NetScientific takes over management of Martlet Capital's £23m deep tech portfolio, shares gain
() , a deep tech and life sciences venture capital investment group, said its wholly-owned VC and corporate finance firm EMV Capital has been appointed as investment manager to Martlet Capital Limited.
EMV Capital has been tasked with managing Martlet's £23.3m portfolio of deep tech and life sciences early-stage companies, located primarily in the Cambridge tech cluster. In addition, EMV has acquired the operational venture capital business of Martlet, excluding the Martlet portfolio.
NetScientific and EMV participated in the initial fundraising rounds of Martlet Capital in September and December 2021. Through EMV, holds a current direct stake of 1.38% in Martlet with an additional 8.2% in capital under advisory.
The move will increase NetScientific's capital under advisory by 89%, up from the £26.1m reported for the period to June 30, 2023. Additionally, NetScientific will receive recurring investment management fees for a minimum period of 4 years, as well as carried interest over the Martlet portfolio.
Dr Ilian Iliev, CEO of NetScientific and MD of EMV Capital, commenting: "This non-dilutive transaction represents an important milestone for the NetScientific group, aligned with our objectives to become a leading deep tech and life sciences venture capital investor in the UK and Europe. Robert and his team have created a respected brand within the world-class Cambridge high-tech investment cluster. This is a logical next step in the deepening relationship between our organisations following our initial investment in 2021."
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NetScientific has announced a near doubling of its capital under management via wholly-owned EMV Capital, through a fund management mandate and acquisition of the operational business of Martlet Capital. EMV will act as fund manager of the Martlet porfolio for a minimum of 4 years in exchange for annual management fees estimated in "mid-high 6 figures per annum" and carried interest fees based on the increase in value of each company within the portfolio. The existing Martlet business will transfer to a new company within NetScientific - Martlet Capital Management - while the portfolio will remain under the ownership of Martlet Capital.
Through Martlet's portfolio, EMV will gain significant exposure to the Cambridge high-tech cluster, known for generating high-value technology businesses in the deep tech and life sciences space. To further leverage this advantage, EMV and Martlet will launch two new Martlet funds - Martlet Capital Fund II (MC2) and Martlet Growth Fund (MGF). EMV and Martlet have worked closely together since initial investment in 2021, and the former's expertise and management strategy fit very well with Martlet's assets. Therefore, we are optimistic about the portfolio's future performance, including the two new funds.
Overall, the move is highly beneficial to as it adds significant fee revenue and a portfolio 53 early-stage tech companies worth £23.3m to EMV Capital. Management fees should comfortably offset ongoing costs associated with the Martlet business, with additional cost savings arising from aligning operations of the two companies.
shares gained 4.5% on the announcement.
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