92: The state of valuations in the current market and what they mean for investors | John Glencross of Calculus Capital

27 Feb 2024 / Podcast Tax Enhanced

By Dr Brian Moretta

Valuations are always a popular topic. With much discussion about whether we are at the bottom of the current cycle, it seems a good time to revisit and we invited back someone who has experienced several market cycles: John Glencross, Co-Founder of Calculus Capital.

We had a great discussion on the current market, how this compares with recent times and how a fund manager handles the cycles. Topics discussed included:

• How companies are accepting lower valuations;
• The danger of growth at any price;
• Where there are still bubbles and what the consequences of these might be;
• How to manage investing when valuations are high;
• The psychology of down rounds;
• Preferential return structures and what John is seeing in the market;
• Real unicorns versus valuation aberrations;
• How valuation matters for investing;
• How Calculus values existing portfolios;
• John’s sense of valuations in the EIS & VCT market and where he thinks the discrepancies are;
• How close we are to the bottom of the valuation cycle.

Talking with someone who has seen several downturns gave a great perspective on all these topics and there’s lots for all advisers and investors. Enjoy!

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Links

Read Hardman & Co’s investment research on Calculus Capital funds here.

Visit the Calculus Capital website here.

Listen to the previous Calculus Capital episode here.

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John Glencross, Chief Executive, co-founded Calculus Capital with Susan McDonald in 1999, creating one of the UK’s most successful, independent private equity firms focused on investing in entrepreneurial young British companies. John has over 30 years’ experience in private equity, corporate finance, and operational management. During that time, he has invested in, advised on or negotiated more than 100 transactions and served on publicly quoted and private corporate boards. Before co-founding Calculus, John served as a European Corporate Finance Director at UBS and, prior to this, he was Head of Mergers and Acquisitions at Phillips and Drew, a 100-year-old London-based financial institution. At the start of his career, John qualified as a Chartered Accountant with Peat Marwick (subsequently KPMG), where he then went on to be recruited as a founder member of Deloitte’s newly-established consultancy practice in the Gulf Region and then Corporate Finance practice in London. John graduated from Oxford University with an MA (Hons) in Philosophy, Politics and Economics.