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Draper Esprit makes Covid provision of £99m

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Investment: Draper Esprit recently participated in a €65m funding round for French startup Aircall

Investment: Draper Esprit recently participated in a €65m funding round for French startup Aircall

Investment: Draper Esprit recently participated in a €65m funding round for French startup Aircall

Dublin-listed venture capital firm Draper Esprit has a made a provision for a £99m (€111m) adjustment across its portfolio due to the impact of the coronavirus pandemic on the value of businesses.

This modification is on the pre-coronavirus estimates from the company and is equivalent to a 21pc adjustment across 53pc of its portfolio, according to an update from the group.

Before the onset of Covid-19 the company had targeted 20pc portfolio growth. Around one third of the adjustments related to the company's 18 core portfolio assets, which it said reflected "the strong performance and positions of these businesses even when viewed through a more stringent valuation lens."

The long-term potential of the portfolio "remains positive," it said, adding that it expects the value of the portfolio to grow post Covid-19 "particularly in light of the accelerated transition to digital".

"Over the medium term, we believe the recovery from the pandemic will sharply accelerate the trends which Draper Esprit's portfolio businesses focus on," said Martin Davis, CEO of Draper Esprit.

"Draper Esprit's position as one of Europe's most active VCs, and our long and deep understanding of the needs of this community, put us in an excellent position to play a leading role in helping innovative businesses of all sizes emerge stronger from this crisis."

The executive directors in Draper Esprit have deferred 20pc of their salaries for three months and will use these deferred balances when paid to buy shares in the company.

Draper Esprit said none of its staff have been furloughed or made redundant and it has not applied for any of the Government funding schemes.

Ahead of its results for year ended 31 March 2020, the company's gross portfolio value is expected to be at least £695m, up from £594 the prior year.

The net asset value per share is predicted to be 550p or more, up from 524pc at 31 March 2019.

Draper Esprit's has invested £48m (€53.5m) since September 2019, bringing the total for the year to £90m.

The former CEO of Draper Esprit, Simon Cook, will step down from the board in July. However, Mr Cook will remain with the company, with his focus on "generating new deals for the group". His new title will be 'founding partner.'

Irish Independent