Venture Capital Trusts

Transcription

1 Venture Capital Trusts Venture into tax-efficient investment

2 VCTs: venture into tax-efficient investment Venture Capital Trusts (VCTs) were created over 20 years ago and are one of the most tax-efficient investments available. They allow investors to support some of the UK s smallest businesses by providing the capital they need to grow and develop. To encourage investment in this crucial but higher risk area, the government offers generous tax benefits to investors. VCTs are fast becoming a mainstream investment option and are no longer considered as just an investment for very high net worth individuals. The initial income tax relief, along with tax-free dividends and no capital gains tax upon disposal, make VCTs a very attractive proposition. Tax benefits for investors 30% income tax relief, provided the VCT shares are held for at least 5 years Tax-free dividends 0% capital gains tax Discounts available Chelsea will rebate the initial commission to you to reduce the initial charges on these VCTs. This means that it can be significantly cheaper to invest through Chelsea, rather than directly with the VCT manager. How to invest Please telephone us on for the prospectus and application form or visit our website at to download a copy. Understanding the risks Please be aware that VCTs are long-term, highly illiquid investments. VCTs usually invest in small, unquoted companies and carry a greater risk than many other forms of investment. In addition, the level of charges are often greater than unit trusts and OEICs. Past performance is not necessarily a guide to the future. The value of investments, and the income from them, can fall as well as rise and you may not get back the amount invested. Chelsea Financial Services offers an execution-only service. If you require investment advice you should contact an adviser. Tax relief is restricted to total VCT investments for each investor to 200,000 per tax year. Tax is subject to statutory change and the value of tax relief (if any) will depend on individual circumstances. The VCTs featured in this brochure are not the only VCTs offer available and this mailing is not a recommendation. Any decision to invest should be made solely on the basis of the information contained in the relevant VCT prospectus. *The net asset value (NAV) and total dividends per share of each VCT was supplied by FE Analytics, as at 7 September

3 Mobeus VCTs This is an 80 million share offer, spread across Mobeus four existing VCTs. Investors may choose to invest in all, or any, of the VCTs. The majority of investors typically spread their investment equally across all four VCTs. The Mobeus VCTs target a 4-6p dividend per annum. Chelsea is offering a 0.75% discount and an extra early bird discount of 1% for those who participate in the first 50 million of the offer. New regulations, which came into force in November 2015, no longer allow VCTs to provide finance for management buyouts (MBOs). In response, Mobeus Equity Partners has made significant changes to its investment process and expanded its team. The firm now targets younger growth companies. Investors can also gain access to Mobeus existing MBO portfolio. What s in the portfolio? MBOs account for around 87% of the portfolio, with the remaining 13% in growth companies. There are 45 companies in the portfolio, including well-known brands such as Virgin Wines. MyTutor, a digital platform for online private tutoring, represents a recent addition to the portfolio. Mobeus last raised money in December 2014, so the team is not sitting on cash. VCT name Mobeus Income & Growth Mobeus Income & Growth 2 Mobeus Income & Growth 4 Income & Growth VCT NAV as at 29/06/ p 98.71p p p NAV as at 30/06/ p p p 96.21p Total dividends per share (29/06/ /06/2017) 62.75p 55p 53.70p 59p Chelsea view Mobeus is an established company, with an impressive and experienced management team. Due to the company s strong track record, we would expect to see healthy demand from new and existing shareholders for this VCT offer. It is worth noting that new investors can buy into the existing income-generating portfolios, alongside newer growth investments. This allows Mobeus to continue to pay tax-free dividends whilst they build the new growth portfolio. Minimum investment is 6,000, which can be split over all four VCTs, with a minimum of 1,500 in any chosen VCT (within the Mobeus range). 3 April 2018, although the VCT may close before this time. 2

4 Unicorn AIM VCT This is a 30 million share offer for the Unicorn AIM VCT, with flexibility to raise an additional 20 million. This offer provides access to a diverse and mature portfolio of 95 companies, which have the potential to deliver immediate capital growth and tax-free dividends. Unicorn AIM is the largest VCT specialising in AIM companies, with 162.2m under management. It was voted Best VCT at the 2016 Investment Company of the Year Awards. It has performed well since launch in 2001 and has paid consistent tax-free dividends, averaging 6.17p per share over the past three financial years.^ Chelsea is offering a 3.5% discount to existing clients and a 3.25% discount to new clients Unicorn Asset Management has a large and experienced team, which specialises in small and mid cap investment. They have a strong track record running open-ended investment companies (OEICs), including Unicorn UK Smaller Companies, Unicorn UK Income and Unicorn Outstanding British Companies. The Unicorn AIM VCT looks to identify cash-generative companies with well-established business models in growing markets. Start-up and early-stage companies are avoided. What s in the portfolio? This is a diverse and mature portfolio of 95 companies across more than 17 sectors. Most of these companies are profitable and approximately half pay out dividends. It is expected that the assets raised through this offer will be held in a combination of cash and Unicorn OEICs while the team deploys the money across initial public offerings, secondary placings, and unquoted companies. VCT name Unicorn AIM VCT NAV as at 29/06/ p NAV as at 30/06/ p Total dividends per share 32p (29/06/ /06/2017) Chelsea view Unicorn is a boutique asset management firm, specialising in UK smaller companies. It has an experienced team and diversified portfolio of companies that are already profitable and stable, which are likely to deliver sustained growth. We like that tax-free dividends have been consistent, with an average of 6.17p per share paid out to investors over the past three years.* Minimum investment is 2, November 2017, although the VCT may close before this time. ^Unicorn factsheet, 30/06/2017 3

