Frankfurt-based nanotechnology investor Nanostart (OTCQX:NASRY) received a vote of confidence today from equity research firm Close Brothers Seydler, who re-iterated the venture capital house's buy rating, with an increased price target of EUR32.00 per share.
The rating, according to Close Brothers, was based on recent positive news, including the launch of a new EUR50 million nanotechnology fund in Russia, called Kama Fund First, which gives Nanostart a new source of income as well as entry into a new market.
The fund was jointly launched with Russian state-owned entity, Rusnano, along with the Governer of the administrative district Perm, and will look to provide financing for young nanotech companies in Perm, part of Russia's initiative to become a high-tech nation.
The fund, in which Nanostart will invest up to 25%, marks Nanostart's entry into Russia, where portfolio company valuations are generally lower than in developed nations.
Nanostart will also receive an annual 3% management fee from the new vehicle, equating to roughly EUR1.5 million, with a performance fee of up to 25%, to be calculated at the exit of each individual holding.
In addition to the Russian fund, one of Nanostart's main portfolio companies, ItN Nanovation, recently launched an EUR 11 million capital increase, with proceeds to be used for driving international expansion. Rusnano took part in the capital increase, and as such, acquired a 20% stake in ItN, which makes water filtration systems based on nanotechnology.
Rusnano said that it intends to build its holding in ItN to between 25% and just under 30%.
"Acting as a financial investor, Rusnano not only provides funds for ItN, but also support, including stimulation of demand for ItN’s products - especially in the coating area - thereby furthering development of ItN’s business and increasing the company’s value," Close Brothers noted.
Nanostart's recent positive news flow is indeed an indication of developments to come. In February, the investor took an 18% stake in Membrane Instruments and Technology, a cleantech company based in Singapore, through its Singapore early stage venture fund.
The management fee for the Kama Fund, as well as the portfolio valuation changes of ItN and Membrane Instruments, has led Close Brothers to bump up its price target for Nanostart from EUR30.80 per share to EUR32.00 per share.
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