LMS Capital, a London-based investor, saw its portfolio of direct investments buoyed by the strong performance of Updata Infrastructure, a provider of broadband services to the public sector, which it has marked up in value to £13 million (€16 million; $20 million) from £8 million last year.
Updata’s EBITDA has more than tripled since its acquisition by LMS in July 2009, and its revenues have doubled during the same time.
“We bought it when it was doing £2 million EBITDA, and it did £6.2 million in the last 12 months,” said LMS chief executive officer Glenn Payne in an interview with PEO.
LMS Capital acquired a 53.3 percent stake in Updata Infrastructure in July 2009 for £6.2 million in a management buyout.
In spite of the gain on Updata, unrealised returns on LMS' direct investments during the first six months of 2010 amounted to a net loss of £1.2 million, the firm said in its half-year results.
Two investments, digital data providers Coppereye and Vio, were both written down to zero from £1.7 million and £2.2 million, respectively.
LMS has historically pursued a strategy of both direct investments and commitments to other private equity funds. It recently decided to focus entirely on direct investments and gradually wind down its exposure to third party funds, as reported by PEO in June.
On the back of this week’s half-year statement LMS Capital’s share price has dropped slightly to 41 pence from 42 pence.