Ip Group (LSE:IPO) — Capital Markets Event 2025

0:05 Thank you. Thank you, ladies and gentlemen. Good good afternoon. Welcome to the IP GROUP PLC Capital Markets Day. There are no planned fire drills, if there is a fire alarm, please head out through the fire exits where you'll be greeted by members of the team. That concludes a very short intro, so perhaps if I may, Greg, hand over to you, sir. Thank you. Thank you very much, Mark, as always. Get that noise in the room sorted. Welcome to everybody online. Welcome to everybody in the room. Thank you

0:36 very much for braving the British summer, which, of course, is the thing that you have to do for Capital Markets Days in the city of London. I have three bits of good news for you today to to to start proceedings. The first is the sun's back out again. So everyone who arrived and got drenched sort of like we did on the way in, the the sun's back out again. The second is you'll know if you're a follower of IP GROUP or hopefully a shareholder of IP GROUP or an adviser. We do a lot of our engagement with the city as part of our six monthly reporting cycle. And for a business like IP GROUP, the the life cycle of many of our businesses is is an awful lot longer than this. And so the opportunity we have today is to look a bit beyond the six, twelve month reporting cycle and think a bit about what's possible, what's gonna drive value over the longer term, what our competitive advantages are over the longer term.

1:27 So that should be some, you know, something different that you haven't heard for for a while from us. And then the third bit of good news is normally on those events, it's me droning at you for up to an hour and then engaging with questions and all that sort of stuff. The best bit of good news is I'm only doing the first fifteen minutes. And then you get exposure to not just some of the IP GROUP team, which, of course, we're very proud of, but also a number of our portfolio companies, some of the most exciting portfolio companies we have in the portfolio. And we try to pick a selection and there's one that's in the sort of the top five or so and a couple that are right down in the sort of other portfolio towards towards the back end. And also our flag, we've got five of our companies who are exhibiting today but not presenting. I really encourage you to understand more about the business, the types of businesses that we're backing, and crucially, the kind of market opportunities that they've got by engaging with them outside in the break. For those of you online, the plan for today is that this first hour, which is an overview of the opportunity we have, our investment strategy, and our sourcing methodology, that is all recorded live. So we'll be we'll be streaming that.

2:40 We're then gonna cut to a break here in the room, and we'll go and have coffee, a bit of chance to to mingle with the companies, and then we're gonna come back here. There will then be three company presentations. We're not gonna stream those live to everybody, but we're gonna put them in bite sized chunks, and we'll release them over the next sort of week or two. So again, consistent with our plan to try and make everything as transparent to our retail holders as possible, we'll be releasing those videos over the course of the next couple of weeks. So first hour live for the overview of the company and then we'll be releasing the company presentations over the course of the coming couple of weeks. So that's how the agenda will run as described. I I I'm only going to take sort of ten, fifteen minutes because many of you will have heard some of this before when you've listened into our results calls. But I really want to sort of set the context for why we're bothering to do what we do at IP GROUP. And a good pitch should generally have, what are you trying to do?

3:44 Why are you here? What problem are you trying to solve? Why are you solving are you addressing? What's the issue at hand that you're trying to address? And then crucially, why now? Why invest your money now? And when you listen to other presentations, hold those things in your mind. We often look at our companies in that light. What is it? Why now? Why invest your capital now? And the why exists is really, really simple for IP GROUP. The the way we describe it is we evolve the power of science for a better future. But I guess put more simply, the idea is we are a business which finds, identifies, grows, scales, and exits transformative businesses based on science and technology.

4:31 And it's a really it's, you know, it's pretty simple in the telling. It's flipping hard to do in in in practice, but, hopefully, we'll give you a flavor of how we do that and some of the successes and some of the companies that are on that journey over the course of today. And then there's the what's the problem we solve. Well, if you look at the portfolio as a whole, the problem that we solve, some of them are massive. They're problems like the energy transition, the burgeoning cost of health care, the big changes in the technology that we need to be able to deliver the promise of the fourth industrial revolution, but that's all down in the portfolio companies. What do we solve at the IP GROUP level? We solve the lack of capital and the lack of experienced investors to go from a technological concept to a business that you would recognize and hopefully a business that scales to create lots and lots of economic wealth and lots and lots of real world impact. So that's the problem that we solve.

5:26 And then there's the question of why now? What's the trigger point? Well, I hope that what you get from today is this better understanding of the current IP GROUP investment case. And there are sort of three bits you have to believe. The first, there is a really significant value potential in science and technology. And specifically today, I'll talk much more about sort of UK science and technology. We operate in Australia. We have some spinouts in Europe, but predominantly UK. And I'll frame the opportunity around the sort of The UK science and tech opportunity. The second thing you have to believe is that IP GROUP is very well positioned to exploit this. I'll tell that partly in the structure and then I'll leave it to you to judge the team and the companies that you see to articulate and to further exemplify the wise IP GROUP very well positioned to do that. And then the third is this sort of attractive shareholder opportunity.

