Thank you. Thank you very much, Mark. As always, go get that noise in the room sorted. Welcome to everybody online. Welcome to everybody in the room. Thank you very much for braving the British summer, which of course is the thing that you have to do for capital markets days in the city of London. I have three bits of good news for you today to start proceedings. The first is the sun's back out again. So, everyone who arrived and got drenched sort of like we did on the way in, the sun's back out again. The second is you'll know if you're a follower of IP Group or hopefully a shareholder of IP Group or an adviser, we do a lot of our engagement with the city as part of our six monthly reporting cycle. For a business like IP Group, the life cycle of many of our businesses is an awful lot longer than this. And so the opportunity we have today is to look a bit beyond the six 12 month reporting cycle and think a bit about what's possible, what's going to drive value over the longer term, what our competitive advantages are over the longer term. So that should be something different that you haven't heard for a while from us. And then the third bit of good news is normally on those events it's me droning at you for up to an hour and engagement questions and all that sort of stuff. The best bit of good news is I'm only doing the first 15 minutes. And then you get exposure to not just some of the IP Group team, which of course we're very proud of, but also a number of our portfolio companies, some of the most exciting portfolio companies we have in the portfolio. And we've tried to pick a selection and there's one that's in the sort of the top five or so and a couple that are right down in the sort of other portfolio towards the back end. And also our flag. We've got five of our companies who are exhibiting today but not presenting. I really encourage you to understand more about the business, the types of businesses that we're backing and crucially the kind of market opportunities that they've got by engaging with them outside in the break. For those of you online, the plan for today is that this first hour, which is an overview of the opportunity, we have our investment strategy and our sourcing methodology, that is all recorded live. So, we'll be streaming that. We're then going to cut to a break here in the room and we'll go and have coffee, a bit of chance to mingle with the companies, and then we're going to come back here. There will then be three company presentations. We're not going to stream those live to everybody, but we're going to put them in bite-sized chunks and we'll release them over the next sort of week or two. So, again, consistent with our plan to try and make everything as transparent to our retail holders as possible, we'll be releasing those videos over the course of the next couple of weeks. So, first hour live for the overview of the company and then we'll be releasing the company presentations over the course of the coming couple of weeks. So that's how the agenda will run as described.
I'm only going to take sort of 10 15 minutes because many of you will have heard some of this before when you've listened into our results calls, but I really want to sort of set the context for why we're bothering to do what we do at IP Group. And a good pitch should generally have what are you trying to do? Why are you here? What problem are you trying to solve? What are you addressing? What's the issue at hand that you're trying to address? And then crucially, why now? Why invest your money now? And when you listen to other presentations, hold those things in your mind. And we often look at our companies in that light. Like what is it? Why now? Why invest your capital now? And the why exist is really really simple for IP Group. The way we describe it is we evolve the power of science for a better future. But I guess put more simply the idea is we are a business which finds, identifies, grows, scales, and exits transformative businesses based on science and technology. And it's pretty simple in the telling, but it's flipping hard to do in practice, but hopefully we'll give you a flavor of how we do that and some of the successes and some of the companies that are on that journey over the course of today. And then there's the what's the problem we solve? Well, if you look at the portfolio as a whole, the problem that we solve, some of them are massive. They're problems like the energy transition, the burgeoning cost of health care, the big changes in the technology that we need to be able to deliver the promise of the fourth industrial revolution. But that's all down in the portfolio companies. What do we solve at the IP Group level? We solve the lack of capital and the lack of experienced investors to go from a technological concept to a business that you would recognize and hopefully a business that scales to create lots and lots of economic wealth and lots and lots of real world impact. So that's the problem that we solve. And then there's the question of why now? What's the trigger point? Well, I hope that what you get from today is this better understanding of the current IP Group investment case and there are sort of three bits you have to believe. The first there is a really significant value potential in science and technology and specifically today I'll talk much more about sort of UK science and technology. We operate in Australia, we have some spinouts in Europe, but predominantly UK. And I'll frame the opportunity around the UK science and tech opportunity. The second thing you have to believe is that IP Group is very well positioned to exploit this. I'll tell that partly in the structure and then I'll leave it to you to judge the team and the companies that you see to articulate and to further exemplify the wise IP Group very well positioned to do that. And then the third is this sort of attractive shareholder opportunity. You know, we have been coming off the back of a risk-off environment for the last three years or so. You've seen it in the share price. We felt it in the share price. It's a very material part of my wealth is in IP Group shares as you would hopefully expect as shareholders of the business. And so I feel that pain and we've done an awful lot. We think to get the story out to be efficient with our capital and buy back shares where they're cheap. We've actually most recently just finished the last tranche of our buyback and we'll be adding another 20 million or so to that buyback program to make sure that we keep going in line with the commitments that we made earlier this year. But the real story, the real growth opportunity is in the portfolio and in the portfolio companies and hopefully as capital starts to return not just to the listed markets but to the private markets maybe in more volume than we've seen in the past in the UK then we are incredibly well positioned to capture that both in our existing portfolio but for more investors who want to access this kind of opportunity. So why do we operate in this space? And Mark's going to talk about this. I'm really just sort of setting the scene.
