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Investing in proven management to create cash generative returns

Our Objectives

The Company’s objectives are to make investments in and acquisitions of private and public companies in a broad range of sectors. Investee companies must be typically well managed, cash generative and our involvement must add to the liquidity of our stock. The Company’s objective is to acquire quality investments that increase the scale and liquidity of the Company on an exponential basis.

The Company is looking to back proven management teams capable of running and growing their own business with the minimum of outside control by the Company

Our Approach

The Directors believe that providing an alternative route to capital for small and mid cap companies represents an exciting investment opportunity given the reluctance and terms set by conventional providers, such as banks, which have become so risk adverse that their terms are unattractive to companies if funding is even available.

The Directors believe that specific and significant opportunities exist to provide alternative funding to small and mid cap businesses through either taking strategic stakes or outright acquisition. Typically, the Company is looking to back outstanding management teams capable of running and growing their own business with the minimum of outside control by the Company.

The Investment Team believe there is extraordinary potential for returns by providing such an alternative to conventional funding sources to companies in a wide range of sectors and markets. The Company's intention is to become the strategic investor of choice for small and mid cap fast growing companies.

Investment Scope & Objectives

The Company intends to target investments in businesses that hold assets which are typically asset rich and capable of being turned quickly into cash generative operations, such as energy extraction businesses, mines, refineries and processing plants. The preference is for brownfield opportunities, although investments in businesses with attractive development opportunities may also be considered. Investments may include, but are not limited to, the acquisition and disposal of ordinary shares, preference shares, debentures, loan stocks, other securities, options and warrants of and in listed and in unlisted companies and/or other vehicles that focus on the same scope as the Company. Surplus resources will be held in cash, cash equivalent and liquid assets pending deployment.

On the advice of the Board, the Company, whether individually or with strategic equity partners, on a case-by-case basis, will utilise its financial ability and expertise and execution skill to participate in investments falling within the Investment Scope with the principal objective of providing Shareholders with a high overall rate of return.

The investment objective of the Company is to provide Shareholders with an attractive total return achieved through both capital appreciation and dividends given its focus on cash generative businesses which should be able to distribute profits to shareholders. The Directors believe that there are likely to be sufficient investment and acquisition opportunities within both private and public businesses in the small and mid cap arena. The Investment Team, through their extensive network of contacts, have identified a number of potentially interesting investment opportunities.

In order to take account of opportunistic investment opportunities which might lie outside the Investment Scope stated above, the Board has reserved the right to approve such investments should it consider the investment to be in the best interests of the Shareholders as a whole. The Board, to the extent that the exercise of such discretion is not already disclosed publicly, shall notify shareholders as appropriate and to the extent that the Board wishes to amend its Investment Scope and Objectives and/or may require the Company’s approval of such investment falling outside the Investment Scope, it shall seek Shareholder approval by means of an ordinary resolution.

Investment Criteria

The Directors intend that the Company's investments will adhere to the following guidelines:

Strong Management

The Directors believe in investing in people. The Company will seek people who are experts in their field and passionate about their company. The Company invests in them.

Cash Generative

Cash is king. The Company will generally only invest in companies which generate, or will quickly generate, cash and which can turn profits into dividends for shareholders.

Creates Liquidity

The investments will be intended to add liquidity to the Company’s issued share capital and create goodwill for both the Company and the target company.

Following the completion of any acquisitions, the Investment Manager will work in conjunction with incumbent management teams to develop and deliver a strategy for performance improvement and/or acquisition-led strategic and operational enhancements. Investors should be aware that it is an express intention of the Directors to utilise its share capital as partial consideration for acquisitions.

Sector focus

The Company is targeted at Small & Medium sized Enterprises (SME’s) and not tied to any particular sector but has already made investments in healthcare and technology. The focus of the Company is always to l seek producing businesses, businesses where production is underutilised and unproductive assets which can be brought into production relatively simply and quickly. Producing assets are expected to be companies where shareholders are seeking an exit, for instance a retirement sale, while non producing assets are expected to be straight purchases.

Geographical Areas

Europe and the UK are the Company’s primary geographic focus. In a post Bretix world whatever the outcome the Company see Europe as having long term growth potential. The jury is out over what a post Brexit UK will look like but given business and the market has already factored in unsettled times it is possible that the UK may experience a relative boom once a clear way forward has been agreed.