6:25 We have been coming off the back of a risk off environment for the last three years or so. You've seen it in the share price. We felt it in the share price. It's a very material part of my wealth is in IP GROUP shares as you would hopefully expect as shareholders of the business. And so I feel that pain and we've done an awful lot, we think, to get the story out, capital and buy back shares where they're cheap. We've actually most recently just finished the last tranche of our buyback and we'll be adding another 20,000,000 or so to that buyback program to make sure that we keep going in line with the commitments that we made earlier this year. But the real story, the real growth opportunity is in the portfolio and in the portfolio companies. And hopefully, as capital starts to return, not just to the listed markets but to the private markets, maybe in more volume than we've seen in the past in The UK, then we are incredibly well positioned to capture that both in our existing portfolio but for more investors who want to access this kind of opportunity.

7:28 So why do we operate in this space? And Mark is going talk about this, so I'm really just sort of setting the scene. We operate in deep tech. We're a specialist deep tech investor. Many of us do what we do because we care about making a big dink in the universe or a little dink in the universe, but making some positive difference. But I'm a mathematician. I was trained as an accountant. I'm a numbers guy. I'm very financially minded. We are doing this. Be very, very clear to make financial returns. And one of the key things that you want to do when you're making financial returns is to operate an area that has very big market opportunity. And each of the three sectors in which we the sub sectors in which we operate have very significant market opportunities. The companies that you'll hear talking later will talk about their specific TAMs, and I think you'll be encouraged to see the scale of the TAM that is available to each of those businesses. But the overall numbers are very significant. Mark will talk to these a little bit more so I won't spend too much time on them.

8:30 And then the second thing is so you've got very big market opportunities. The second thing is, as many of you will know, The UK has got some particular strengths in research and innovation, particularly in the university sector. There's the various ways of cutting this. One of the ways that the Feet articulates is there are four of the top 10 universities in the world. There are something like 15 of the top 100 universities in the world here. And so we have got this incredible pedigree. And when you think about the current geopolitical landscape going on, The UK has an enduring commitment over hundreds of years to being seats of learning. And this isn't a partisan thing. It's not saying that the Brits or the English are particularly good at science more than anybody else. We've had a rich tradition of the best scientists in the world coming to ply their trade and study here in The UK. And so whenever we speak to government, we always make it very clear that that policy around immigration supports the ability for that to continue. And we're also increasingly saying, make sure that the talent can also be brought in to help support and commercialize those businesses. And I think recent past, the last sort of six, nine months, some of the talent that we've been bringing into the portfolio, you'll notice a number of them have got US accents. And I think there's a real moment in time for The UK to bring talented, experienced individuals to help scale our businesses here in The UK with that rich experience. And we can offer us in a sort of a stable environment, hopefully a growing and attractive value environment here in The

10:02 UK. So we've got this sort of really interesting science base. And another bit of good news, I suppose, for today and again many of you will know this, but it doesn't hurt to sort of admit that we're good at some stuff. We actually are now leading in Europe at creating companies from this and that's things like the EIS scheme and we'll be talking shortly as an exemplar of our sort of magic source, our sourcing business here in The UK and Parkwalk. But some of those incentives have led to an incredibly rich and vibrant ecosystem in The UK for creating spinouts. We lead in Europe in this and we punch above our weight in sort of relative terms versus The US and other jurisdictions. So the sort of the fundamental innovation and the creation of companies is pretty good.

10:54 We at IP GROUP would make the claim that we are the leading platform to access that innovation. We started this industry really in The UK about twenty, twenty five years ago. And now twenty, twenty five years on, we still remain the largest player and we're about 20% of the whole market if you look at the sort of capital into spinouts here in The UK. The access that we have, and I'll let Anne talk about this, is largely now done through some clever partnerships that we have with a number of the leading universities in The UK through some alumni funds, and we back a number of accelerators. And we've also been founder investors, seed investors into some of the vehicles that now do this at a dedicated university level. So Oxford Sciences Innovation, which is now Oxford Sciences Enterprise, we were a founding investor in. Same thing for Cambridge Innovation Capital. So we've helped to create this ecosystem and probably the most experienced and still the most active in this area. So it's a really leading platform to get access to this space through.

12:01 But the point around having innovation and the point around being able to start companies, you will often hear expressed as there is this sort of funding gap in The UK at the scale up stage. I'm pretty confident I'm not telling you anything new if you've been reading any of the papers, the Feet, The Economist, any of the sort of the popular press as well, there is this sort of this scale up funding gap. And of course, in true British style, we don't present it as an opportunity. We represent it as big challenge. We at IP GROUP think there's a there's a really interesting opportunity here to direct much more capital at the places where it's needed. And to to explain what's going on in this chart here because I think it's it's this the scale of this surprised me actually when we pulled this together. So we did some work with PitchBook. We came up with an analysis that looked at sort of deep tech companies. You can see the definition at the bottom.

12:55 And we looked at the money raised in total by those businesses here in The UK over the course of different funding rounds. And so seed rounds, there was about $8,000,000,000 raised over ten years, and that's okay. So that's that's quite good. Get to series a, of course, the series a rounds are bigger, the companies are surviving, and so the number goes up, almost doubles to 15,000,000,000. Get to Series B and it's interesting. It's still going up, but it's sort of tailing off a little bit. And then you get to Series C and D and E and the total capital has almost fallen off a cliff and the amount of money being raised into Series E is less than the amount of money going into Seed, which seems completely counterintuitive. So what's going on there? We think a combination of factors in the Series A and the Series B because of the lack of scale up leads here in The UK.