We operate in deep tech. We're a specialist deep tech investor. Many of us do what we do because we care about making a big dink in the universe or a little dink in the universe, but making some positive difference. But I'm a mathematician. I was trained as an accountant. I'm a numbers guy. I'm very financially minded. We are doing this to be very very clear to make financial returns. And one of the key things that you want to do when you're making financial returns is to operate in an area that has very big market opportunity. And each of the three sectors in which we, the subsectors in which we operate, have very significant market opportunities. The companies that you'll hear talking later will talk about their specific TAMs and I think you'll be encouraged to see the scale of the TAM that is available to each of those businesses. But the overall numbers are very significant. Mark will talk to these a little bit more. So I won't spend too much time on them. And then the second thing is so you've got very big market opportunities. The second thing is as many of you will know the UK has got some particular strengths in research and innovation particularly in the university sector. There's the various ways of cutting this. One of the ways that the FT articulates is there are four of the top 10 universities in the world. There are something like 15 of the top hundred universities in the world here. And so we have got this incredible pedigree and when you think about the current geopolitical landscape going on the UK has an enduring commitment over hundreds of years to being seats of learning and this isn't a partisan thing. It's not saying that the Brits or the English are particularly good at science more than anybody else. We've had a rich tradition of the best scientists in the world coming to apply their trade and study here in the UK. And so whenever we speak to government, we always make it very clear that policy around immigration supports the ability for that to continue. And we're also increasingly saying make sure that the talent can also be brought in to help support and commercialize those businesses. And I think the recent past, the last sort of six, nine months, some of the talent that we've been bringing into the portfolio, you'll notice a number of them have got US accents. And I think there's a real moment in time for the UK to bring talented, experienced individuals to help scale our businesses here in the UK with that rich experience and we can offer a stable environment, hopefully a growing and attractive value environment here in the UK. So we've got this sort of really interesting science base and another bit of good news I suppose for today and again many of you will know this but it doesn't hurt to sort of admit that we're good at some stuff. We actually are now leading in Europe at creating companies from this and that's things like the EIS scheme and we'll be talking shortly as an exemplar of our sort of magic source, our sourcing business here in the UK and part walk but that some of those incentives have led to an incredibly rich and vibrant ecosystem in the UK for creating spinouts. We lead in Europe in this and we punch above our weight in sort of relative terms versus the US and other jurisdictions. So the fundamental innovation and the creation of companies is pretty good. We at IP Group would make the claim that we are the leading platform to access that innovation. We started this industry really in the UK about 20, 25 years ago and now 20, 25 years on we still remain the largest player and we're about 20% of the whole market where if you look at the sort of capital into spinouts here in the UK, the access that we have and I'll let an talk about this is largely now done through some clever partnerships that we have with a number of the leading universities in the UK through some alumni funds and we back a number of accelerators. We've also been founder investors, seed investors into some of the vehicles that now do this at a dedicated university level. So Oxford Sciences Innovation which is now Oxford Sciences Enterprise we were a founding investor in same thing for Cambridge Innovation Capital. So we've helped to create this ecosystem and you know probably the most experienced and still the most active in this area. So it's a really leading platform to get access to this space through.
