Welcome to this latest Baronsmead newsletter. In this issue, we highlight our current fundraising for the Baronsmead VCTs, as well as providing an overview of performance and updates from the portfolio.
Fund managers Ken Wotton and James Hendry share their thoughts on the wider market as well as updating on portfolio activity and deployment in the accompanying video. Associate Director, Cassie Herlihy takes an in-depth look at quoted portfolio company Idox plc, covering why we believe the company is undervalued and the pathway for future growth.
We also spotlight portfolio companies Airfinity - a pioneer in predictive health analytics, and SecureCloud+ - an information and technology communication specialist.
We trust you will find this update informative and engaging. If you have any questions or would like any further information about the VCTs, please feel free to contact our team.
An update on fundraising
Following their launch at the start of January, it’s positive to see the Baronsmead VCTs Offers for Subscription are now over 70% subscribed on the initial Offer and the over-allotment facility for Baronsmead Venture Trust plc is now open.
The Offers remain open for applications and we expect the last few weeks of the tax year should bring increased interest from new shareholders.
The second allotment date in respect of the Offers as set out in the prospectus dated 10 January 2025, will be on Thursday, 3 April 2025. In order to be allotted shares in the second allotment, applications will need to be received and funds cleared by 4.00pm on 2 April 2025.
To find out more or to access the online and downloadable application forms please visit: www.baronsmeadvcts.co.uk/vctoffers.
Funds raised as at 20 March 2025:
Why Baronsmead?
Gresham House is the second largest venture capital firm in the market by AUM with over 30 full-time investment professionals employed by the manager
Largest hybrid VCTs in the market which gives us flexibility across unquoted and quoted markets depending on conditions and valuations
Portfolio contains over 80 direct quoted and unquoted companies and diversification across the portfolio helps to reduce risk
Seeking to deliver long-term, consistent and attractive dividends
Ability to top-slice to generate short-term liquidity in AIM portfolio and equity funds
If you’d like any further information, please contact Rees Whiteley, Sales Manager, r.whiteley@greshamhouse.com
Performance and portfolio overview - for the six month period to 31 December 2024 (H2)
Global uncertainties, particularly the ongoing conflicts in the Middle East and Ukraine, continued to weigh on market sentiment in the second half of 2024. As a result of these ongoing macroeconomic challenges, performance for the period, adjusted for the Interim 2024 dividends, was down 2.3% disappointingly, despite some value uplifts from several investments.
In the quoted portfolio, Cerillion, a leading provider of BSS/OSS-as-a-Service solutions to the telecoms industry, returned 11.7% during the period and remains the portfolio’s largest direct holding. UK small-cap equities more generally, and particularly those on AIM, came under significant pressure following the 2024 Autumn Budget, contributing to broad negative sentiment across the sector. Overall, the quoted portfolio declined by 1.3%* and the Equity Funds saw a marginal increase of 0.2%*.
In the unquoted portfolio, many of our investee companies are still working to establish productmarket fit and sustain growth, and will require further injections of capital to scale and generate value. External funding and exit conditions remain subdued, reflecting broader economic fragility.
As a result, the unquoted portfolio saw a decline in H2 of 5.1%*. Despite this decline, the portfolio increased in value from from £107.4 million in June 2024 to £107.9 million in December 2024, as a result of £6.4 million of investments across two new and six follow-on deals, with no realisations.
Performance on a
Encouragingly, 31% of the portfolio saw value uplifts, driven in part by gains in CitySwift – a public transport performance optimisation platform, Mobility Mojo – a self-assessment toolkit for building corporate accessibility, and Pointr - a global technology leader in indoor mapping, digital wayfinding, geofencing and location analytics. However, a similar number suffered declines in value including RevLifter and IWP, with the remainder of the portfolio being unchanged.
Outlook
Despite these challenges, we remain confident in the long-term resilience of the Baronsmead portfolio.
Our disciplined investment approach and active management strategy continue to position Baronsmead for future growth. While short-term volatility persists, many portfolio companies are well-placed to navigate the current environment and capitalise on emerging opportunities. However, many early-stage unquoted portfolio companies are struggling to achieve product-market fit and growth, and will likely require more capital to scale and generate value.
We remain committed to supporting our businesses and identifying high-quality investments that can deliver sustainable returns over time.
NAV at 31 December 2024
Six months portfolio returns to 31 December 2024 (H2)
Capital at risk. Past performance is not a reliable indicator of future performance.
Case study: Idox plc
Idox plc might not be a name that often captures headlines. However, in today’s volatile world, businesses like Idox – which has steadily built a foundation of reliable, recurring revenue over the more than 20 years since our initial investment –can represent some of the most compelling longterm opportunities.