13:46 There is an opportunity for non UK based investors to come in and lead the round, then the gravity of the business starts to shift. Or because of the lack of scale up opportunity, the businesses get to this stage and actually an acquisition is the best route for them. So there's real opportunity to make that chart continue to go up, but there needs to be some activity on The UK side, which we're trying to play a part of, which is being well recognized. But I just thought this was quite stark. And the other thing that you can see on the slide is the proportion of domestic capital in those rounds drops off quite significantly from 37% in the seed rounds down to less than a quarter by the time you get to Series C, which is partly explaining that. So there is a real opportunity here. We talk about it as a gap, there really is a big opportunity for The UK to create scaled businesses.

14:39 And the good news is this is now starting to be picked up and it was we've had various iterations of this slide over the last sort of couple of years. And the interesting thing is that the trend actually is starting to be towards both public and private policy starting to coalesce and align And even the government pronouncements and policies starting to align, is, you know, always sort of quite helpful. And so there just in the last couple of weeks, there have been some quite big announcements. One was the industrial strategy. We can I'm sure there are things that we can we can criticize. But from an IP GROUP point of view, they pointed at eight sectors that The UK is gonna be internationally competitive in. And very helpfully, clean energy, digital tech, and life sciences were three of those eight sectors.

15:27 Funding for the British Business Bank, which does about 20% of all venture investment in The UK and who we work closely with at a direct level, was given more funding. And then in the release of the industrial strategy, it was announced that 4,000,000,000 of that would be directly focused at trying to leverage capital into the industrial strategy sectors. Again, so it's quite good news, quite consistent. And then the National Wealth Fund, used to be the National Infrastructure Bank, that is now very clearly aimed at a number of those subsectors and interestingly, including resilience and dual use for the first time. And we've definitely seen a pickup in the interest in direct investments into companies that are strategically relevant, should we say, to The UK with quite a broadly drawn definition.

16:14 And we're hopeful that the the BBB and the National Wealth Fund are gonna play an increasingly directed role in funding companies such as ours to scale up. So that's sort of one element of of sort of government action. The second is the pension schemes bill. This has been sort of gathering some momentum since the Mansion House Compact a couple of years ago. I would definitely say we're having some more practical conversations with potential investors. I mean, we've benefited for a number of years from some of the more forward thinking pension funds investing in us. Sure Railpen here somewhere, but Railpen and one of the few DB schemes that's allocating sort of significant amounts of capital to risk here in The UK and equity here in The UK. We're very proud to have them on the register, but there's a big opportunity for there to be more capital coming into the space and hopefully things like the pension schemes bill, which are aiming to consolidate pension funds, create these super funds.

17:13 And crucially, I think, which is something that led to quite a a sea change in Australia, is this trying to shift the focus away from the fees that are charged to the net return, the value for money. Whether that will flow through in exactly the same way as it has done in Australia over here, we're hopeful that it will do because often when we're speaking to investors trying to get across the fact that you want to get outsized returns even if you have to pay a bit more fee because it's very energy intensive is is the right thing to do for returns overall. I did put on there the backstop thing. I mean, that's that's there's big debates over whether it's a good thing or a bad thing to be mandating pension funds. I heard Rachel Rees talking just last week, she said I don't expect this to be needed at all. But I think it's sort of there as a we would very much like this to be a carrot. But if it's not, I'm reserving the right to sort of have a stick. So I'm I'm not going to get into the debate as to whether that's a good thing or a bad thing, but it's clear that the industry is moving sort of in that direction as exemplified by the Imagine House Accord.

18:12 Top marks to anybody who knows the difference between a compact and an Accord. I don't know what the difference is, but the Accord includes very similar things. But crucially, the idea is that there will be somewhere between an extra sort of $45.10 maybe billion worth of equity capital flowing in directly into UK sort of early stage and venture over the course of the next five, seven years. And again, that is good news for us because we've got a lot of portfolio companies that would benefit and which will generate returns. We manage some assets, which I'll come on to. And hopefully there could also be allocations into IP GROUP PLC direct to given the opportunity. So why did I say we're well placed? Well, again, this won't be new news to you, but to set the next couple of speakers in context, we have this sort of differentiated sourcing engine here in The UK. That's about £500,000,000 worth of capital, and Anne's going to talk about that shortly.

19:09 We have a permanent balance sheet. This is where the vast majority of shareholder value is. If you look at the share price today, it's pretty clear that we don't have any credit for having some scale up funds and some early stage funds in our share price and in fact, there's a reasonable discount to the NAV per share in the middle bit. But Mark is going to talk specifically about some of the companies and the themes that we're following in the middle bit. I haven't got a big piece on this, but Mike, I'm very pleased, but we've got a bit of an Aussie contingent over fortunately this week. Mike will be introducing one of our companies from Australia, HiSarch, and we'll just talk a little bit about some of the funding access that we have in Australia. So we're very well placed to be able to offer things like the work we've been doing for superannuation funds in Australia to manage a few £100,000,000, we're well placed to be able to do the same thing here in The UK.

