2020 News Letter
Review of 2019 and Prospects for 2020
The backdrop to 2019 was the never-ending saga following the 2016 referendum and the vote for the United Kingdom to leave the EU. With the threat of a hard Brexit last autumn and the political paralysis that the Government of the day found itself in, the unprecedented General Election just prior to Christmas has somewhat crystallised the country's itinerary for the future.
THE STOCK MARKETS
London being one of the largest financial centres in the world, the 2019 hiatus caused something of an Investor strike with the Stock Exchange recording the lowest number of IPO’s in 2019 since the financial crises in 2009.
Interest and bond rates remain at unprecedented low levels with mainland Europe saving rates in negative territory and in the UK approaching zero. The main banks in the UK have adopted extremely cautious lending strategies to SMEs and the Capital Markets have also been generally closed to them.
OUR MARKET & CLIENTS
Against this background Ruffena Capital still managed to have a good year on behalf of our Clients and we’ve seen serious levels of interest from Institutional and well capitalised Investors seeking attractive investment opportunities, along with a reasonable flow of good quality Client companies seeking advice and capital.
We also made some significant moves in expanding our investor community and reorganised our internal teams to be more effective in advising clients and preparing them for investment.
Transactions did however seem to take much longer last year, as investors were understandably cautious, and some clients found growth far harder to deliver than expected. Talking to lots of people since we all came back, confidence seemed to have returned, thank goodness, as the political fog clears.
OUR EUROPEAN OFFICE
Last year we successfully opened an office in Amsterdam where we see European Investors looking to find suitable investments in the UK and from the London office UK Clients seeking European Investors. The Amsterdam office is headed up by Maarten van den Belt who has considerable experience in investment and banking – ably supported by Joost Snoep.
We’ve completed our first full year of operations of Ruffena Property Partners (RPP) headed up by Doug West who has secured their first capital financing for the acquisition of a substantial Self Storage company for a Client who is now embarking on an ambitious expansion programme from 6 sites to 60 sites.
RPP has a strong pipeline of very interesting off market opportunities looking to raise capital for both development and investment returns.
Ruffena Capital has also formed a new lending business called Ruffena Venture Finance (RVF) headed up by Richard Turner, who has a long history in the Venture Capital private equity industry – skilled in fund raising, business planning, management and exit strategies. RVF is seeking opportunities to lend between £500k and £2m in fast growing companies typically using a three-year loan with warrants attached.
RVF has cleared FCA authorisation and is now beginning 2020 reviewing a number of interesting opportunities for investors to participate in. Each loan has a target rate of return of 12% to investors.
At Ruffena Capital, in addition to the above it’s business as usual advising our Client companies in development and fund raising with a number of notable successes including, ESG for the very substantial contract they have secured for arenas within the Olympic stadia in Japan, which has nearly trebled turnover.
Other successful engagements in 2019 included Insightful Technology, SGS Gases and property technology company Edozo. The Love Holidays acquisition a year ago also delivered a further tranche of capital for investors, hitting the 30X investment return for some.
Additionally, Appscatter have completed their second major acquisition of a large American partner to create a much larger, stronger business.
NEW OFFICES & NEW INVESTORS
The London office moved to larger premises in the West End last summer and we ran pilot entrepreneur workshops both in London and Amsterdam offices, which will give rise to programmes for 2020.
The last hosted investment event took place in December in Mayfair, London for around 80 investors and family offices in conjunction with a new partner. This unfortunately clashed with the General Election and poor weather, however despite this we had a record number of attendances and considerable interest was shown in all of our clients who presented. Another of our clients, The Lakes Distillery kindly sponsored a draw at the event, which saw six lucky winners take home a bottle of their fine whisky.
Presenting companies at the evening included:
An established advanced materials business with a strong patent field. Following ten years of development, Alvant is a leading technology and materials developer with advanced Aluminium Matrix Composites, which deliver lighter, stronger and less costly alternatives to materials such as titanium, into aerospace; automotive; and other high performance sectors. The company is led by a very strong commercial team who are seeking up to £7.5m over the next twelve months to fund expansion. This investment is EIS qualifying.
An in-revenue medical device company with a suite of patented, approved and profitable products which protect and help heal wounds in at-risk feet, specifically as a complication of diabetes: a large and growing market. . DBC Medical is improving the chances of saving limbs while reducing healthcare costs through its wearable technology. It enjoys significant medical support and advocacy. £1.2m is committed to a raise of £4.2m.
This business enables waste handling site operators to convert on their own site the plastic left after easy things like bottles have been captured from the waste stream. This “liability plastic material” is instead converted into saleable petrochemical feedstock. This liquid can be efficiently transported to the customers who can turn it into plastic again. Funding committed: £4.5m by an industry trade investor
An established SaaS communications platform for customer centric brands, with blue chip clients in the UK and elsewhere. The business provides class-leading customer communications technology around service, support and delivery operations and employs 27 people in Dublin and London. The Company boasts 90% client retention and has an enviable client base from retail giants like John Lewis and Argos, to financial service brands such as Nationwide and PayPal. Investment is now sought to scale the business internationally.
Details of all of these and other opportunities can be found by registered investors on our platform at https://platform.ruffena.co.uk or by personal request.
PROSPECTS FOR 2020
We’ve already seen a clear and optimistic sentiment following the election result which irrespective of one’s personal views – most seem happy that finally we have political consensus, which gives the business community much needed clarity.
It feels that the paralysis which plagued 2019 seems to be finally over and the business community, whether investor or investee, can now move forward.
We have a number of existing and potential new Client’s coming forward in 2020 and look at the forthcoming 12 months with optimism in being able to successfully service our Clients, and through them provide returns for investors in growth companies, property investment and tailored lending scenarios with equity kickers.
London: Portman House, 2 Portman Street, London W1H 6DU
Amsterdam: Spaces, Barbara Strozzilaan 101, 1083 HN, Amsterdam
Tel: +44 203 982 5106
BACKGROUND ON RUFFENA CAPITAL
Founded in 2013, we have evolved to become a boutique corporate finance advisory business with its own investment platform - focused on raising true growth capital or alternative finance, typically in the £1-20m range for our clients. Our investors are largely a private audience of experienced UK and international investors, institutional funds, family offices and private lenders. We and they much prefer established, highly tangible opportunities that can demonstrate the ability to scale or generate secured or exemplary returns, as evidenced by the £50+million that we see going into client opportunities each year.
Operationally, we are based in Mayfair, London and have a branch office in Amsterdam, and matching our investors’ appetites, we tend to work on projects in northern Europe, north America and a few other areas of the world provided we have the audience that either have game—changing technology at the heart of their growth, or are more established businesses undertaking an MBO or financial restructuring.
We have established two sister businesses: Ruffena Property Partners in larger property investment; and Ruffena Venture Finance, providing private lending £500k-£2m into high growth businesses. Ruffena Capital is regulated under the FCA as an appointed representative of Ashberg Ltd, a multifamily office. Ruffena Venture Finance is independently regulated under the FCA.