As investors who adopt a private equity mindset, Idox ticks all the right boxes. Firstly, it is a market leader in a niche but steadily growing industry. Specialising in document management and geospatial software, Idox offers both cloud-based and on-premise solutions, primarily to its sticky customer base of local authorities. While this may not sound glamorous, digitisation is a long-term structural growth theme, and is particularly relevant for local authorities since the new Labour government has made it a top priority.
There is widespread recognition that local authorities operate inefficiently and often rely on outdated legacy systems. A recent study found that only 8% of local authorities are operating at a “best-inclass” level of digital maturity. Furthermore, both central and local government bodies are increasingly pushing towards cloud-based solutions that promise greater efficiency and cost savings. Herein lies the opportunity for Idox to expand its sales within its well-established customer base of local authorities, selling more product modules as well as migrating them to the cloud, while also acquiring new, underserved customers.
Secondly, Idox benefits from strong earnings quality, supported by long-term, stable partnerships with local authorities that are often hesitant to switch providers due to the complexity of their systems and procurement processes. With approximately 60% of its revenue being recurring, Idox enjoys a high degree of stability and earnings visibility - an advantage that is expected to grow as more customers transition to the cloud.
The company also boasts an attractive c.30% EBITDA margin, underpinning healthy cash generation. This financial flexibility allows Idox to maintain a solid balance sheet while retaining the capacity to reinvest in acquisitions and future growth opportunities.
Thirdly, a quality management team is a key pillar of any successful business. We have a high regard for CEO David Meaden, who has led the company since 2018. Under his stewardship, Idox has undergone a significant turnaround, improving its financial profile and positioning itself for growth. Meaden’s disciplined, rational approach has paved the way for both organic expansion and strategic acquisitions, particularly within the geospatial software space – a sector growing at over 10% annually.
We believe Idox is significantly undervalued by the market and see a clear path to unlocking this hidden value. The company’s core Land, Property & Public Protection (LPPP) division, which contributes twothirds of its earnings, could arguably be worth more than Idox’s entire current market capitalisation. By divesting non-core parts of the business, we believe the company could simplify its story and highlight the true value of its leading position in the rapidly growing government digitisation sector.
Having built a dominant position in the local government software market, Idox enjoys a level of financial strength and stability that is rare in today’s market. Idox’s strong recurring revenue base and strategic focus on high-growth areas position it well to capitalise on significant market opportunities and deliver substantial returns over the long term.
Capital at risk. Past performance is not a reliable indicator of future performance. Portfolio investments in smaller companies typically involve a higher degree of risk. Investment selected for illustrative purposes only tand are not investment recommendations.
Idox plc
Idox is a leading developer of specialist software for government and industry, with an established track record serving tightly regulated markets including local authorities, health, engineering, transport and property. Built around the needs of the user and designed in collaboration with experts, their software delivers exceptional functionality and reliability to critical operations and embeds workflows that drive efficiency and best practice.
We first invested in Idox plc in May 2002 at 12p per share, we have since completed several follow-on investments culminating in a total value of £1.6mn with a return of 6.1x. The share price currently sits at 59p.*
* as at 19 March 2025
Cassie Herlihy Associate Director
Cassie joined the Public Equity team in July 2021.
Prior to joining Gresham House, Cassie was part of the Corporate Broking team at Citi, having previously spent two and a half years at Investec.
Cassie graduated from the University of Cambridge in 2015, before completing an MSc at the London School of Economics and Political Science.
Article written by
Portfolio updates and latest news
Unquoted investment highlights
Watch our latest portfolio update video to hear highlights from six of our unquoted early-stage growth companies.
An interview with Netcall plc
In this video, Ken Wotton interviews James Ormondroyd, CEO of Netcall plc, a business Baronsmead has been invested in since 2010, to discuss the market it’s operating in and the outlook for further growth.
Metrion Biosciences listed in The Sunday Times 100 Tech,
Portfolio company Metrion Biosciences was listed in the Sunday Times 100 Tech, as one of Britain’s fastest-growing private technology companies.
Metrion provides preclinical drug discovery services to a growing network of major pharmaceutical companies and smaller drug discovery businesses in leading global markets, including Europe, USA and Asia. The company’s offering leverages more than a decade of specialist ion channel research, built upon pioneering work to develop and use automated patch clamp technology in drug discovery.
Read more here >>
CitySwift to partner with all London bus operators
Portfolio company CitySwift has announced the rollout of it’s mplatform to all bus operators in London.
Founded in 2016, CitySwift works with public sector transport authorities and private bus operators to break down the barriers to accessing and interpreting transport data.