20:01 So the differentiated UK sourcing, Anne obviously can't put this slide up of lots of awards, but if you measure success on being able to consistently raise capital, being regularly the biggest investor in the space or indeed the number of awards that you win, PartWart really is a sort of a jewel in the crown in terms of UK sourcing and we're very proud to have that as part of the group. I think it's a bit of an underappreciated part of the group and hence the idea to give you a bit more exposure to that today. And the team is really good. We've got a really world class team here at IP GROUP and they span different countries, different stages and different areas of expertise and I've got each of the companies is going to be introduced just briefly by a number of our members of staff so you can get a bit more exposure to the strength and depth that we have within the organization. But I'm not sure there's another organization in The UK that's actually got this amount of experience of investing in deep tech early stage companies.

21:03 I think one of the things that we've learned over the years is you definitely need to have people who are experienced and domain experts because it can be quite tricky and you can be sold a perpetual motion machine if you're not careful. And this is a core part of the value proposition. And we've got a decent track record actually of realizing value. Mean, the NAV goes up and down from year to year. The thing that we measure success on ourselves is what's the cash on cash return that we generate for our investors. We've got a decent track record. We're now up to four companies that we have fully or partially exited at values of more than 1,000,000,000. I can't claim that they're necessarily all unicorns because some of them were quoted and so I'm being good with my definitions. But we were very proud that in the last little while, the last month or so, Hinge Health listed on the New York Stock Exchange, a very successful listing. We were able to take some money off the table as part of that IPO and it's trading very well in the aftermarket and the plan is that we will get liquidity in that company as we come out of our lockup. So that's a bit of further good news.

22:12 But the bit that you're going to get some exposure to today is represents about sort of nine ishp of the NAV per share. As I said, we've got one business that is ordinarily in that sort of top five, ten companies, Hysata, and then Intrinsyc and Genomics are a little bit further down in the NAV per share. But I think you'll leave today with a view that each of these has got really significant value potential to add not just NAV per share, but returns to our shareholders and so hopefully gives you confidence in the sort of the medium term opportunity for IP GROUP. And they will be introduced in the second half. A quick shout out for our companies in the room. We're very appreciative. I mean, it's a tough job to be setting up and running these early stage businesses, so we're very appreciative that we've got teams from five of our companies here today. Please do go and speak to them.

23:11 Some of these are co investments between Parkwalk and the balance sheet. Some of them are Parkwalk investments, some of the balance sheet investments. But each of them has got a really interesting market opportunity. And some of them have got some products that you can play with. I would definitely recommend going and having a go on the audio scenic and spatial audio. That's that's very cool. I I was disappointed that Dom wasn't allowed to bring a banana to cut and produce some smoke. We decided that on a risk basis, getting us all evicted from Gresham Street was probably a bad idea. And so he's got some sort of pseudo smoke that you can look at. But each of them are very interesting businesses. So please do speak to those companies and get an idea of the opportunity. So with that, I want to thank you all for being here. Thank you for being online. Please do take advantage of being able to talk to the team and talk to the companies. I'm going to hand on to Anne, who's going to talk to you a bit about our Parkwalk business.

24:09 Thank you, Greg. Let me get rid of this huge photo and move on to that one. Yes, so my name is Anna Bray. I'm here from Parkwalk, which is the foundation layer of the IP GROUP and we bring in much of the deep and wide deal flow of exciting companies. For myself, I a bit of background. I enjoyed Parkwalk about a year ago, but I spent the previous twenty five years at the University of Cambridge commercializing technology, supporting spinouts. I took the investment of a university's own balance sheet money in spinouts from three companies a year and kind of 400 k in 2010 up to 30 companies and 5,500,000 in 2023. I set up the first sidecar fund in a university for joint EIS fund with Parkwalk in 2012, hence my long association with the wonderful Parkwalk team.

25:03 I was part of a team that got university permission to set up Cambridge Innovation Capital and I also most recently founded founders of the University of Cambridge. And then I thought after all that it was time to have a slight change of direction and join Parkwalk. So that's a bit about me and just shows you how great Parkwalk's relationships are with the university teams and that I like them so much I joined the company. So we are very proud to be the most active investor in university spinouts in The UK. This is data from independently Bohirst and Royal Academy of Engineering. And as you can see, Parkwalk have done three twenty five deals since 2015. And that has contributed to rounds bringing, I think it's 2,000,000,000 into this asset class into those companies.

25:52 But even more excitingly, you look at the investments of the group as a whole, you

25:57 can see we've got four thirty deals in total, which puts us well ahead of our competition in terms of activity in this space. So PLC is different to the balance sheet funds in that we are an enterprise investment scheme based fund. We are investing money on behalf of individual high net worth investors. We have a focused investment strategy that is solely UK university based and we invest across all technologies though in that space. We are tech agnostic from quantum all the way through to life sciences. But where our experience lies is in for fifteen years plus as a company investing in this sector.

26:45 And for our individual investors, this gives them access to deals that are really just totally impossible to get into otherwise, know, unless you're a Cambridge Angel perhaps, but otherwise it's really hard to access this asset class. So on average, our opportunities fund, which is an evergreen fund, has 50,000,000 a year that we are investing and currently that's a 120 live portfolios in our company. We've invested over $490,000,000 to date, I think. Greg mentioned our assets under management and excitingly we've had a 166,000,000 returned to our investors of cash from our exits. So Sifted has also recognized us as being great at this.

