Coronavirus – update from Pembroke VCT

Archived article

Archived article: please remember tax and investment rules and circumstances can change over time. This article reflects our views at the time of publication.

From Pembroke Investment Managers 

Andrew Wolfson, managing director of Pembroke VCT, provides an update on how the current situation has impacted the VCT (27 Mar 2020). Below we reproduce his update, with the permission of Pembroke Investment Managers. 

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Pembroke is placing the safety and welfare of its colleagues, investors, and all other stakeholders as its highest priority and is taking all necessary steps to protect individuals, ensure business continuity and provide support to our portfolio companies. 

Pembroke invests in growth-stage premium consumer brands. In recent years, the focus has increasingly shifted to investing in companies that provide digital infrastructure services and that utilise online delivery platforms. These types of business models are potentially less susceptible to disruptions caused by the pandemic compared with the broader economy. Pembroke is taking a proactive approach to the situation and remain confident in the continued long-term performance of the fund.

Portfolio Companies

Following government orders, several of our businesses have had to close to the public, with costs being stripped back to the minimum in the meantime. These include hospitality businesses, Chucs Bar & Grill, Secret Food Tours as well as boutique gyms Boom Cycle and KXU. We are continuing to actively support these companies, working alongside founders to help with cost reduction plans and to access Government support so the businesses will be ready to emerge intact. 

Several companies in our portfolio are thriving. Our online businesses, including Stitch & Story and Popsa, have seen record sales in the past week as people adapt to working and being at home as one. Additionally, Pasta Evangelists, the letterbox food delivery service, saw its largest ever day in trading last week, whilst nut milk and organic juice brand Plenish continues to see demand from supermarkets soar.

Response taken by Pembroke Investment Managers

1. Safety

The welfare of colleagues, investors, portfolio company employees and business partners is Pembroke’s highest priority. Steps have been taken both to protect individuals and to provide support to our portfolio companies and management teams. 

2. Business continuity 

The Pembroke team is well prepared with secure remote access and has continued to communicate and work without interruption. 

3. Response

Risk assessments have been carried out on each of the portfolio companies and the team has confidence in the response plans that management teams are executing. 

Pembroke has strong lines of communications with all portfolio companies and is monitoring all businesses. This is especially important at times like these and, as such, the Pembroke team is in constant dialogue with all portfolio 

Investment Activity

Pembroke has invested c. 50% of the proceeds from our current fundraise into a mixture of new opportunities and current portfolio companies; as such, we have capital available to continue to support and grow the current portfolio. We are actively evaluating new opportunities through holding initial meetings with founders and management teams via video conference and supporting our existing investee companies. 

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