The Flemish investment company PMV made a profit of 67.6 million euros last year. That’s the highest profit ever from its operations. Argenx and Pharmafluidics brought in money. Biocartis, Avantium and Unifiedpost were disappointing.
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PMV was established in January 2002 as a government instrument to support the Flemish economy. She took over that role from Gimv, which has been going her own way since its IPO in 1997. Flanders’ financial arm is adding luster to its 20th anniversary with its highest profit ever. Or rather: the highest profit ever from its operations, because in 2005 the figure was higher – but only due to a purely accounting construction around Textiel Vlaanderen.
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While capital gains and losses roughly balanced each other in the corona year 2020, the positive outliers this year are three times greater than the net losses.
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PMV cashed in on the sale of its interest (18.72%) in the biochip developer Pharmafluidics and part of its stake in the biotech company Argenx. On the other hand, she had to sit on the blisters for her investments in Unifiedpost, Avantium and Biocartis. Their share price plunged 40.2 percent, 16 percent and 22 percent respectively in 2021.
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Corona
Investments fell by a quarter to 218 million euros. “They still bear the marks of the corona pandemic, but that will no longer play a role this year,” says CEO Michel Casselman. PMV typically invests 150 to 180 million per year. The largest investment – about 20 million euros – was in Arcadis Ost 1, a German wind farm that the Flemish Parkwind is developing in the Baltic Sea.
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Part of the above capital losses is due to depreciation on corona loans. Between May 2020 and October 2021, PMV granted 215 million euros in such loans. Those have already been withdrawn for 175 million. ‘We write off the loans by about a third when they are granted. It is not yet clear whether we will incur losses. The largest part has to be paid off within two years’, says Casselman.
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Transparency
Questions are regularly asked in the Flemish Parliament about PMV’s investments. Member of Parliament Maurits Vande Reyde (Open VLD) criticizes that too much money flows abroad. According to him, PMV invested 435 million euros of taxpayers’ money in funds. Of the 2 billion that these invest in companies, only a third flows to Flanders, he believes. In general, Vande Reyde believes that PMV is not sufficiently transparent about its investments. ‘The Flemish government must insist on this in the new management agreement.’
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PMV is criticized. ‘For every euro we invest in such funds, those funds invest 2.5 euros in Flanders. The multiplier effect on our investments is large. And providing transparency is not easy, because it involves sensitive investment decisions’, says Casselman.
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Looking for independents
PMV recently started a search for three independent directors. Soon, six candidates from the dozens of applications will be presented to the Flemish government. She must select three.
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The current independent directors are Peter Verhaeghe, Luc Gijsens and Rosette S’Jegers. There is a chance that some of them will be candidates again.
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The Flemish government has six representatives at PMV. The board of directors is chaired by Koen Kennis (N-VA).
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