But the point around having innovation and the point around being able to start companies you will often hear expressed as there is this sort of funding gap in the UK at the scaleup stage. I'm pretty confident I'm not telling you anything new. If you've been reading any of the papers, the FT, the Economist, any of the popular press as well, there is this scale up funding gap. And of course, in true British style, we don't present it as an opportunity. We represent it as a big challenge. We at IP Group think there's a really interesting opportunity here to direct much more capital at the places where it's needed and to explain what's going on in this chart here because I think the scale of this surprised me actually when we pulled it together. So, we did some work with Pitchbook. We came up with an analysis that looked at sort of deep tech companies. You can see the definition at the bottom. And we looked at the money raised in total by those businesses here in the UK over the course of different funding rounds. And so seed rounds, there was about $8 billion raised over 10 years. And that's okay. So that's quite good. Get to series A, of course, the series A rounds are bigger. The companies are surviving and so the number goes up almost doubles to 15 billion. Get to series B and it's interesting. It's still going up, but it's sort of tailing off a little bit. And then you get to series C and D and E and the total capital has almost fallen off a cliff and the amount of money being raised into series E is less than the amount of money going into seed which seems completely counterintuitive. So what's going on there? We think a combination of factors in the series A and the series B because of the lack of scale up leads here in the UK. There is an opportunity for non-UK based investors to come in and lead the round and then the gravity of the business starts to shift or because of the lack of scaleup opportunity their businesses get to this stage and actually an acquisition is the best route for them. So there's a real opportunity to make that chart continue to go up, but there needs to be some activity on the UK side, which we're trying to play a part of, which is being well recognized. But I just thought this was quite stark. And the other thing that you can see on the slide is the proportion of domestic capital in those rounds drops off quite significantly from 37% in the seed rounds down to less than a quarter by the time you get to series C, which is partly explaining that. So there is a real opportunity here. We talk about it as a gap, but there really is a big opportunity for the UK to create scaled businesses. And the good news is this is now starting to be picked up and we've had various iterations of this slide over the last couple of years. And the interesting thing is that the trend actually is starting to be towards both public and private policy starting to coalesce and align and even the government pronouncements and policy is starting to align which is always quite helpful. So in just the last couple of weeks there have been some quite big announcements. One was the industrial strategy. We could, you know, I'm sure there are things that we can criticize, but from an IP Group point of view, they pointed at eight sectors that the UK is going to be internationally competitive in. And very helpfully, clean energy, digital tech, and life sciences were three of those eight sectors. Funding for the British Business Bank which does about 20% of all venture investment in the UK and who we work closely with at a direct level was given more funding and then in the release of the industrial strategy it was announced that four billion of that would be directly focused at trying to leverage capital into the industrial strategy sectors again so that's quite good news quite consistent and then the national wealth fund which used to be the national infrastructure bank that is now very clearly aimed at a number of those subsectors. And interestingly including resilience and dual use for the first time. And we've definitely seen a pick up in the interest in direct investments into companies that are strategically relevant, should we say, to the UK with quite a broadly drawn definition. And we're hopeful that the BBB and the National Wealth Fund are going to play an increasingly directed role in funding companies such as ours to scale up. So that's sort of one element of government action. The second is the pension schemes bill. This has been gathering some momentum since the Mansion House compact a couple of years ago. I would definitely say we're having some more practical conversations with potential investors. I mean we've benefited for a number of years from some of the more forward-thinking pension funds investing in us. I'm sure Railpen are here somewhere, but Railpen and one of the few DB schemes that is allocating sort of significant amount of capital to risk here in the UK and equity here in the UK. We're very proud to have them on the register, but there's a big opportunity for there to be more capital coming into the space and hopefully things like the pension schemes bill which are aiming to consolidate pension funds, create these super funds and crucially I think which is something that led to quite a sea change in Australia is this trying to shift the focus away from the fees that are charged to the net return the value for money. Whether that will flow through in exactly the same way as it has done in Australia over here, we're hopeful that it will do because often when we're speaking to investors trying to get across the fact that you want to get outsized returns even if you have to pay a bit more fee because it's very energy intensive is the right thing to do for returns overall. I did put on there the backstop thing. I mean that's there's big debates over whether it's a good thing or a bad thing to be mandating pension funds. I heard Rachel Reeves talking just last week and she said, "I don't expect this to be needed at all." But I think it's sort of there as a we would very much like this to be a carrot, but if it's not, I'm reserving the right to sort of have a stick. So, I'm not going to get into the debate as to whether that's a good thing or a bad thing, but it's clear that the industry is moving in that direction as exemplified by the Mansion House Accord. Top marks to anybody who knows the difference between a compact and an accord. I don't know what the difference is. But the accord includes very similar things but crucially the idea is that there will be somewhere between an extra sort of four, five, 10 maybe billion worth of equity capital flowing in directly into UK sort of early stage and venture over the course of the next five, seven years and again that is good news for us because we've got a lot of portfolio companies that would benefit and which will generate returns we manage some assets which I'll come on to and hopefully there could also be allocations into IP Group PLC directly to the opportunity.
