029 announced the investment in London-based fjör, a D2C skincare brand. 029 invested roughly GBP 0.225m (GBP 0.4m pre-seed round), for which the company received a 11.25% stake, impliying a pre-money valuation of GBP 2m. With this, fjör plans to accelerate new product development, team expansion, and targeted marketing campaigns.

fjör's flagship product is the world's first hydrolytic serum, offering anti-aging and deep hydration benefits. Developed in collaboration with the Swedish life science company ZymIQ Technology, fjör's hydrolytic enzyme helps rebalance the skin's microbiome, enhances the performance of other skincare ingredients, and acts as a hydration booster. In sum, the key benefits of the hydrolytic serum include pollution protection, redness reduction, microbiome balance, hydration, and anti-aging effects. This portfolio addition fits 029's investment thesis (next-generation consumer brands) well, in our view.

Strong developments at key holdings. 029’s key portfolio company, Limestone Capital (eNuW: 72% of NAV) is seen to be well on track to expand its current hotel portfolio to more than 10 locations. What’s more, an unbroken demand for high-end hotel rooms should allow for better than usual occupancy rates but also significantly nightly rates. The CBD-infused drink company TRIP (eNuW: 9% of NAV) is quickly gaining traction in the US. In fact, the company looks set to launch a large marketing campaign to expand into additional states.

Additional portfolio addition looming. In line with its investment strategy, 029 is seen to acquire one additional strongly growing consumer brand with a focus on emerging megatrends until the end of the year. While cash on the balance sheet looks rather limited, we expect the company to either access undrawn loan facilities, issue debt instruments or raise money through a capital increase. Going forward, exits (partial or full) should be filling up the company's "war chest". 

On the back of improved peer multiples, we slightly increase our PT to € 15 (old: € 14.7), which is based on a sum-of-the-parts valuation (see page 2) with a 5% holding discount, but keep our rating unchanged at HOLD.