Forward Partners shares tumbled 21% to 47p in late afternoon trading on Monday after the company announced that its previously estimated commercial progress across its venture portfolio reported in its February update had taken a downward slide in the last quarter.
The technology capital firm cited the turmoil in the public markets, with the ratings of fast-growth listed technology stocks being hit particularly hard amidst ongoing geopolitical volatility.
Forward Partners added that it had seen continued downward pressure on valuations and funding rounds which were taking longer to close as investor confidence weakened.
It noted that the delay in funding rounds would result in key portfolio companies moving from being valued with reference to the price of the last round of investment to being valued on a revenue multiples basis, with the multiple calculated from the enterprise values of listed peers, which are trading at far lower values year-on-year.
Forward Partners commented it expected continued downwards pressure on the valuations at which it holds its investments over FY 2022.
The group said that it expected a mid-to-high 20s percent decline in its ventures portfolio for HY1, down on previous market guidance of approximately £117 million for 31 December 2021.
The company reported significant cash reserves of £31 million at the close of FY 2021, which is being managed conservatively with the firm’s existing cost base.
Forward Partners commented that it remained confident in the longer term growth aspects of its portfolio, with good momentum in HY1 2022 including strong performances from portfolio companies Spike, Silico and Gravity Sketch.