Investments

Investment strategy

The asset allocation will move towards;

Purchase Blue

70% in listed equities

Private Equity Blue

20% in private equity

Ideas Blue

10% in venture capital

The overarching investment strategy is to;

Percent Blue

Invest in high quality growth businesses

People Blue

Take minority positions, backing talented management teams

Mission Blue

Hold these positions and let them compound for the long term (5 years or more)

Over the course of a cycle, on average we will be 100% invested

Arrow Up Blue

When valuations are very high we can move to being 85% invested (15% in cash)

Arrow Down Blue

When valuations are very low we can move to being 115% invested (15% gearing)

Listed equities

At Middleton Enterprises, we don't try and time the market. We are not macro economists, and do not believe there is much value in trying to predict interest rate rises, levels of inflation or employment rates. Instead, we focus on identifying and investing in great businesses that do not rely on favourable market conditions. These are businesses that will continue to generate consistent profits and cash returns over the long term.

Middleton Enterprises has generated a compound annualised growth rate of 23% over the last 6 years. Over the same period, the broader stock market has returned 6% pa.

Criteria

Technology

MEL’s investment strategy focuses on businesses where growth is underpinned by a technology induced, multi-decade structural driver. This allows for a long-term investment horizon.

Evidence

When evaluating businesses, we have three buckets; Yes, No and Too tough. We will only invest in business models which we can clearly understand and avoid businesses that are not in our area of knowledge.

Advantage

The strategy focuses on buying growth companies at a reasonable price. Firstly, identifying a structural driver. Secondly, screening for high quality fundamentals. Finally, investments are only made when the price falls below fair value. The valuation is calculated using a proprietary model. This is a simple idea but when executed is a key driver of outperformance.

Predict

The strategy only buys into opportunities which report clear, transparent and predictable operational KPI’s. This means we pass on +90% of businesses reviewed. Operational predictability is a key driver behind MEL’s 74%+ buy side success.

Conviction Equities Limited will be making this investment strategy available to external investors for the first time, from early 2020. Investors will have a rare opportunity to co-invest alongside an equity strategy with a consistent track record of growth. If you are interested in learning more or investing in this fund, please contact brett@middletonenterprises.com

Advantage

0% CAGR

Performance to date

Purchase

0%

Purchase success rate

Outperformance

0%

Outperformance of the FTSE All share every year since inception

Portfolio

0

Portfolio companies

Venture capital

Middleton Enterprises invests in fast-growing private B2B SaaS companies across the UK through our syndicate of HNWI’s, Conviction Investment Partners. CIP invests exclusively in post-revenue businesses that are disrupting their domestic markets and show the potential to grow into global enterprises with £100m revenue lines.

Our Venture Capital portfolio has generated a compound annual growth rate of 21% from 2013-2019.

Investment criteria

Calendar Blue

Minimum revenue track record of 12 months

Expand Blue

Plans to expand internationally

Advantage Blue

Scalable and repeatable business models

Outperformance Blue

High annual growth rates

Ideas Blue

Demonstrable ability to become category leaders in local markets

Unicorn Blue

Long term unicorn ambitions

Advantage Blue

0% CAGR

Performance 2013-2019

Startup Blue

0+

Investments

Purchase Blue

0m+

External capital raised

Exit Blue

0

Exits

Venture capital portfolio companies

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Atom Bank

Atom is the UK's first bank built exclusively for smartphones and tablets. The business launched in 2016 and is one of the fastest growing banking start-ups in Europe. MEL invested since inception in 2014 and have followed on with multiple investments since.

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Hullabalook

Hullabalook is a next generation Customer Experience Platform (CXP) for eCommerce that allows personalised and dynamic customer experiences. MEL invested $100k in October 2019

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Adepto

Adepto provides large enterprises with a single view of all the talent available, internal and external; past, present and future.

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Picasso Labs

Picasso Labs is a software that enables multinational brands to analyse their ad content by providing insights into ad performance and compliance with brand guidelines.

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Degreed

Degreed is a Learning Experience Platform that provides employees with learning materials to build and measure their skill sets.

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Zumper

Zumper is a full service lettings portal for tenants and landlords designed exclusively for the US residential market. MEL invested $200,000 in 2018 with a follow on of $600,000 as part of a $75m raise in 2020. The new funding is expected help the business grow to IPO stage in the next few years.

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Heydoc

HeyDoc is a cloud-based clinical system for managing medical data and admin tasks in the private healthcare sector. MEL invested £100,000 in December 2019

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Refract

Refract analyses every call and demo, profiling the revenue defining moments, revealing what leads to successful outcomes for your team today.

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Akkroo

Akkroo is a SaaS enables event lead capture solution built for B2B organisations that regularly exhibit at trade shows and exhibitions.

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Dawn

Dawn are a leading European VC firm with a focus on early stage, B2B SaaS and FinTech. Dawn III fund focuses on early stage opportunities. Dawn Opportunities Fund focuses on later stage investments.

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Oradian

Oradian provides a cloud-based core banking platform for micro finance institutions (MFIs) and other marginalised financial institutions. MEL Invested €300,000 in late 2018. The business has gained traction, surpassing €5m in ARR in late 2019.

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Oneutilitybill.co

Oneutilitybill develops software that enables letting agents to create, quote, and set bill packages for their properties and residential tenants. MEL invested £320,000 in 2016 followed by a £50,000 follow on in 2020. The business is expected to turn profitable by the end of 2020

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Tillo

Tillo is a B2B SaaS platform that helps brands sell digital rewards to a vast range of businesses in one place using a single API.

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iZettle

iZettle, a mobile payments company, offers small businesses portable point-of-sale solutions and free sales overview tools.

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Private equity

Middleton Enterprises invests in and develops a range of businesses. These include regional SME’s and international corporations. Our PE strategy is to add value to portfolio businesses as well as creating jobs and wealth.

Investment criteria

Purchase

Cash generative businesses

Partnership

Close founder relationship

Startup

Start-up focus

Ideas

Value creation through advice, expertise and finance

Calendar

Long term development partners

Evidence

Deep knowledge of the sector

Private equity portfolio companies

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D-Line

D-Line designs and manufactures decorative trunking and other cable management solutions. Products are sold in B&Q, Homebase, Screwfix and various international markets. D-Line was one of MEL’s earliest investments, originally investing in 2006 and buying out other shareholders in 2011 & 2013.

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Apex Bridging

Apex Bridging provides property finance solutions. These are generally short-term loans which are secured against property, land or developments. MEL invested from inception in 2013.

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House Buyer Bureau

House Buyer Bureau trades residential property throughout the UK. The company buys and sells more than 300 houses per annum. MEL invested from inception in 2010.

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