27:33 Our reach is all across The UK. We invest from Aberdeen down to Southampton, from Cardiff across to Norwich, And all of these universities have different strengths, which are very exciting to get involved with. We've put a lot of energy into building our relationships with the universities, tech transfer offices, the academics, their accelerators, our co investors because at this very early stage investment, it really is a relationship game. But obviously much of the activity in The UK is based in the Golden Triangle because that's where the ecosystems are and 70% of our deal flow comes from there. Partly that is also because we have pre seed funds in association with the universities of Oxford, Cambridge, Imperial, Bristol and now with Northern Gritstone which act to supply small amounts of investment into these ecosystems at the pre seed stage thereby feeding the funnel even pre Park Walk so that we are already linked to and understanding these companies by the time we see them for investment.

28:48 I'm sorry, I keep going the wrong way. So as I mentioned, you may have seen this week our collaboration with Northern Gritstone. This is taking our links with universities up to that northern arc of Leeds, Liverpool, Manchester and Sheffield. There's a lot of activity happening in that space at the moment to grow regional economies and ecosystems. With our collaborative fund in that space, we'll have early insight into those companies as they grow up. So why is university technology so exciting? Why are we bothering with all of this? Some of this obviously Greg has touched on, but as he said, The UK does have great universities and great research institutions that lead to unique, impactful, economically impactful and hopefully valuable technology spin outs.

29:44 Oxford, Cambridge, Imperial and UCL are in the top 10 universities worldwide. And we've seen in the past how academic research is at the heart of many of the innovations of our life time, whether that's monoclonal antibodies leading all the way through to next generation sequencing or quantum computing all the way through to machine learning and AI. All of these technologies are generated from blue sky research. And often that happens by complete accident. One of the famous stories in Cambridge is that OLEDs, you know the organic LEDs that you have in your TVs nowadays, They were discovered by accident by a postdoc working on plastic electronics when he found his experiment glowing in the dark. And that is a true story.

30:37 The other great thing about university technologies is that they have been significantly derisked by the time they get to us. So most of these inventions have had ten, twenty or thirty years of grant funding through the academic development. They've been peer reviewed. They've had their tires kicked. And when they get to the stage of being a nascent commercial idea, the university tech transfer team will get involved and provide much more support to bring them up a level in terms of commercialization. So they'll be looking at what is the market, how can we access it, what is our IP strategy going to be, how can we file patents, how can we bring in more commercial knowledge to the team and expand that team to make a successful company.

31:25 And often, very importantly, they will have access to proof of concept funds that can develop the technology readiness level up to a higher standard. So when we get involved with our investment, we bring our expertise and knowledge to the table to work on developing that spin out that has been formed. Getting them to concentrate on their go to market, getting them talking to customers, expanding their team with our networks into management and bringing in co investors such as the balance sheet funds to take them through to growth and exit.

32:03 To drill down a bit more into how that pathway works, Parkwalk, as I've just said, will invest at the kind of seed A B round stage and then we will hold investments all the way through, but the size of the round might be getting a bit beyond us. But what that investment stage of our EIS funds does is give the group as a whole great insight to these companies as they grow up. So when they come to the IP GROUP balance sheet fund for investment and we have Quantum Motion in the room outside for you to talk to who are at that stage. You know when they come to the balance sheet, the group as a whole has had many years of close due diligence and involvement with these companies and we have far greater understanding of the technology and the team and their prospects than we would have if something coming in off the street.

32:55 And then obviously as the company develops further, the managed funds can come in and invest at a growth stage through to graduation. And we're constantly having conversations around this. We have monthly investment team meetings. We have you know regular water cooler moments where we talk about the companies that are coming through and how exciting they are. So Edsilico, who are also here in the room, is a great example of a company that's at the early stage in the pipeline. But our balance sheet funds will be keeping an eye on it as it matures and hopefully invest as it gets to the right stage. All this deal flow and our relationships brings in about a thousand opportunities a year or more that we look at on the PLC walk side of things, not just from these funds, but also direct from our relationships with co investments, as I said.

33:50 And we're very picky about which ones we invest in. This is where our experience across many companies in this sector allows us to concentrate on those few companies that we think have the right teams and technology for success. Once we've invested, we will bring in our existing networks and ecosystems to help them develop. We'll link them up with co investors to form syndicates for further funding rounds. And as I've already mentioned, we can use our own and the wider IP group's resources to call in on experienced founders and management because often the commercial team will need building out from its university base. But for our underlying investors, one of the most important things we bring to the party is of course the EIS fund structure, which provides some kind of, I guess, insurance or upside on top of the high risk of investing in this asset class and was really designed by the UK government to make it much more feasible and reduce the risk of investing at this stage.

34:55 And it's now a very embedded and crucial part of The UK tech ecosystem. I think the stats show that over 48% of UK unicorns have had EIS investment at some stage in their journey. So that was a lot of dry, boring facts for you. Now I'm going to talk about the more interesting bit, which is some of our companies. The first one of these, Xcelicom, is totally out of this world, and I mean this literally as it's wireless communications in space. Xcelicom came out of signal processing at the University of Southampton, and what their technology enables is the use of existing space hardened chips. You may not have known that chips have to be space hardened to go up in space. I'm talking silicon, not McCain's obviously.

