Bailador Technology Investments (ASX: BTI) has reported its private company investments generated an internal rate of return (IRR) of 36.3% over the 2022-23 financial year.
All changes of value were based on independent third-party transactions, Bailador founders David Kirk and Paul Wilson said in their 12 July annual review.
They noted that these returns included an investment in InstantScripts which was realised for cash with the acquisition of the business by Wesfarmers (ASX: WES) during July (APE&VCJ, Jul 2023).
The private company investments contributed an increase of 8%, or 12.6 cents, in net tangible assets (NTA) per share post tax.
Bailador’s two investments in listed companies, Siteminder (ASX: SDR) and Straker Translations (ASX: STG) both declined in value during the year. The company said both companies achieved strong operating performance and it was confident they would generate meaningful positive returns in the current financial year.
Bailador said it held a relatively high cash balance during the 2023 financial year which reduced overall returns. Many new private investment opportunities had been examined but, for most of the year, it generally found valuations were quite high, particularly compared to public sector benchmarks.
Following receipt of cash for its InstantScripts investment, the company has over $100 million available for investment. Now, seeing more reasonable valuations emerge for quality businesses, it regards the present as a great time to have cash available for investment.
On 30 June, Bailador was 51.7% invested in private companies, 23.9% in listed companies with the remaining 24.4% of its assets in cash.
On its 30 June share price, the company’s annualised 4% dividend, based on the June pre-tax NTA, represented a dividend yield of 5.5% and 7.3% when grossed up for franking credits. The company plans to pay a financial year 2023 final dividend of 2% after auditing and release of its full year results.
Image: Bailador founders David Kirk and Paul Wilson.
Disclosure: The writer is an investor in Bailador.