Interview Plethora Private Equity

Recently, we published on Holland Gold a article about Plethora Precious Metals, a successful investment fund in the gold mining sector that has achieved more than 500% returns over the past six years. Who is behind this Dutch fund and why are they so successful?

We spoke to founder Peter Vermeulen and fund manager Douwe van Hees about the Plethora Precious Metals Fund and their new Plethora Private Equity Fund, which is currently open to investors. You can read the interview below.

Who are you?

The Plethora Precious Metals Fund is based in Utrecht and has been active since the summer of 2012. With this fund, we invest in listed junior exploration companies. These juniors, usually listed on the Canadian Venture stock exchange, search for precious and base metals in the ground. The return of the Plethora Precious Metals Fund has been more than 500 percent over the past six years, but since 2016 the fund has not taken any more money. In fact, last December we gave money back to participants for the second time.

Why is the fund no longer accepting money from investors?

We operate in a niche of the commodity stock market, namely that of junior exploration companies. These companies are usually little more than a stock market listing, a bag of money and a geologist with a theory. It is practically impossible to allocate more money to these companies, because then our stake in them is too great.

The alternative is to invest higher up the vertical chain, for example in the (emerging) mining companies, but the figures show that this is a bad asset class in the long term. In short, we stick to our niche. The return of our participants is paramount, if only because we ourselves have a significant position in the fund.

What gave you the idea to launch the Plethora Private Equity Fund?

Last year, we launched a second fund with a focus on the commodities sector, the Plethora Private Equity Fund. With this, we finance geologists directly in their search for precious and base metals. There is a shortage of significant raw material discoveries, which is the result of years of market downturn, capital destruction by the mining companies and simply because the low-hanging fruit has already been extracted from the ground.

However, the mining companies need to keep the pipeline full and therefore need new discoveries. But for the preliminary work, Grassroots exploration, no capital is available. This is far too laborious and time-consuming for the larger parties: they prefer to wait for a discovery and buy the company in question at a considerable premium. We think we've found an interesting niche here.

What is your goal with Plethora Private Equity?

Our goal is to use this new fund to invest in promising commodity projects in stable jurisdictions. With our geologists, we can add a lot of value to these projects, because these projects require extensive geological research. The end goal, of course, is to make a return for our investors by eventually selling these projects.

Where are you active and which geologists are at the helm?

In the past year, we have founded nine companies. We are currently active in Sweden, Ireland and the United States, among others. Our technical advisor is Quinton Hennigh, an exploration geologist with a fantastic track record in the field of major resource discoveries. Our Director of Operations is Daniel James, who also has a few significant discoveries under his belt.

The most advanced of our nine companies is Bonavista Resources, based in Newfoundland, Canada. In our opinion, the very talented geologist Dave Clark, from Dan James' network, is in charge here. Last year's exploration season was promising with the discovery of high-quality gold ore in the soil samples. With further studies, we are currently mapping out the locations for further exploratory drilling, after which we can work towards a transaction, for example in the form of an IPO in Canada.

Is the Plethora Private Equity Fund still open to investors?

There is currently a registration round with a closing date of 1 April 2019. We use a two-year lockup, as it takes an average of between 12 and 24 months for our companies to go from concept to transaction phase. The pre-notice period for withdrawals is one year.

As soon as we realize a profit after a transaction, we pay out 50% of this profit to participants. The remaining 50% remains in the fund for new investments. The annual management fee is 1% and the performance fee, calculated on realized profits, is 20%. On our website you can find the most recent quarterly report, as well as additional information about the projects and the Fund Documentation.

Participate?

In the coming months, registration for the fund (from €100,000) will be open to a limited number of investors. Are you interested in participating or would you like more information? Click here (Opens a new window).

Disclaimer:

The value of the investment may fluctuate. The participant may lose money on this investment. Past performance is no guarantee of future performance. Please refer to the Provider's Essential Information Document and Information Memorandum for the full disclaimer: https://plethora-pe.com/fund-documents/. 

Holland Gold receives compensation from the provider.