page 67 of 93 Company data Last price: 8.70 Currency: EUR 52-week high: 9.90 52-week low: 7.86 Webpage: www.questforgrowth.com % chg 1M: -2.25% % chg 1Y: 10.13% Gross div. yield: 0% Market cap: 82,293,930 Isin-code: BE007348 Company description Quest for Growth is a Belgian venture capital firm that invests in growth companies with the objective of converting capital gains into tax-free income through the Privak-structure. It focuses on European technology-based growth companies active in health care, biotechnology, medical, information technology, software, electronics, new materials and special situations in other growth sectors. Shareholder structure Top shareholder(s) # shares % shares value ( ) DEXIA BANK 1,113,822 11.78% 9,690,251 Free float 8,345,251 88.22% 72,6,684 General company data 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 1.15 Gross dividend amount 13.80 1.50 1.50 0.69 0.00 0.00 0.00 0.00 50% 40% 30% 20% 10% 0% Dividend yield 37.0% 0.0% 3.4% 0.0% 0.0% 0.0% 0.0% 7.7% 16.6%16.6% 25,000 20,000 15,000 10,000 5,000 Volumes Average Monthly performance rel. to BEL20-index 6% 4.6% 4% 2.6% 2.7% 1.6% 2% 0.1% 0% 1.9% 1.1%1.0% 1.6% -2% -1.1% -4% -0.5% -2.6% -3.3% -6% -5.4% -8% -10% 0-12% -11.0% 31//20 02//20 //20 08//20 12//20 14//20 16//20 20//20 22//20 26//20 28//20 01//20 01//20 01//20 01//20 01/07/20 01/08/20 01/09/20 01/10/20 01/11/20 01/12/20 01/01/20 01/02/20 01//20 01//20 01//20 1998(a) 1999(a) 2000(a) 2001(a) 2002(a) 20(a) 20(a) 20(a) 20(e) 2007(e) 1998(a) 1999(a) 2000(a) 2001(a) 2002(a) 20(a) 20(a) 20(a) 20(e) 2007(e)
page 68 of 93 News flow 30--20: Follow-on investment in Clear2Pay Quest invested an additional 1m in Clear2Pay to bring its total investment at 3m. The follow-on investment was part of a total round of financing of 15.7m with new investors AGF Private Equity and GIMV acting as co-lead. Other existing investors Intel, Trustcapital Management, Big Bang Ventures and Clear2Pay s management. In ober 20, Quest for Growth entered into the capital of Clear2Pay with a first investment of 2m. Since then, the company enjoyed revenue growth of 50% and foresees even higher growth in 20. Quest for Growth is therefore happy to support the company further in its next stage of growth. We welcome the investment, not only because of the fact that Quest has ample knowledge of the company, but also because we believe fast-growing Clear2Pay to be ready to apply for an IPO next time that it requires fresh capital. Together with Metris, which we believe also very well positioned to make it to the market, Clear2Pay now makes up 3.10% of Quest portfolio value. Overall, the unquoted and quoted/unquoted investments make up 17.5% of the portfolio, while quoted stakes amount to 75.2%. --20: Portfolio update end of il Quest published an update of its portfolio as it was at the end of il. The quoted section saw the complete sell-off of Grenkeleasing and ICT Automatisering, while Quest partially lowered its stakes in Binck, Ericsson, EVS, TomTom, Cyclacel, Schwarz Pharma and DCC. New additions to the portfolio were Tele Atlas, Framfab and Vernalis, while stakes were upped in Icos Vision, GetMobile, GlaxoSmihKline, Omrix, Curanum and Ten Cate. In a move that puts Quest s money where its mouth is, Quest bough 40,000 shares of Omrix immediately after the company went public. Due to the stock split of Option, Quest now owns an unchanged position of 263,424 shares. Little news in the non-quoted section. Quest in il made a co-investment alongside Carlyle European Technology Partners in UC4 Software, a German-based vendor of automation load