35:42 But their software allows you to make existing hardware systems into base stations for five gs communication. So what does that mean in real terms? It means that your gaming will be much quicker and smoother, but far more importantly, it means you can get five gs to the most remote places of the world. So whether that's for defense reasons or just for getting five gs out to the most remote places in the world. Our last investment round was in Series B, which was very recent of $15,000,000 and we were joined by Swisscom, Hostplus, and of course the balance sheet. We're looking to great things from Xelicom. Slightly more down to earth, next up we have Cytora.

36:28 Cytora are using generative AI in the insurance space and were founded by four young entrepreneurs from the University of Cambridge. So I first invested in them with a Cambridge hat at the very early stage of their journey and then got Parkwalk involved. Their last investment round was a series b of 25,000,000. But what they're doing is just brilliant because their generative AI system allows you to de risk processes, make them sorry digitize risk processes in the insurance industry. So by digitizing your risk process, you can dissociate the growth of your risk management from your number of people and therefore your profits can grow better than your expenses.

37:16 That's my best way of explaining it. They're doing brilliantly and our co investors in that company are EQT and Cambridge Innovation Capital. Another Cambridge company, not that I'm biased, it's just that I know these companies better than some of the others but Cambridge GaN devices I am biased about because it's great. It is a company that is developing next generation gallium nitride, which is what the GaN bit is, gallium nitride chips to replace silicon. It is a spinout from the Center for Applied Photonics and Engineering from the laboratory of Professor Florian Yadrem. It's his fourth spin out in the power electronics space. He's a bit of an expert. And their gallium nitride power devices basically allow you to be much more efficient in your power handling. So I mean the most obvious example, but not the best market, is your power charger for your laptop that will have a power device in the block.

38:18 Gallium nitride is a much more efficient way of handling that. And where it's really exciting is opening up power management in electric vehicles and in data centers. They're now on Series E. We recently raised 32,000,000 from ourselves, British Growth Fund, British Patient Capital and Foresight. And then last but not least, and as I mentioned earlier here in the room today, can go and see their really cool beating electronic hearts, is AdSilico, which is based on computational modelling from the University of Leeds. What AdSilico's great expertise enables you to do is to make a proper computer model of a human heart. So that can be transformative for the development of medical devices such as mitral heart valves.

39:07 But it goes way beyond that because you can't just create one heart from the human data that you have. You can create multiple virtual twin hearts. But then even better, you can go a stage further and make chimaeras of those virtual hearts. So if you're wanting to test a valve in a 100 hearts with

39:27 anatomy that's very much more representative of the population, this is now possible through an in silico route. They're a very early stage company that we got involved at the Sea Ground alongside Northern Britsdon. So just to finish up, companies are exciting, exits are even more exciting. As I recently, a few minutes ago, said we've returned over £166,000,000 to our underlying investors and that has included some stellar exits such as Cambridge Seamoss Sensors, Florence previous company, Yassa, Refine. There's a number of stars in the portfolio. You'll also see that we do secondary exits for our underlying investors if there's an opportunity in an oversubscribed round with externals coming in. It's great to be able to return some of the money to those individual investors if the return level is correct for them. So the last couple of years have been a bit more tricky, but it's great to see that 2025 seems to be going off at steam and in the first half of this year we've already announced four exits.

40:43 That is all from me, but just to summarize, Parkwalk is The UK's leading investor in university spinouts. We act as a fabulous pipeline to the wider IP group and the balance sheet and manage funds and we also return great returns to our underlying investors. Did you want to do questions? We're not. We won't. Okay. Sorry. Over to Mark then. Good afternoon, everyone. Thank you and very inspiring presentation. I'm strangely drawn to the idea of producing space hardened Doven chips. I wonder if we could find a an opportunity in that that area. I'm Mark Reilly, managing partner of the portfolio across IP GROUP. Hopefully, you're very familiar with what we look for when we're doing new investments at IP GROUP.

41:37 We're looking for technologies that have global scope and world changing impact that can really have a a deep impact on the world and a positive impact on society. We're looking for differentiated technology that by its nature is is defensible and different to what's come before. And usually, these companies have developed these technologies developed by highly skilled technical founding teams. So that's usually a characteristic of our companies and our portfolio. And we do this across these three huge megatrends, these sort of trends, societal megatrends that are creating huge economic opportunity. The first being the transition to renewable energy away from use of fossil fuels, which is a $2,000,000,000,000 market opportunity expected by 2030, growing at about 8% at the moment. We do it in healthcare, aging population implications for societal health.