So why did I say we're well placed? Well, again, this won't be new news to you, but to set the next couple of speakers in context, we have this sort of differentiated sourcing engine here in the UK. That's about half a billion pounds worth of capital. And an's going to talk about that shortly. We have a permanent balance sheet. This is where the vast majority of shareholder value is. If you look at the share price today, it's pretty clear that we don't have any credit for having some scale up funds and some early stage funds in our share price. And in fact, there's a reasonable discount to the NAV per share in the middle bit, but Mark's going to talk specifically about some of the companies and the themes that we're following in the middle bit. I haven't got a big piece on this, but Mike, I'm very pleased. But we've got a bit of an Aussie contingent over fortunately this week. Mike will be introducing one of our companies from Australia. Hi Sart will just talk a little bit about some of the funding access that we have in Australia. So we're very well placed to be able to offer things like the work we've been doing for superannuation funds in Australia to manage a few hundred million pounds. We're well placed to be able to do the same thing here in the UK. So the differentiated UK sourcing an obviously can't put this slide up of the lots of awards but if you measure success on being able to consistently raise capital, being regularly the biggest investor in the space, or indeed the number of awards that you win, Parkwalk really is a sort of jewel in the crown in terms of UK sourcing and we're very proud to have that as part of the group. I think it's a bit of an underappreciated part of the group and hence the idea to give you a bit more exposure to that today. And the team is really good. We've got a really world-class team here at IP Group and they span different countries, different stages and different areas of expertise and I've got each of the companies is going to be introduced just briefly by a number of our members of staff so you can get a bit more exposure to the strength and depth that we have within the organization. But I'm not sure there's another organization in the UK that's actually got this amount of experience of investing in deep tech early stage companies. And I think one of the things that we've learned over the years is you definitely need to have people who are experienced and domain experts because it can be quite tricky and you can be sold a perpetual motion machine if you're not careful. So this is a core part of the value proposition. And we've got a decent track record actually of realizing value. I mean the NAV goes up and down from year to year. The thing that we measure success on ourselves is what's the cash on cash return that we generate for our investors. And we've got a decent track record. We're now up to four companies that we have fully or partially exited at values of more than a billion. I can't claim that they're necessarily all unicorns because some of them were quoted and so I'm being good with my definitions. But we were very proud that in the last little while, the last month or so, Hinge Health listed on the New York Stock Exchange, very successful listing and we were able to take some money off the table as part of that IPO and it's trading very well in the aftermarket and the plan is that we will get liquidity in that company as we come out of our lockup. So that's a bit of further good news. But the bit that you're going to get some exposure to today represents about a fifth of the NAV per share. As I said we've got one business that is ordinarily in that sort of top five 10 companies. And then Intrinsic and Genomics are a little bit further down in the NAV per share. But I think you'll leave today with a view that each of these has got really significant value potential to add not just now per share but returns to our shareholders. And so hopefully gives you confidence in the sort of the medium-term opportunity for IP Group. And they will be introduced in the second half. A quick shout out for our companies in the room. We're very appreciative. I mean it's a tough job to be setting up and running these early stage businesses and so we're very appreciative that we've got teams from five of our companies here today. Please do go and speak to them. And some of these are co-investments between Parkwalk and the balance sheet. Some of them are Parkwalk investments, some are balance sheet investments and but each of them has got a really interesting market opportunity. And some of them have got some products that you can play with. I would definitely recommend going and having a go on the Audio Scenic spatial audio. That's very cool. I was disappointed that Dom wasn't allowed to bring a banana to cut and produce some smoke. We decided that on a risk basis getting us all evicted from Gresham Street was probably a bad idea. So he's got some sort of pseudo smoke that you can look at. But each of them are very interesting businesses. So please do speak to those companies and get an idea of the opportunity. So with that I want to thank you all for being here. Thank you for being online. Please do take advantage of being able to talk to the team and talk to the companies and I'm going to hand on to an who's going to talk to you a bit about our Parkwalk business. Thank you.