software. The stake is valued at 377,000. Quest wrote another call option on TomTom. It also wrote a long-term put option on the EuroStoxx50, while at the same time buying a long-term put option with a higher strike price on the index. All in all, Quest s cash position stood at 8.67m, which includes 4m worth of commercial paper of Alcopa and Aquafin. Quest continued the buyback of its own shares and by acquiring 5,000 shares on the market brought the total amount of treasury shares to 42,717. We estimate Quest NAV at 11.74 with a 19.07% discount. The quoted portfolio makes up 72.18% of the total NAV, with unquoted investments totalling 19.%. 24--20: Feedback analyst meeting Quest confirmed that it has become more bearish on markets, which had already become clear after the release of an update of the portfolio at the end of March. Quest in March added 3 series of put options on the EuroStoxx50 to its Options category. The focus of Quest s listed portfolio lies in such investment cases as online gambling, car navigation technology, automatic identification and mobile data transfer. While last week s listing of Omrix was a clear disappointment, Quest remains a believer in the potential of the investment and is hopeful that the true potential will surface later on. The stock closed at $ 10. after its first trading day. The other non-quoted stakes appear to be performing in line with expectations, with cash flows at the level of Kimotion, Plastic Logic and Welcome RT being in check. Quest also made a 0.75m co-investment alongside Carlyle European Technology Partners in UC4 Software, a German-based vendor of automation load software. This investment will appear in the portfolio as from the end of il. It is clear that in a less bullish market, the potential of the unquoted portfolio to produce capital gains will be key to growth in size, despite the statutory obligation to pay out 90% of realized profits. CEO Avonts tuned down the tone of last week s article in De Tijd, saying that he would like to double in size, but without any pressure. Quest may use its treasury shares to pay for any deal in this area. The top-5 investments are Option, EVS, Icos Vision, Omrix and Unit 4 Agresso. 20--20: 10.6m profit in 1Q, Omrix IPO disappoints Quest realised a net profit of 10.6m in 1Q ( 1. per share) compared to a profit of 4.3m ( 0.79 per share) in the same period last year. In the first three months of the short fiscal year that started 1 July 20 and ended on 31 ember, profit came in at 7.2m or 0.77 per share. Quest paid out a gross dividend of 0.69 per share and repurchased 37,717 of its shares. All in all, return on assets amounted to 11.09 % over the quarter. As always, Quest has actively managed its quoted portfolio and as such reaped the benefits of the strong European equity market environment. A number of small and midcaps like Binck, Icos Vision Systems and EVS, with a high weight in the portfolio, showed a positive return of over 40% during the period. Among the unquoted investments, Quest in 1Q pumped another 2m in Metris following an initial investment of 1m in 20. The market flotation of Cyclacel through a reversed merger with Xcyte negatively affected Cyclacel s valuation, although it was partly compensated for by a lucrative direct investment in Xcyte. Thirdly, Omrix announced to seek an introduction on Nasdaq at the end of January. But this morning, the biotech company announced that its IPO was priced at $10.00 per share, far below the earlier announced pricing range of 15 to 17 USD a share. Consequently, we scaled back our estimated