42:26 Again, a huge more than 2,000,000,000,000 opportunity globally by 2030. And finally, this transition to an ever more digitized world robotics, intelligent computing another huge market opportunity, 4,600,000,000,000 opportunity by 2030. And this is an increasingly popular activity in Europe. The IP GROUP has been doing this for a very long time. We celebrated our twenty year anniversary a few years ago. We've been innovation investors since before that was really a term, since before deep tech was a thing and before spin out investing was an industry. But it's becoming much more of an asset class now. This is a report from McKinsey that McKinsey produced recently about European deep tech, and they said they're witnessing a significant surge in both innovation and interest that's leading to this wave of potential scientific and technological breakthroughs. And they talked about the European share of the investment that's going into innovation investing across the world has increased quite rapidly over this sort of five year period between 2019, when we only had about 10% of the money that was going into innovation across the world, was happening in Europe. That ramped up to 19% by 2023.

43:39 And so McKinsey talked about these compelling reasons to be optimistic about Europe's potential to become a powerhouse in the deep tech arena. And they highlighted this data that they had researched and found that what they're describing as a deep tech innovation investing delivers much better returns than traditional tech investing. This is not me saying this. This is McKinsey's data, but this is what's driving this real interest in this space and developing this whole industry as an asset class in its own right. And they attribute that better returns to all sorts of things of lower competition because you have a more differentiated technology, these founders that have this great technical skill set, opportunities in these huge market areas, global megatrends that we play across, patent protection, and so on.

44:26 But right now, the whole world is being disrupted. Our world is being disrupted. Every industry is being disrupted. My seven year old daughter came into the room when I was preparing this bit of the presentation, and she asked me what I was up to, and I said, Oh, I'm going to tell people about this amazing thing that's changing the world and changing all our lives. And she looked at me very puzzled, she said, You're doing a presentation about Taylor Swift. But it is not Taylor Swift. Of course, I'm talking about artificial intelligence. So this won't be news to anybody in the room, I don't think, but artificial intelligence over the past ten years or so has been catching up very rapidly with human capability. So human capability is the sort of zero benchmark in this graph. And you can see that handwriting recognition and speech recognition has caught up with that human equivalent, with our inability to recognize those things, but also now language recognitions, predictive reasoning even, getting to the point of human comparable in some of these use cases exceeding human capability.

45:27 And to the point that we're now there's not much point in sort of comparing it to your average human's capability, we've now invented something called humanity's last exam, which is every bit as foreboding as it sounds. This is they they wrote to all these experts, all these experts in different fields all around world, asked them to send in their hardest questions about your your own field. And so then they compiled all these into an exam and gave it to the latest artificial intelligence large language models. It did okay. Chat to GPT 4.0, only 3% initially, but they're getting better. The models more recently, up to 0.1, the latest OpenAI model is it? Point one. They've managed to deliver 8.8% on that test, so who knows? This graph elongates to the right where it will get to and how quickly, but it's matching human capability. And all the time, the price of these models, the price of using the models to infer a fact is dropping very rapidly. This is a logarithmic scale on the y axis here, and so the price of these models, just in that three year period, has fallen dramatically.

46:37 So this is completely changing every industry. And if a large language model can write an entire software application in a matter of seconds, what does that mean for the software industry? And what does it mean for all of these other industries that it's disrupting and creating all this ability to be far more efficient and reach every piece of information that's relevant to your task in an instant? And how do you play that as an investor? What does all that mean? What does all this rapid change mean for us as an investor? Well, one way to play it is to invest alongside somebody who's been investing in artificial intelligence for a very long time. And IP GROUP has been implying has been investing in companies that are applying artificial intelligence across all of those megatrend areas that I've been talking about for a long time by way of example in the healthcare domain. So this is an interesting graph. This is how large language models perform helping with diagnosis of medical conditions. So this is, given a set of symptoms, how well does does the diagnoser do in getting the correct condition that the patient's suffering from?

47:39 And so GPs over here are these physicians in the green bar over here on the right. They do okay. So seventy five percent of the time, they're getting it right based on the symptoms. If they're augmented with ChatGPT four in the middle there, they do a little bit better, not all that much different. But if they get out the way altogether and chat GPT-four does the diagnosis, then it does a lot better and the diagnosis is much more accurate. So we're seeing this huge wave now of medical devices that are being approved by the FDA that have AI enablement. This capability is being embedded into our healthcare system today. And that's something that IP GROUP has been investing in for a long time. This is OxyHealth, one of our portfolio companies, Oxford University spin out, that uses cameras to observe human beings, and it can detect from the change in coloration in your skin and small changes in your physiology what your respiratory rate is and what your heart rate is. So this is used to ensure the care of patients, to make sure people are okay in custodial settings or in care settings to monitor to patients. Doing very well now working with the NHS and growing revenue rapidly.

48:47 You might also be aware that we invested in a company called Hinge Health, which uses artificial intelligence to watch you. Put your phone or your iPad in front of you as you're doing your physiotherapy exercises, and it will tell you if you're moving your arm wrong and to change your physiotherapy. And that's been very successful. They sell into huge companies that roll it out across their whole workforce. And you may have read that it's listed on the New York Stock Exchange two or three weeks ago, very successful IPO for us in the portfolio. And of course, later on today, for those staying in the room, it will later be available online, for those of us in the room, we'll hear from one of our portfolio companies, Genomics, which is also using AI in really interesting ways for genomic research. That's healthcare, but we're also very interested in applied AI for applications in the digital domain and AI applications that solve a specific problem and have a specific value proposition given industry verticals. And a good example of that is our former portfolio company, Featurespace, which was a University of Cambridge company that was able to ingest payment information. It would observe the behaviors of users as people who were paying for goods, and was able to work out the patterns of the behavior of those individuals, and therefore spot anomalies when there were unusual behavior in their payment patterns, and detect fraud as a result. So it could