This news follows a year of rapid growth for CitySwift in 2024.
Read more here >>
Shareholder event 2025
The 2025 Baronsmead VCTs shareholder event and Annual General Meetings were held at Saddlers’ Hall on Wednesday 12 March 2025.
A replay of the event will be made available in due course.
Useful documents
Baronsmead Venture Trust
Baronsmead Second Venture Trust
Baronsmead Venture Trust
Baronsmead Second Venture Trust
Company spotlights
Airfinity
Airfinity is a pioneer in predictive health analytics that helps decision makers to understand and pre-empt future health risks.
Specialising in infectious diseases, Airfinity has a comprehensive suite of world-leading market intelligence solutions, turning disconnected data points into realtime predictive indicators. The platform also covers advanced therapies (e.g. gene, cell and RNA therapy) and cardio-metabolic.
Disease-centric solutions combine proprietary surveillance tools and forecast models with expert analysis to produce actionable insights on pipeline developments, standard of care, regulatory trends and demand and supply.
Airfinity is a global company with headquarters in London and Boston, relied upon across the full ecosystem in life sciences, including pharma companies, government agencies, corporates, investors, NGOs, and international organisations.
Our initial £1.4mn investment was completed in 2021.
We topped up our investment by £0.6mn in September 2023.
Our investments have helped to further strengthen the senior leadership and product teams.
Portfolio investments in smaller companies typically involve a higher degree of risk. Investments investment strategy and are not investment recommendations.
SecureCloud+
Founded in 2014, SecureCloud+ specialises in solutions for defence and public sector customers with demanding and innovative Information & Communication Technology (ITC) requirements. It can deliver solutions to solve complex issues facing government agencies and specialises in information collaboration systems that allow customers to store and share high-level security information across multiple locations.
Baronsmead first invested into SecureCloud+ in September 2018 to enable the business to continue to invest in its product offering. Since then, the business has grown successfully, with revenues increasing by c.£4mn to £22mn in the last audited financial year. The VCTs’ investment has helped support the creation of c.50 high skilled new jobs over this time period.
In addition, Gresham House has also supported in the recent evolution of the founding management team.
We believe that SecureCloud+ remains well placed to continue delivering critical services to key providers of UK National Security.
Investments selected for illustrative purposes only to demonstrate
Contact details
Chris Elliott
Managing Director, Wholesale
M: +44 (0) 78279 20066
E: c.elliott@greshamhouse.com
Andy Gibb
Sales Director
M: +44 (0) 78490 88033
E: a.gibb@greshamhouse.com
Rees Whiteley
Sales Manager
M: +44 (0) 75975 79438
E: r.whiteley@greshamhouse.com
Source for all information is Gresham House unless otherwise stated.
Risks to be aware of
The value of the Companies and the income from them is not guaranteed and may fall as well as rise
As your capital is at risk you may get back less than you originally invested
Past performance is not a reliable indicator of future performance
Any tax reliefs are dependent on your individual circumstances and may be subject to change
Funds investing in smaller, younger companies may carry a higher degree of risk than funds investing in larger, more established companies. Investments in smaller companies may be less liquid than investments in larger companies
Important information
This document is a financial promotion issued by Gresham House Asset Management Limited (Gresham House) as Investment Manager for Gresham House Ltd under Section 21 of the Financial Services and Markets Act 2000. Gresham House is authorised and regulated by the Financial Conduct Authority with reference number 682776 and has its registered office at 5 New Street Square, London EC4A 3TW. The information in this document should not be construed as an invitation, offer, solicitation of any offer, or recommendation to buy or sell investments, shares or securities or an invitation to apply for securities in any jurisdiction where such an offer or invitation is unlawful, or in which the person making such an offer is not qualified to do so. Whilst the information in this document has been published in good faith, Gresham House provides no guarantees, representations, warranties or other assurances (express or implied) regarding the accuracy or completeness of this information. Gresham House and its affiliates assume no liability or responsibility and owe no duty of care for any consequences of any person acting in reliance on the information contained in this document or for any decision based on it. Past performance is not a reliable indicator of how the investment will perform in the future. Your capital is at risk. Prospective investors should seek their own independent financial, tax, legal and other advice before making a decision to invest. This document has not been submitted to or approved by the securities regulatory authority of any state or jurisdiction. This document is intended for distribution in the United Kingdom only. Any dissemination or unauthorised use of this document by any person or entity is strictly prohibited. Please contact a member of the Gresham House team if you wish to discuss your investment or provide feedback on this document. Gresham House is committed to meeting the needs and expectations of all stakeholders and welcomes any suggestions to improve its service delivery.
