Did you know that there are a number of very well known US disruptive technology companies that remain privately owned including companies such as Airbnb, Spotify, Pinterest, Dropbox and Uber?
The frustration for investors is that they are unable to acquire shares in such companies before they float as public companies on a stock exchange such as the NASDAQ in the US. Many investors would simply love to own such share pre-IPO because such shares often experience very large increases in value once they are floated publicly.
So how can such shares be acquired? Well the obvious place to buy them is indirectly through Minerva Money Management! We will be investing a small proportion of our fund into these pre-IPO unlisted shares via a Guernsey based OEIC. Thee way this fund acquires such stocks is by buying them from venture capital companies and employee shareholders who require liquidity on a proportion of their shareholdings. Such shares are usually acquired at a discount of 10-40% precisely because they are privately owned shares and there is no market for trading the shares.
In addition to buying the shares at a discount a further potential gain is often made in terms of a large uplift in value of such shares on the first day of trading and subsequently.
Such potential large gains are only possible because investing in private companies shares is risky due to the lack of liquidity of the shares and the fact that there is no investor protection available under the Financial Services Compensation Scheme or FSCS.
However, investors will be able to buy such shares indirectly by investing in Minerva Money Management which in turn will invest into a Guernsey OEIC. Because the Intelligent Wealth Fund is an OEIC it affords investors protection under the FSCS. We intend to invest up to 10% of our fund into this sector and in all probability nearer to just 5% because of the lack of liquidity in these shares pre-IPO.
Tony Byrne
Managing Director
Minerva Money Management
