Waterhouse VC is a fund for wholesale investors, specialising in global publicly listed and private businesses related to wagering and gaming.

Since inception in August 2019, Waterhouse VC has achieved a gross total return of +2,960% (+102% annualised), as at 30th June 2024, assuming the reinvestment of all distributions.

Turning back the clock

We started the fund on 19 August 2019 and I am very pleased that our 5 year anniversary is fast approaching, with outstanding results for investors over the past year. The fund returned 53.3% for the 2024 financial year, a result our team is proud of.

While global equities have been favourable over the past 12 months, our performance has not relied on these tailwinds, outperforming the S&P 500 by +31%. Returns have been achieved across each pillar of our strategy (Option Deals, Professional Betting, Global Equities).

We’re pleased with the fund’s performance since launching, particularly given the challenges of finding attractive deals during a period of exuberance for growth assets in 2021. Last year’s results bring the return since inception to 102% per annum before all fees. An investment of $100,000 at inception in August 2019, assuming reinvestment of all distributions and before fees, would be worth $3.06m as at 30 June 2024.

*Waterhouse VC’s performance. Source: Waterhouse VC*

Winner’s circle

The fund has generated a positive return in 8 of the last 12 months. Two businesses in particular, Project Tennis and Saintly, contributed significantly to the fund's performance.

Project Tennis is a professional betting syndicate specialising in tennis. Waterhouse VC invested in the syndicate in July 2023. The syndicate has achieved:

Profit of £5 million in 2023, tripling 2022 profits.
Industry-leading win rate of over 5% on betting turnover.

This income stream is uncorrelated with financial markets and is passed through to our investors, with the fund set to earn back its entire investment within two years.

Saintly is a crypto wagering operator and B2B platform. The position was exited in August 2023 and has been the largest single contributor to the fund’s performance over the last year. The deal delivered a 23x return, showcasing our ability to leverage our industry network for strategic exits and move quickly when an opportunity arises to achieve the best possible outcome for our investors.

*Waterhouse VC’s journey with Saintly. Source: Waterhouse VC*

Class of 2024

Successful years are not just about outperforming the market, though we certainly prefer it. They're also about setting the fund up for future performance with opportunities on attractive deal terms.

On this front, we are seeing an acceleration of deal flow on the back of our compounding track record and industry network. The fund completed three option deals in the June quarter, one of which we discuss in depth below.

B2B focus

Our primary focus on B2B suppliers to wagering operators has not wavered. We prefer B2B for four key reasons:

Project Marston

As the fund matures, our deal flow has accelerated, particularly in professional betting syndicates. We last discussed professional betting in February. Successful betting syndicates are extremely rare and the largest syndicates have maintained dominance for over two decades. Waterhouse VC currently owns an economic interest in two professional betting syndicates - Project Tennis and Project Marston.

Project Marston is a professional betting syndicate focused on live dealer online blackjack. Globally, online casino (live, RNG-tables and slots) grew at 21% annually between 2019 and 2023.

Live casino has been the fastest growing segment within online casino, with an annual growth rate of 24% over the same period. This growth supports the proliferation of professional betting activity focused on the segment.

*Global casino market in 2023. Source: Evolution*

One of the UK's largest bookmakers recently led Project Marston's funding round. Waterhouse VC invested in Project Marston in June and betting operations were immediately scaled up. The fund is on track to earn back its entire investment within 12 months.

"We’re entering a huge, growing market that is as yet, largely unexploited and I strongly believe this has the potential to run very profitably for years." - Founder, Project Marston

*A game of live dealer online blackjack. Source: Livedealer.org*

Onwards and upwards

The fund is currently in advanced stages of due diligence or recently signed agreements with 7 businesses, 2 of which are professional betting syndicates:

Horse racing betting syndicate
Cricket betting syndicate
B2B technology solutions provider focused on horse racing
Affiliate marketing business
B2B technology supplier focused on global lottery
Subscription business that offers daily giveaways
Customer engagement and retention tool using skill-based gaming

We look forward to discussing these businesses in future newsletters.

Media

I recently went on the Troubleshooters Podcast and discussed the transformative changes in the wagering industry, emphasising the importance of adapting to new technologies and learning from mentors. Listen to the podcast here.

For wholesale investors interested in following wagering and gaming industry news and trends, please follow our updates on Twitter (@waterhousevc) or through our website at WaterhouseVC.com.

All the best,

Tom

DISCLAIMER AND IMPORTANT NOTES

Please note the above information in relation to Project Tennis, Saintly, Project Marston, Flutter Entertainment Plc, Entain Plc and DraftKings Inc is based on publicly available information in relation to the company and should not be considered nor construed as financial product advice. The Fund currently has a position in Project Marston, Project Tennis and Flutter Entertainment Plc. The information provided in this document is general information only and does not constitute investment or other advice. Readers should consult and rely on professional investment advice specific to their individual circumstances.

Not for Release or Distribution in the United States of America

This material may not be released or distributed in the United States. This material does not constitute an offer to sell, or a solicitation of an offer to buy, any securities in the United States or any other jurisdiction in which such an offer would be illegal. The units in the Fund have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the U.S. Securities Act) or the securities laws of any state or other jurisdiction of the United States. Accordingly, the units in the Fund may not be offered or sold in the United States unless they are offered and sold, directly or indirectly, in transactions exempt from, or not subject to, the registration requirements of the U.S. Securities Act and any other applicable United States state securities laws.

General Information Only

This material is for general information only and is not an offer for the purchase or sale of any financial product or service. The material has been prepared for investors who qualify as wholesale clients under sections 761G of the Corporations Act or to any other person who is not required to be given a regulated disclosure document under the Corporations Act. The material is not intended to provide you with financial or tax advice and does not take into account your objectives, financial situation or needs. Although we believe that the material is correct, no warranty of accuracy, reliability or completeness is given, except for liability under statute which cannot be excluded. Please note that past performance may not be indicative of future performance and that no guarantee of performance, the return of capital or a particular rate of return is given by Sandford Capital, Waterhouse VC or any other person. To the maximum extent possible, Sandford Capital, Waterhouse VC or any other person do not accept any liability for any statement in this material.

Financial Regulatory Oversight and Administration

Waterhouse VC is an Australian Unit Trust denominated in AUD and available to wholesale institutional investors worldwide with a minimum of AUD 500,000 or USD / EUR / GBP / JPY / CHF equivalent. This material has been prepared by Waterhouse VC Pty Ltd (ABN 48 635 494 861) (‘Waterhouse VC’, ‘Trustee’, ‘us’ or ‘we’) as the Trustee of the Waterhouse VC Fund (the ‘Fund’). The Trustee is a corporate authorised representative (CAR 1278656) of Sandford Capital Pty Limited (ABN 82 600 590 887) (AFSL 461981) (Sandford Capital) and appoints Sandford Capital as its AFS licensed intermediary under s911A(2)(b) of the Corporations Act 2001 (Cth) to arrange for the offer to issue, vary or dispose of units in the Fund.

Performance

Past performance of Waterhouse VC is not a reliable indicator of future performance. We make every endeavour to ensure results are accurate. Waterhouse VC Pty Ltd does not guarantee the performance of any strategy or the return of an investor’s capital or any specific rate of return. No allowance has been made for taxation, where applicable. We encourage you to think of investing as a long-term pursuit. Waterhouse VC’s results are indicative only and subject to subsequent year end external financial review.

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