New Client Profile – Legendary Investments plc

Jan 19, 2012

We believe Legendary Investments is a business on the up. It came through the ‘credit crunch’, but only just, after the majority of its assets were wiped out through the collapse of its broker, forcing the Directors to stabilise the ship and maintain the AIM quote. Now, the Company looks in far better shape and a Board reorganisation sees three specialist disciplines (Investment Banking, Legal and Management Consulting) at work. Zafar Karim, Rajesh Rai and Tom Reuner have teamed-up to oversee present investees and look out for new ‘asymmetric ’ opportunities; those where sweat equity is invested for greatest potential return.

The current portfolio reflects the Directors’ relative expertise and business model. A 15.4% stake (plus option up to 40%) is held in Bosques Energeticos, a Mexican biofuels company, whose intended principal cash crop is Pongamia Pinnata, widely considered a premier feedstock in the production of biodiesel. Legendary also owns 40.5% of Undrawn Reality, a recently-formed computer games developer, whose first game, “The Spire”, has achieved the first claw-back milestone for its management, being a ‘publisher demo’, opening the door for discussions with international sponsors and producers.

Meanwhile, passive investments have been made in two natural resources companies on a ‘pre-IPO’ basis: Terra Energy (established to explore and develop ‘unconventional’ oil and gas resources) and MedGold Resources, which intends to become a gold and precious metals exploration company. The balance sheet has recently been boosted and we expect the cash to be put to value-enhancing use.