Another good year for investor
Technology firms ‘may be overvalued’ says SEP chief
He believes this is therefore a good time to be selling, although buyers will be wary of overpaying for assets.
Despite his caution, Mr Paterson said the market remained attractive and the year to the end of June had produced £99 million of investments against £50m in the previous 12 months.
The company, formerly part of Scottish Enterprise, has grown significantly in recent years and counts some of Scotland’s most successful technology companies such as Skyscanner and Craneware among those it has backed.
“The technology sector is especially buoyant right now but we have been there before and history has taught us to be very selective in terms of new investments,” he said.
“While there are undoubtedly some very attractive opportunities, many of the companies we see may ultimately struggle to justify their lofty valuations. Exit conditions are good right now, however, and this is arguably a better time to be selling than to buying.”
It also raised £135m for a clean energy infrastructure fund under a deal that saw it buy a gas transport business, since renamed as Indigo Pipelines, from Perth-based SSE for £52.7m.
Paterson added: “Since setting the firm up back in August 2000, we have grown our team significantly, evolved our investment approach, and diversified our business model through the addition of secondary and infrastructure funds.
“We have remained firmly committed to investment in Scotland, but have extended our investment reach throughout the UK and into Europe.
“Fundamentally, however, we have continued to back high quality and entrepreneurial management teams and to support high growth technology companies across the information technology, healthcare and energy sectors. Our market opportunity remains very positive.”