listing price of $ 12 to bring the total value for the stake at 3.87m versus a book value of 1.68m. This equals a capital gain of 2.19m or 0.23 per share. --20: Portfolio update end of March Quest published an update of its portfolio as it was at the end of March. The quoted section saw the complete sell-off of Artwork Systems, Telenet and ARC International, the latter being one of its quoted/unquoted shares. Additions were Schwarz Pharma, Exact Holding and Curanum, while positions in Fornix Biosciences, Leoni, Muhlbauer and TomTom were strengthened. On the other hand, Quest sold part of its shares in EVS, Vodafone, GlaxoSmithKline, Prostrakan and DCC. In its non-quoted section, the main event is the listing of Cyclacel via the acquisition of Xcyte, due to which Quest now owns 150,961 shares for a total value of 1.01m, comparable to the combined valuation of the stakes in Xcyte and Cyclacel before the merger. Quest also filled up a committed 0.8m in Trigen Holding to bring the total value of the stake to 2m. We raised the estimated value of Omrix last week, whereas Quest uses the valueat-cost of the stake. Finally, Quest added a small co-investment alongside CETP to its venture funds, while the value of the Schroder Ventures LSF II fund declined to 0.55m from 0.93m, due to a pay out. Quest s cash position stood at 6.85m, which includes
page 69 of 93 Company holdings Description Sector/market Shares Recent Crncy Last price Valuation held change ( ) Commitment Quoted companies Software 9,563,148 EXACT HOLDING Euronext Amsterdam 40,000 23.67 946,800 0.98% GLOBAL GRAPHICS Euronext Brussels 199,964 10.23 2,5,632 2.11% MAMUT Oslo 530,000 NOK 13.50 9,810 0.93% TELE ATLAS Euronext Amsterdam 53,000 3,000 16.25 549,736 0.57% UNIT 4 AGRESSO Euronext Amsterdam 245,714 30,714 15.80 3,882,281 4.01% VIZRT Deutsche Börse 140,648-1,500 8.78 1,234,889 1.28% IT Services 10,899,745 ATOS ORIGIN Euronext Paris 27,500 50.50 1,388,750 1.43% BINCK Euronext Amsterdam 155,8 13.29 2,070,662 2.14% BUSINESS & DECISION Euronext Paris 69,000 16.29 1,124,010 1.16% FRAMFAB Stockholm 9,590,000 7,560,000 SEK 0.93 966,963 1.00% HORIZON TECHNOLOGY Dublin 950,000 0.92 874,000 0.90% SWORD GROUP Euronext Paris 55,000 28.90 1,589,500 1.64% UNIBET SDH Stockholm 136,500 11,500 SEK 195.00 2,885,861 2.98% Technology Hardware 16,994,846 ERICSSON Stockholm 600,000 SEK 23.10 1,502,697 1.55% EVS BROADCAST Euronext Brussels 65,792-25,000 37.59 2,473,121 2.55% LEONI Deutsche Börse 47,000 29.13 1,369,110 1.41% MUHLBAUER Deutsche Börse 27,500 31.50 866,250 0.89% OPTION Euronext Brussels 263,424 18.12 4,773,243 4.93% PHILIPS KON. Euronext Amsterdam 130,000 30,000 23.66 3,075,800 3.18% TKH GROUP Euronext Amsterdam 51,612 1,612 48.62 2,509,375 2.59% VISCOM Euronext Amsterdam 27,000 27,000 15.75 425,250 0.44% Semiconductors 4,512,116 ASM INTERNATIONAL Euronext Amsterdam 99,522 12.10 1,2,216 1.24% ICOS VISION Euronext Brussels 95,000 15,500 34.82 3,307,900 3.42% Telecommunications 9,784,822 D+S EUROPE Deutsche Börse 270,000 70,000 5.36 1,447,200 1.49% GETMOBILE EUROPE Dublin 1,350,000 0.11 148,500 0.15% MOBILCOM Deutsche Börse 75,000 16.57 1,242,750 1.28% MOBISTAR Euronext Brussels 29,954 61.60 1,845,166 1.91% TELENET Euronext Brussels 61,000 61,000 16.77 1,022,970 1.