50:18 tell when it was a fraudulent payment and when it wasn't. Huge gain in accuracy in terms of spotting fraud when it was occurring. Also vastly reduced the number of times that fraud was falsely occurring when you get refused to your payment gets refused when you're just trying to pay for your shopping. And so they've sold to a lot of the big sort of banks and payment providers and ended up last year, as hopefully you'll be aware, they sold to Visa, yielding well over 100,000,000 for us as shareholders and a very strong multiple for IP GROUP. And we continue to invest in this area. Please take the opportunity when you go outside for your coffees, those in the room, to meet DiffBlue using reinforcement learning, a different form of artificial intelligence to large language models to produce testing for software code. Very valuable market opportunity there that DiffBlue is at the forefront of another AI spin out from Oxford that it's well worth you spending the time to get to know.

51:16 So all of this application demand, all of these new forms of artificial intelligence application have a huge implication for the compute stack and the communication stack that's supporting them. And that's something that my colleague Lee will talk about a little bit later on in the second session. But it has some We've got other companies here today that are demonstrating another company that you can meet, Quantum Motion, that's very worthwhile getting to know them and their approach to producing qubits, the building blocks of quantum computers. You'll also later on hear a presentation from Intrinsyc that's building resistive RAM semiconductor memory technology that has huge implications for our capability to process very large volumes, very high compute load applications of the type that we're now seeing in regular use.

52:06 And all of that stuff means that we're at the beginning of what Jensen Huang, the CEO of NVIDIA, refers to as the beginning of two industry wide transitions. He talks about accelerated computing and generative AI driving a doubling of the world's data center infrastructure in the next five years. And that has huge implications for our energy consumption. These large language models have pretty material carbon footprints. They use a lot of energy. This is just the training required, the training carbon footprint required to train some of these models, which is equivalent to sort of lifetimes of motor car usage now. And there's a lot of these models coming along. The International Energy Agency predicts that we will use as much as a France and a Germany's worth of extra energy to power all these data centers that are coming along. And so that's why we are one of the many reasons why we're investing in the area of clean energy, with clean technologies that will address the energy transition.

53:07 And you might say we're in this is sort of a clean tech is out of fashion. We're in the era of era of Trump, we're going back to to drilling for oil, and this is not sort of relevant anymore. Well, you may be right, but we've been very wrong about that before. This is the blue lines are all the predictions of what we made at the time of the adoption of clean energy, and the orange line is what actually happened, and what we have done is systematically underestimated the adoption of clean energy technologies vastly. It has grown exponentially in a way that we didn't expect at any of these inflection points in the last sort of ten or fifteen years. And so the reason for this is because the economic case is there. This is no longer just a political motivation.

53:53 Economic case is there for these clean energy technologies, and this is an area that we at IP GROUP have been investing in for a long time. A good example is Ducose, our portfolio company, Ducose, which used artificial intelligence, again, to individually evaluate the characteristics of every cell in a car battery. And each cell, because they have tiny material fluctuations, each cell has slightly different voltage characteristics, current characteristics, resistance characteristics. And Tecosi would dynamically measure those as the battery is in action and adjust the load across the cells in the battery, which could elongate the life by significant amounts. We sold that company three or four years ago. We also were the sort of cornerstone investor in Ceres Power, which turned out to be a great success for the group. We made a many multiples return on our investment in that company, a hydrogen fuel cell company.

54:49 And later on today, you will hear from HySata. Paul, the Chief Executive, is here to talk to you later about HISATA, a very exciting current star of the portfolio, hydrogen electrolyzer. I'm wearing the socks. Paul, take note, other portfolio companies in the audience. Paul gave me socks. And I've got Thursdays covered, but the rest of the week is free. So, look, as a reminder, we are investing in these global, world changing technologies, differentiated technologies with highly skilled teams behind them across these three megatrend areas, and we are very well placed to take advantage of and leverage these huge opportunities that are created by AI, and you will see that in the companies that you meet later on today. Thank you very much all for coming along this afternoon. Excellent.

55:34 Thank you very much, Anne and Mark. I hope that gave you a bit of a flavor. So I sort of touched on the context, the market opportunity here in The UK, the overall market opportunity, and then talked about how we've got differentiated sourcing. I talked a little bit about the capital and the capital journey that's available. And then I hope you were sort of suitably inspired by Mark's view from the coalface of what's possible in terms of technology, but also crucially the exposure that we have in the portfolio to those megatrends and the opportunity you have to go and spend a bit of time and talk with them. So to all of those of you online, thank you very much for taking the last hour to spend some time with us. And we're pretty much spot on time.

56:20 We will break now for a coffee. We'll be circulating, so please come and talk to us and ask any questions that you've got. We'll then reconvene in twenty minutes and we'll have three portfolio company presentations. For those of you online, they will be up over the next couple of weeks for you to review on one and a half times speed at your leisure in in your commute, which is how these things are done. Very good. So thank you all for for your attention, and we'll see you in twenty minutes.