5 Maven Income & Growth VCTs 3 & 4 Maven is planning a 15 million top-up offer for each of its Income and Growth VCTs 3 and 4. There is flexibility to raise a further 10 million. Launched in 2003 and 2004 respectively, there are approximately 40 companies in each VCT. The portfolios include a mix of mature private businesses, alongside younger companies with growth potential. Chelsea is offering an early bird discount of 4% to existing investors and 3.75% for new investors. This special discount will end on 30 January. Thereafter the discount will be 2.5% for all investors. Maven s investment team looks for companies with strong management teams, which have a product or service that is in demand. Particular emphasis is placed on companies which have the potential to start paying dividends. Maven s 25-strong team is one of the largest in the VCT industry and operates from 10 regional offices. They remain actively involved with companies post-investment, with Maven executives invariably taking a seat on the board. What s in the Portfolio? The portfolio consists of companies in different stages of their development. It includes established businesses which generate substantial revenues and profits, alongside earlier stage companies with disruptive business models and the potential for significant returns over time. On a sector basis, industrials, financials and consumer goods make up over half of the portfolios. The VCTs have initiated 10 new investments since April 2016, making them one of the most active VCT managers since the rule changes. They also have a legacy book of management buyouts (MBOs), which provides diversification within the portfolio. New regulations, which came into force in November 2015, no longer allow VCTs to provide finance for MBOs. VCT name Maven Income & Growth 3 Maven Income & Growth 4 NAV as at 29/06/ p 99.20p NAV as at 30/06/ p 96.35p Total dividends per share (29/06/ /06/2017) 24.25p 21.90p Chelsea View As Maven VCTs are mature portfolios, they offer the potential for tax-free dividends. They have a strong history of profitable exits from investments, regular dividends and rising net asset value (NAV) total returns. New investors will immediately be eligible for future dividends. This, in tandem with potential portfolio realisations, makes these VCTs attractive to both new and existing investors. Minimum investment is 5,000, which can be split between the two VCTs. 3 April 2018, although the VCT may close before this time. 4

6 VCTs Capital has over 21 years' experience managing VCTs. With more than 340 million under management, they are one of the largest VCT managers in the UK. is planning to raise 32 million across five VCTs. Investors who invest in all of the five Offers will receive at least ten tax-free dividends per year. Existing investors who participate in the first 10 million of the fundraise will benefit from a discount of 1%, while new investors will receive a 0.5% discount. Please note that this discount is only available to those who contribute towards the first 10 million raised before 31/10/17. takes a hands-on approach to investment management, employing experts in specialist fields to help underlying businesses in the portfolio to grow quickly and efficiently. As at 31st March 2017, across the five VCTs, asset-based investments accounted for around 42% of net assets, growth and technology investments for around 37% with the balance of 21% hold in cash. This provides diversification for investors. What s in the Portfolio? is a generalist VCT, with 60 businesses in the portfolio across the healthcare, education, environment, leisure and technology sectors. Historically, the VCTs have invested in renewable energy. It is worth noting that in 2015, VCTs were prohibited from investing in renewable energy schemes. The good news is that these historic investments provide the portfolio with a long term, inflation-linked income stream and diversification. Outside of renewable energy, one success story has been an investment into fee-paying schools in Twickenham and Sevenoaks. Initial investment totalled 12.7 million and the schools now have a combined valuation of 26 million, as at 31st March VCT name Development Enterprise Technology & General Venture Capital Trust (suspended) Crown Place Kings Arms Yard NAV as at 29/06/ p 83.50p 83.30p 75.90p 32.60p 17.10p NAV as at 30/06/ p p 71.10p 75.70p 30.99p 31.81p Total dividends per share 24.50p 23.50p 24.50p 22.50p 12p 5.50p (29/06/ /06/2017) Chelsea view has a wealth of experience. Investors can benefit from a well-managed and diversified portfolio. We like the regular tax-free dividends, which can be used to supplement an income or can be reinvested using the dividend reinvestment scheme. Minimum investment is 6,000, which can be made across all five VCTs, or split with a minimum of 1,000 in any chosen VCT (within the range). 3 April 2018, although the VCT may close before this time. 5