Lanstead Investors Director Nicholas Malins-Smith caught up with DirectorsTalk for an exclusive interview to discuss how the company works and why they’re different to other equity providers
Q1: You’re here today to explain a bit more about Lanstead Investors, can we start with ‘who are Lanstead’?
A1: Lanstead are an institution equity investor with a global reach. We’ve got offices in London, Sydney and New York and we have an experienced management team with a strong track record from fund management, international investing and corporate broking.
Q2: What types of companies do Lanstead typically invest in?
A2: We invest in companies that are already listed in London or Australia. We can invest between £2 million and £20 million per company and we look at all sectors but our most recent investments have been in the healthcare, technology, natural resources and renewable spaces. The crucial thing is that the management team must demonstrate to us how they’re going to use the capital that Lanstead provides to drive growth.
Q3: Are you different from other alternative equity providers?
A3: We’re very different and we’re a world away from financings as a last resort. We know of nobody who’s exactly like us. We take part in standard equity placing on exactly the same terms and Lanstead provides supportive equity capital to help finance that company’s growth.
Q4: So how does a typical Lanstead investment work?
A4: The idea behind what we do is we provide finance that rewards growth. We take part in an equity placing but what distinguishes us is we put alongside a sharing agreement with the company.
Q5: So does the sharing agreement work?
A5: We buy and take delivery of the shares, we then agree a benchmark price set in relation to the placing price and we agree a set time period, typically 18 months, in which we agree to formally share back the majority of any subsequent capital gain. On the assumption that a company’s share price rises then that company will receive additional amounts over and above the placing proceeds. What’s really important here is that the company never has to issue Lanstead anymore shares.
Q6: Can you give us some examples of companies you have invested in?
A6: Yes. We’ve been investing since 2007 and have made over 30 individual investments. Our most recent investments have been in Amur Minerals plc (LON:AMC) and AFC Energy.
Q7: AFC Energy and Amur Minerals have both performed well over the last 6 months, could you give us some details on how you’ve helped these companies?
A7: With Amur Minerals plc, we actually invested five times and very recently the company has received its mining licence in Russia and it has become one of the best performing AIM shares in 2015. With AFC Energy, we invested back in October 2014 and very quickly the company have positive news flow which has seen the share price rise and therefore benefiting under the share agreement agreed with the company.
Q8: Presumably, you’re looking to replicate these types of investments?
A8: Very much so and we’re very keen to back companies that are poised to deliver and we continue to look at a number of opportunities.