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VCT managers seek fresh capital

By Nick Britton on December 12 2007

In a flurry of pre-Christmas activity, Matrix Private Equity, NVM Private Equity and Foresight Group have each launched new offers for their existing VCTs. The fund managers are seeking to raise £15 million, £14 million and £10 million respectively for The Income & Growth VCT, the Northern 2 VCT and Foresight VCT 2 'C'.

Matrix will issue ‘S’ shares for The Income and Growth VCT, formerly known as TriVest VCT. The firm will manage the new 'S' share fund on its own, while the VCT’s existing ‘O’ share fund will continue to be managed jointly by Matrix and Foresight Venture Partners.

The 'S' share fund will have the same investment policy as the previous four Matrix Income & Growth VCTs, looking for companies that are ‘profitable, cash-generative and have solid growth prospects’. The aim is to offer investors a regular and growing income stream which, as with all VCTs, will be tax-free.

Meanwhile, NVM will issue up to 16 million new shares in its Northern 2 VCT at an expected price of 95p per share. If completely subscribed, this will take the company’s capital base to almost £60 million.

Established in 1999, the Northern 2 VCT invests mainly in unquoted companies, aiming to provide ‘high long-term returns’ through a mixture of dividend payments and capital growth. It has returned 35.4p per share in dividends since its launch, averaging 5.5p per year.

Finally, Foresight VCT 2 'C' is seeking a £10 million top-up, which would take the total size of the fund to £24 million if fully subscribed. The VCT aims at returning a minimum annual dividend of 5p per share by investing in early-stage opportunities in the cleantech sector as well as more mature technology companies. Recent investments have included plastics recycler Closed Loop and waste-to-energy business O-Gen.

Mike Currie, head of sales and marketing at Foresight Group, says: 'Over the past few years, a series of anti-avoidance measures by HMRC have made some of the more aggressive tax-efficient schemes either out of bounds or vulnerable to attack, leaving a scarcity of reliable tax breaks.

'VCTs, on the other hand, still offer significant tax breaks and they continue to be widely supported by the government and play an important role in supporting growth companies in the UK.'

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