David Toms
speaker
276 appearances
2 recordings
1 series
first heard Apr 2022
last heard Oct 2022
David Toms’s voice in public audio — every appearance, attributed to the second.
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I suppose the the cycle we've been through.
The the last six months essentially unwound a lot of the euphoria that we saw during mid twenty twenty through to twenty twenty one.
And i i you know, essentially we're back to twenty nineteen in public markets terms.
don't see a fundamental change in the way people are thinking about software investing or the end market.
I think
The two things that have changed since the end of last year are the interest rate environment, so effectively the cost of capital, and then the other thing that's changed is the expectation of a recession, which I think is now pretty much a nailed uncertainty.
So there's a little bit more concern around trading and a slightly higher cost of capital, and it doesn't take much of a change in small elements for you to get potentially large
commit new capital.
I think we have to remember that public markets are no longer quite the arbiter they once were.
But I was looking at some stats only a couple of days ago which showed that in fact over the last decade
Private equity has deployed more new capital each year than public markets.
Although everyone thinks public markets are very, very large, mostly you're just trading IOUs between each other, as in share certificates, the actual amount of new capital public markets deliver isn't that large.
Whereas private equity is much more about investing new capital and then selling on the businesses.
So I think it definitely reflects a bit of a change in sentiment.
But more than anything, what goes on in the public markets is driven by capital flow rather than by an active decision by an investor.
If you have no new capital coming in.
your fund or worse you've got redemptions for your fund, then you are a forced seller and it's very hard to buy something new.
Yes, I
certainly in in UK terms, if you just looked in pure UK terms, our portfolio is worth more than the entire listed software sector in the UK.
Uh and in fact I think if you took out the largest three or four European listed software companies, our portfolio is worth more than the entire remainder.
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