Good comment, @Dejavoo. There are a few reasons that explain why...

Good comment, @Dejavoo. There are a few reasons that explain why PVL trades marginally above NTA and why BTI trades below NTA. I don't agree though that "a lot of expectation is built in already" to PVL's valuation, with an EV of merely c.$3m and a lagging (+ conservative) portfolio valuation.

• Size/Law of Large Numbers: For PVL, given the very low market capitalisation of the company, it is reasonable to expect that the possibility exists to step-change (i.e. double) the valuation fairly quickly, as opposed to a mid-sized VC fund.
• Capital H Activism: The market will consider PVL in the context of the refreshed management team and Capital H's track record of a) picking winners and b) reshaping entities into something inherently more valuable. Capital H's support network (and on-market purchases) will likely allow PVL to trade at a valuation that does ascribe some level of future success (i.e. well above NTA). Whether that is fair or not in relation to BTI is up for debate but that is how the market will treat this.

In my opinion, it is likely that BTI currently trades below NTA because Bailador Technology Investments is a growth capital fund exclusively focused on the information technology sector. Tech is likely to face significant valuation headwinds over the next couple of years with rising interest rates and the sector has recently re-traced, so the market is pricing this accordingly. I'm not saying that BTI is not a good investment — evidently, it has been an excellent one — simply commenting on the discount to NTA.



The majority of BTI's NTA valuation stems from their investment in recently listed ASX tech stock SiteMinder. For BTI, I think the market is pricing in a retracement of SiteMinder's valuation (currently $1.6b on 16x ARR) which is on the expensive side of the valuation spectrum. Following the IPO, SiteMinder co-founder Mike Ford reduced his 11% stake in the company to 4.5 per cent, and Mike Rogers reduced his 2% stake to 0.9 per cent. That's already been confirmed as a wise decision with the valuation falling from $1.88b on the close of day 1 (Nov 8 2021) to $1.63b as of the close today.

All in all, BTI (Balidor) (>$200m market cap) is an excellent example of what Powerhouse could become over the next 5+ years. It is proven, has strong management, and has grown well over the last 7 years. One major successful VC investment (like SiteMinder was to BTI) could massively step change the PVL valuation. Whether PVL achieves a similar trajectory is yet to be seen, but I am backing the new management team to execute and I like the potential of the first 3 investments made.