Q1 2025 Portfolio Highlights - 248 Emerging Companies Fund & 248 Emerging Companies Fund II

Welcome to the Quarterly Investor Update for the March 2025 quarter.

We have been providing these updates for over five years now, and the March quarter report always feels the most dramatic. In March 2020 it was COVID, in 2021 renewed lockdowns, in 2022 war in Europe, the tech stock roll-off and crypto meltdown, and in 2023 the collapse of Silicon Valley Bank and the explosion of Chat GPT, as both an opportunity and a risk. In 2024 we felt some relief but in 2025 it seems the dramatic events are back.

We were barely through the month of January before the release of DeepSeek, a newer and cheaper Chinese version of Chat GPT, blindsiding investors, precipitating a sell-off in large global tech names and forcing a rethink about investing in AI. Since then, market falls have persisted, and at the time of writing, chaos is erupting in global financial markets as a result of the US tariff changes. This has left many companies reorganising their supply chains, and investors are questioning the likelihood of a global recession. What does this mean for our portfolio companies? The tariffs impact companies exporting products into the US. Across both our Funds, only four out of our 17 portfolio companies produce products, with the remainder selling services or software, which are not subject to tariffs. Of those producing tariff-attracting products, only three sell in the US. We discuss which portfolio companies are impacted by the tariffs in our fund-specific quarterly reports.

Divestments and Distributions‍
During the quarter, the 248 Emerging Companies Fund II (Fund 2) completed the sale of its position in Mason Stevens and the sale proceeds were distributed to unitholders in early April.

Mason Stevens performed well over our hold period, and whilst the company was unable to achieve an IPO as planned, the business continued to pay dividends and grow. We are pleased to be able to achieve this exit for unitholders.

During the quarter, the 248 Emerging Companies Fund (Fund 1) also realised its small remaining position in Swoop Limited (ASX:SWP). Realisations from the sale of Swoop totalled $550,582 and the Fund realised a loss from the position. There were no further realisations during the quarter, although progress is continuing in liquidity discussions across the portfolio. Fund I now has eight companies remaining.

Across both Funds, our focus remains on realising liquidity.

Click here to watch our Portfolio Managers, Jonathan Pearce and Christian Jensen, deliver this quarter's commentary.

As always, if you have any further queries, please do not hesitate to contact us.

Quarterly Investment Reports 

The latest Quarterly Investment Report for the 248 Emerging Companies Fund and the 248 Emerging Companies Fund II can be accessed here.