Investor guide. Baronsmead Venture Trust plc Baronsmead Second Venture Trust plc

Transcription

1 Investor guide Baronsmead Venture Trust plc Baronsmead Second Venture Trust plc

2 Who are Baronsmead? We invest in the future of British businesses, supporting innovative smaller companies that we believe are the driving force of the UK economy. And we ve been doing it for a long time the first Baronsmead VCT was established in 1995 and was one of the first VCTs to be launched. The Baronsmead team has been backing growing businesses for over 20 years and has invested in over 260 unquoted and AIM listed companies since launch. Through these investments the team has built an extensive entrepreneurial network and sector expertise across consumer, TMT (technology, media and telecommunications), services and healthcare & education sectors. The Baronsmead Venture Capital Trusts are tax efficient listed companies which aim to achieve long-term investment returns for private investors, including tax free dividends. Investment objectives The Baronsmead Venture Trust ( ) and the Baronsmead Second Venture Trust ( ) seek to invest primarily in a diverse portfolio of unquoted and AIM listed companies. Investments are made selectively across our range of sectors in businesses that we believe have the potential to grow and enhance their value. Summary of the Baronsmead portfolios 1 Combined Business Services 26% Consumer Markets 12% Healthcare & Education 19% Technology, Media & Telecommunications (TMT) 43% Business Services 28% Consumer Markets 12% Healthcare & Education 18% Technology, Media & Telecommunications (TMT) 42% Business Services 25% Consumer Markets 12% Healthcare & Education 19% Technology, Media & Telecommunications (TMT) 44% Where do our deals come from? An investable universe of companies is appraised to generate ideas The investment team have built strong networks with business owners, senior talent, early stage investors and angel investors to generate deal pipeline 140 VCT team fully appraise c.140 potential investments per annum 2 We leverage the investment team s sector knowledge and network to source suitable deals As a result of significant VCT rule changes that came into force in November 2015 and with the Finance Act of 2018, the Baronsmead VCTs now invest principally in small, early stage, unquoted and AIM-traded companies.

3 Performance Net Asset Value 1 m Sep 2014 Sep 2015 Sep 2016 Sep 2017 Sep m Net asset value at September m Net asset value at September 2018 Total Returns 1 1 year 6.86% 5.44% 5 year 47.00% 40.58% 10 year % % Since launch % % % Total returns from since launch (April 1998) % Total returns from since launch (January 2001) Recent dividends The Baronsmead VCTs seek to pay two dividends per calendar year, in line with their dividend policy. The historic dividends paid by Baronsmead are shown in the table below, including the target minimum annual dividend set by each Company in its respective dividend policy, and the average dividend achieved over the past ten years. Dividend track record 1 Pence * Dividend Policy - 6.5p Dividend Policy - 6.5p 3 8.7p Average dividend paid and declared in the last 10 years* 9.9p Average dividend paid and declared in the last 10 years* *Includes proposed final dividend of 4.5p 1. All data Baronsmead as at 30/9/18 2. Unquoted and AIM traded businesses which could potentially be VCT qualifying and are fully appraised by the Baronsmead investment team. 3. From 30/9/18 Dividend Policy increased from 4.5p to 6.5p

4 Our recent investments Our recent exits Quoted Unquoted The period of activity highlighted below focusses on the past two years for Baronsmead following the rule changes in November 2015 and the Finance Act of 2018, which refocused VCT investment on smaller, earlier stage Electric Word plc 4,400, x return EQUE2 Eque2 Limited 11,700, x return Crew Clothing Company Ltd 12,400, x return In the Style 0 0.0x return Key Travel Holdings Limited 13,000, x return UK growth businesses. Over the past 12 months the Baronsmead VCTs have invested a total of 12.5m in Oct 2017 Mar 2018 Jun new qualifying investments both unquoted and listed on AIM, and 2.8m in follow on investments. Aug 2017 Dec m invested in new investments over the past 12 months 2.8m in follow-on investments 13 new qualifying investments both unquoted and listed on AIM Ubisense Group plc 140, x return EG Solutions plc 4,900, x return Plant Impact 900, x return Escher Group Holdings plc 3,300, x return FreeAgent Holdings 2,500, x return Quoted 4. Proceeds include interest received over the investment hold period All data correct as at Unquoted Cloudcall Group plc 1,300,000 Collagen Solutions plc 750,000 In the Style 5,000,000 Plant Impact 2,000,000 SilkFred SilkFred Fusion Antibodies plc KRM22 plc Access Intelligence plc 1,150,000 I-Nexus Global plc 1,250,000 YourWelcome 700,000 Labrador Securecloud+ 1,500,000 Oct 2016 Mar 2017 Apr 2017 Jul 2017 Aug 2017 Dec 2017 Apr 2018 Jun 2018 Sep 2018 Nov 2016 Mar 2017 May 2017 Aug 2017 Dec 2017 Jan 2018 Jul 2018 Sep 2018 FreeAgent Holdings 1,750,000 Moteefe Rosslyn Data Technologies plc 960,000 Symphony Ventures 3,500,000 Beeks Financial Cloud Group plc 750,000 Cloudcall Group plc PCI Pal plc 900,000 Munnypot Ixico plc 1,500,000 Moteefe Pointr Equipsme 800,000 Moteefe 300,000 All data correct as at

