Second-quarter letter, 2026

Dear partners,

This was a steady quarter. Fund V made two new investments, the companies we backed in 2025 began to show what they can do, and there was nothing to report from the exit market that would change our view of any fund.

The quarter in brief

Fund V ended June with nine companies. Both of this quarter’s investments were seed rounds, one in health and one in industrials, and both founders have asked us to wait until the autumn before naming them. Fund V called 7 per cent of commitments in the quarter, taking total calls to 18 per cent.

Full fund figures as of 30 June will be in the quarterly reports later this month. In short, marks across Funds II to IV moved by less than 2 per cent in either direction. We would rather report a dull quarter than a lively one built on a single priced round.

Portfolio

Amperra writes the software that lets a utility treat thousands of home batteries, heat pumps and car chargers as one dispatchable plant. When we led its seed round last year it had one utility customer in a pilot. It now has three under contract, and in May it ran its first full dispatch during an evening peak, holding 41 megawatts of household demand off the grid for two hours. Contracts of this kind take a long time to sign. They are also very hard to cancel once the utility has built its operations around them.

Kiln makes a cement whose production releases a fraction of the carbon of the conventional product. Its pilot line produced its first full batches in April, and in June those batches passed independent compressive-strength testing at 28 days, the standard any structural engineer will ask about first. The next step is a building-scale pour with a contractor, which the company expects to complete before the end of the year.

Neither company will need new capital before 2027. We have reserves set aside for both.

Distributions

There were no distributions in the second quarter.

Fund III’s DPI stands at 0.7x. Most of the movement came in December, when we distributed the proceeds from the sale of Ostra to Calder Health, which closed last year. Those proceeds took Fund III from 0.4x to 0.7x in a single quarter. A smaller amount held in escrow under the sale agreement is due for release in 2027 and will be distributed when we receive it.

Fund III still holds most of its value in private companies. Ostra returned cash early, but the fund’s outcome will be decided by the companies that remain, and we expect distributions from it to be uneven over the next four years.

Fund V

Including reserves, about 30 per cent of Fund V is now invested or committed. That is slightly ahead of the pace we set out when we raised it, mostly because our climate and industrial companies need more capital to reach their next milestones than software companies do. We expect the pace to even out over the next year.

Looking ahead

We expect two of our Fund IV companies to raise in the second half. We will write about both in the next letter. As always, Owen Brooks is the first person to contact with questions about this letter or your reports.