Draper Esprit buys stake in Elderstreet Holdings

Venture capital firm Draper Esprit has bought a stake in trust manager Elderstreet Holdings for an undisclosed fee, in order to gain access to high growth technology companies through a range of finance vehicles.

The AIM-listed company bought a 30.77% stake in the holding company of Elderstreet Investments, which has assets in excess of £25m through Elderstreet VCT, and has the option to buy the rest.

The acquisition was paid by the issue of 73,667 shares of 1p each, which will be subject to an 18 month lock-in. The company will have an enlarged share capital of over 40.7m shares and the new shares are expected to trade on AIM and the European Stability Mechanism on 29 November.

Draper Esprit chief executive Simon Cook, who has joined Elderstreet's board, said: “We can now offer to investors access to high growth technology companies through a range of vehicles from Enterprise Investment Scheme funds, to Venture Capital Trusts and an Individual Savings Account qualifying listed evergreen patient capital vehicle with combined assets of over £350m."

He said that the company was now one of the major European managers of technology venture capital and growth capital with a history of acquisitions such as 3i's European VC portfolio, Prelude Investment Trust, Top Technology fund and Cazenove's VC fund.

Michael Jackson, chairman of Elderstreet Investments, added: "For our Venture Capital Trusts shareholders this co-investment agreement brings enhanced deal flow and the ability to invest alongside Draper Esprit funds into larger more established fast growing businesses. Given the recent changes in Venture Capital Trusts rules imposed last year we view the deal as a positive step forward for our Venture Capital Trusts shareholders".

Shares in Draper Esperit were up 1.41% to 360p at 1106 GMT.