Our Projects and Sectors

Details of our projects and sector interests will be published here but areas we are considering include:

Small & Medium sized Enterprises SME's
creating long term return on capital
Consumer technology
and innovation
Healthcare
at the forefront of science
The Internet of Things
opening up the world
Manufacturing
creating products for the future
Focusing on Europe and a post-Brexit UK
searching out cash generative and high growth investments

Investment, Leverage and Borrowing Policies

The Company invests in investments falling within the Investment Scope. The Company endeavours to hold assets, whether directly or indirectly, through one or more special purpose vehicles to ensure the most efficient corporate structure. While the Company has the ability to gear its balance sheet, it is intended that each investment be ring-fenced by the Company and that the funding of each investment will be based on the strength of such investment's balance sheet and/or cash flow potential thereby increasing the insolvency remoteness of each investment.

Given the initial size and capitalisation of the Company, it is not considered effective to place gearing, financial or capitalisation constraints on the Investment Scope. The Directors may consider whether such constraints should be applied in due course in the light of the Company’s performance. There is no set limit on the size of investment or investments that the Company may make. The Directors intend that a proportion of the initial funds raised will be used for the purposes of working capital, to undertake due diligence on potential target acquisitions and potentially fund investments.

Investments outside the Investment Scope

In order to take account of opportunistic investment opportunities which might lie outside the Investment Scope stated above, the Board has reserved the right to approve such investments should it consider the investment to be in the best interests of the Shareholders as a whole . The Board, to the extent that the exercise of such discretion is not already disclosed publicly, shall notify Shareholders as appropriate and to the extent that the Board wishes to amend its Investment Scope and Objectives and/or may require the Company’s approval of such investment falling outside the Investment Scope, it shall seek Shareholder approval by means of an ordinary resolution.

Management and Control of Investments

The Company does not intend to be active in management as an investor but expects to acquire control of one or more target companies, although it will also consider acquiring non-controlling shareholdings. The proposed investments to be made by the Company may be in either quoted or unquoted securities and made by direct acquisition of an interest in companies, partnerships or joint ventures, and direct interests in projects, and can be at any stage of development. Accordingly, the Company's equity interest in a proposed investment may range from a minority position to 100 per cent. ownership and controlling interest.

The Directors intend to acquire one or more investments in quoted or unquoted businesses or companies (in whole or in part) thereby creating a platform for further investments. The Company is likely to need to raise additional funds for these purposes and may use both debt and/or equity including, inter alia, convertible loan notes.

Returns to Shareholders

It is anticipated that returns to Shareholders will be delivered primarily through an appreciation in the price of the Ordinary Shares rather than capital distribution via regular dividends. In addition, there may be opportunities to spin out businesses in the form of demergers to Shareholders or make trade sales of business divisions and therefore contemplate returns via special dividends. Given the nature of the investment policy, the Company does not intend to make additional regular periodic disclosures or calculations of net asset value. The Company will be holding investments for the medium to long term although where opportunities exist for shorter term investments the Company may undertake these. The Company’s accounting policies will follow those recommended by the British Venture Capital Association.

Advisors

Advisors

Reporting Accountants and Auditors

Kingston Smith LLP
Devonshire House
60 Goswell Road
London
EC1M 7AD

Principal Bankers

Metro Bank plc
Unit 3
120 Cheapside,
London
EC2V 7JB

Registrars/CREST Service Provider

Link Market Services Shareholder Services (Formerly Capita)
34 Beckenham Road
Beckenham
Kent
BR3 4TU

Significant Shareholders

None

Corporate Information

All corporate information, details of shares in issue and financial information will be published here as it becomes available. Please note that any decision regarding any proposed subscription or subsequent acquisition of any shares in the Company by any investor should be made solely on the basis of published information and on no other basis. This website expressly excludes any liability to any investor for any investment decision taken by him. (Please see the Disclaimer under Legal tab at bottom of home page).

Name of Company: Whetstone Capital Group plc
Date of Incorporation: 8th August 2017
Place of Incorporation: England
Company Number: 10905791
Directors: Aidan Swanson, New Day Asset Management Limited
Registered Office: 2nd Floor College House, 17 King Edwards Road, Ruislip, London, United Kingdom, HA4 7AE

info@whetstone.capital