% TELEFONICA Madrid 123,800 12.90 1,597,020 1.65% VODAFONE London 1,495,916 1.15 2,481,216 2.56% Pharma & Biotech 18,612,291 ANITSOMA London 1,344,945 350,000 0.16 315,223 0.33% ARK THERAPEUTICS London 654,625 130,925 0.72 679,8 0.70% BIOALLIANCE PHARMA Euronext Paris 37,500 12.36 463,500 0.48% CYCLACEL PHARMACEUT. Nasdaq 91,261 $ 6.40 459,193 0.47% FORNIX BIOSCIENCES Euronext Amsterdam 86,966 1,7 25.20 2,191,543 2.26% GLAXOSMITHKLINE London 95,000 15.00 2,5,296 2.12% OMRIX Pharma & Biotech 40,000 $ 12.83 4,475 0.42% OMRIX Pharma & Biotech 475,9 $ 12.83 4,800,374 4.96% PHARMING GROUP Euronext Amsterdam 283,550 3.28 930,4 0.96% PLETHORA SOLUTIONS London 751,4 1.98 2,140,431 2.21% PROSTRAKAN London 900,000 0.90 1,168,274 1.21% SCHWARTZ PHARMA Deutsche Börse 15,000 68.83 1,2,450 1.07% SOLVAY Euronext Brussels 17,000 87.30 1,484,100 1.53% VERNALIS London 500,000 0.68 488,584 0.50% Health Care Equipment & Services 5,840,408 CURANUM Deutsche Börse 165,000 7.60 1,254,000 1.29% FUTURA MEDICAL Aim 357,143 0.84 430,119 0.44% FUTURA MEDICAL Aim 650,000 0.84 782,815 0.81% GYRUS GROUP London 160,000 3.47 801,349 0.83% OMEGA PHARMA Euronext Brussels 47,500 54.15 2,572,125 2.66% Funds & Diversified Companies 1,476,000 DCC Dublin 80,000 18.45 1,476,000 1.52% Other 2,624,400 TEN CATE KONINKLIJKE Euronext Amsterdam 116,640 52,640 22.50 2,624,400 2.71% Options 462,000 EUROSTOXX50 put 15sep 3500 Deutsche Börse 3,000 3,000-84.70-254,100-0.26% EUROSTOXX50 put 15sep 3800 Deutsche Börse 3,000 3,000 238.70 716,100 0.74% % of NAV
page 70 of 93 Company holdings Description Sector/market Shares Recent Crncy Last price Valuation held change ( ) Commitment % of NAV Unquoted companies 10,530,084 2,300,000 CLEAR2PAY Software 3,000,000 3.10% IDEA Pharma & Biotech 21,858 47.33 1,4,570 1,300,000 1.07% KIMOTION Software 434,783 1.15 500,000 0.52% METRIS Technology Hardware 57,143 17.50 1,000,0 1.% OXAGEN Ltd. Pharma & Biotech 35,715 0.12 6,027 0.01% PLASTIC LOGIC Technology Hardware 583,333 0.60 5,809 0.52% TRIGEN Pharma & Biotech 32,015 62.47 1,999,999 2.07% WELCOME Software 191,566 2.53 484,662 0.50% WILEX Pharma & Biotech 289,857 6.90 2,000,013 1,000,000 2.07% Convertible loan notes face value 2,000,000 METRIS Technology Hardware 2,000,000 1.00 2,000,000 2.07% Commercial paper face value 1,000,000 AQUAFIN Other sectors 1,000,000-1,500,000 1.00 1,000,000 1.% Venture Funds Invested capital Last 2,542,356 2,433,607 CARLYLE EUR. VENT. PART Funds & Div. Cpies 357,825 31-- 108,271 1,833,607 0.11% CETP CO-INVESTMENT Funds & Div. Cpies 31-- 377,001 0.39% KIWI I VENTURA SERVICOS I Funds & Div. Cpies 168,765 31-Mar- 99,413 0.10% NETFUND EUROPE Funds & Div. Cpies 682,079 31-- 372,578 0.38% SCHRODER VENTURES LSF II Funds & Div. Cpies 1,727,647 $ 31-- 700,354 0.72% VENTECH CAPITAL 2 Funds & Div. Cpies 1,300,000 31-- 884,739 600,000 0.91% Total amount invested: 96,842,217 96.18% Cash: 4,854,554 4.82% Treasury shares: 53,945 8.70 469,322 0.47% Other net assets: -1,474,689-1.46% Total commitments: 4,733,607 4.70% Total net asset value: 100,691,4 100.00% Number of shares: 9,459,073 NAV per share: 10.64 Last share price: 8.70 Discount: 18.27% Holding chart Telecommunication s (9.7%) Health Care Equipment & Services (5.8%) Other (2.6%) Softw are (9.5%) Technology Hardw are (16.9%) Quoted (75.2%) Quoted/unquote d (5.1%) Unquoted (12.4%) Semiconductors (4.5%) Pharma & Biotech (18.5%) Funds & Diversified Companies (1.5%) IT Services (10.8%) Venture Funds Cash & Options (2.5%) & Others (4.8%)
page 71 of 93 Valuation graph 13 12 11 10 9 8 7 6 5 4 3 May Mar Jan 55% 50% 45% 40% 35% 30% 25% 20% 15% 10% NAV (LHS) Stock price (LHS) Hist. discount (RHS) Discount (RHS) *The graph above has been recalculated to better reflect the discount to net asset value. The calculation over the period considered assumes that the 5,416,000 outstanding warrants would have been converted to shares and accordingly corrects the cash position of Quest.