests of shareholders for the cash held by the Company in respect of its commitment to the Funds to potentially be available for investment in suitable investment opportunities pending drawdown by the Funds.