Mitchell Fraser-Jones answers about industrial Heat investment
Thanks for your comment.
As we have stated previously, the investment in Industrial Heat was the product of 2 years of due diligence. The company is indeed engaged in a legal dispute regarding the ownership of some of its intellectual property but it is not uncommon for early-stage businesses to be caught up in such disputes. More importantly, the claims relate to just one part of Industrial Heat’s technology suite. The company has built up a very interesting portfolio of promising cold fusion technologies that are currently undergoing in-house testing, followed by external validation.
We are very confident about the investment in Industrial Heat and excited about its considerable long-term potential. Clearly, however, we cannot guarantee that it will be successful. As Neil mentions in the report, not all businesses will fulfil the potential that we saw in them when we first invested. We employ a rigorous due diligence process for all investments, large or small. What follows this due diligence process is a valuation judgement. This judgement draws on all the intelligence gathered through the due diligence phase, supplemented by judgements that Neil makes about the returns that success would deliver, the risks that potentially stand in the way of that success, as well as a range of other judgements about the broader market environment and investment opportunity set.
In this instance, the result of that work is a positive judgement on Industrial Heat. It is by no means a risk-free investment, but then again, nothing ever is. In our view, however, the potential long-term rewards justify those risks.
This is just what we said since long.
- Industrial Heat is not only Rossi, but other research in progress
- This is a risky investment, with huge uncertainty but huge expected return too.