Quest for Growth Pivot to Underperforming VC portfolio undermines our bull case

Quest for growth has decided to reduce its exposure to public equity in favour of private equity. The announced €18.7m capital reduction will be financed by selling part of the quoted portfolio. This also shrinks the already small €137m NAV, and defeats the purpose of a listed holding that should be compounding. We believe this reduces the investment case for QfG as it cuts (retail) investors access to an experienced investment team with a public equity track record. The listed portfolio delivers stable returns and balances the higher risk of the private equity portfolio. Management shrinks exposure to large-cap quoted names and redirects capital toward venture and growth private equity, despite the listed portfolio's superior long-term track record. The private equity performance has not lived up to expectations vs. the higher risk. Despite the deep discount, we believe these action will create more uncertainty about the future performance. We downgrade to HOLD (BUY) and lower our target price to €5.0 (5.9).