5 Change of manager As detailed at the start of November, the investment manager for the Baronsmead VCTs, will change to Gresham House Asset Management Limited (Gresham House), following the sale of Livingbridge VC s fund and investment management business. Peter Lawrence Chairman Baronsmead Venture Trust During the sale process, the Boards of the Baronsmead VCTs had key questions for the transferring management team and the proposed new owners. We undertook a rigorous due diligence process as it was critically important for the Boards that the investment and operational teams remained in place and that they would be happy under the new manager. We also wanted to ensure future investment in the team and a commitment to continue the same high standards of Governance we all associate with Baronsmead. In Gresham House plc we are confident we have found the right partner who not only answers these questions but deems them as important as we do. We look forward to working with Gresham House on our upcoming fundraise in January 2019 and beyond. John Davies Chairman Baronsmead Second Venture Trust Peter Lawrence and John Davies Our senior team We know how important continuity of team is for fund performance. This is why the five members of the leadership team, who have been responsible for the management and performance of Baronsmead over recent years, and the broader team comprising a further five specialist investment professionals and six dedicated distribution, financial and operational staff, are all moving to Gresham House. We are very proud of the achievements and long term performance of Baronsmead under Livingbridge s management. As a senior team we have an average tenure of over 12 years, and work to ensure we deliver high standards of deployment, portfolio management and investment performance. Given the refocusing of venture capital trusts to investing in younger, earlier stage growth companies, we are delighted to have found an ambitious partner in Gresham House who will support us with additional investment to continue to invest in high growth entrepreneurial UK businesses and to keep delivering returns for shareholders. Heather Duncan Bevan Duncan Director, Portfolio Steve Cordiner Director, Unquoted Investments Ken Wotton Managing Director, Quoted Investments Heather Duncan Head Of Client Relations & Sales - Baronsmead VCTs & Equity Funds Tania Hayes Divisional Finance Director, Strategic Equity

6 About Gresham House Gresham House is a London Stock Exchange listed specialist alternative asset manager. I am delighted that the highly capable team that manage the Baronsmead VCTs are joining Gresham House to build on our quoted and unquoted investing. We have a close cultural fit and can share experience of venture investing and our focus on high standards of governance. The senior leadership group and their teams will get all the support we can offer from Gresham House and also through the transitional support agreement with Livingbridge, allowing them to carry on with business as usual while ensuring their focus remains on performance for shareholders. I am looking forward to welcoming them to the team and an exciting future ahead. Transition from Livingbridge Following the sale, a formal three year transition agreement between Gresham House and Livingbridge has been put in place. In practice, for Baronsmead this means there is support available for the transferring investment team to ensure handover of ideas, best practice and private and public networks. In addition, Andrew Garside and Sheenagh Egan, two Partners at Livingbridge who have worked on Baronsmead, will continue as consultants to Gresham House for up to three years in order to provide continuity and deliver a smooth transition. Anthony Dalwood is the CEO of Gresham House plc. He is an experienced investor having worked at Phillips & Drew Fund Management (later UBS) and SVG (formerly Schroder Ventures). He also currently Chairs the London Pension Fund Authority s Investment Panel, which oversees 4.6 billion in AUM. Andrew Garside Partner 1857 Incorporated m Market capitalisation* 2.1bn AUM* *Latest publicly available Anthony Dalwood CEO Sheenagh Egan Partner Anthony Townsend, former Chairman of Baronsmead Second Venture Trust plc ( ) is also the Chairman of Gresham House plc and for this reason he took no part in the decision to appoint Gresham House plc as the new Investment Manager. John Davies, as senior non-executive director of, led the Board discussions, due diligence and final decision on the matter. Given Mr Townsend s role at Gresham House, he stood down as Chairman of following completion, but will remain as a non-executive director to ensure Board continuity going forward.

7 Octagon Point, 5 Cheapside, London, EC2V 6AA baronsmeadvcts.co.uk Fundraising To register for further details about future Prospectus Offers please contact RAM Capital on or taxsolutions@ramcapital.co.uk Key information on the key risks specific to the issuer Changes in economic conditions and other factors can substantially and adversely affect the value of investments and therefore either Company s performance and prospects. The past performance of the Companies, and of investments managed by the Investment Manager, is not necessarily indicative of future performance. There is no guarantee that the investment objectives will be achieved or provide the returns sought by the Companies or that suitable investment opportunities will be available. The success of the Companies will depend on the Investment Manager s ability to identify, acquire and realise investments in accordance with the investment policy and there can be no assurance that the Investment Manager will be able to do so. Investment in private companies involves a higher degree of risk than investment in companies traded on the Main Market of the London Stock Exchange. Smaller companies often have limited product lines, markets or financial resources and may be dependent for their management on a smaller number of key individuals. In addition, the market for stock in smaller companies is often less liquid than that for stock in larger companies, bringing with it potential difficulties in acquiring, valuing and disposing of such stock. Full information for determining their value or the risks to which they are exposed may also not be available. The investments may be difficult to realise. The valuation of the portfolios and opportunities for realisation may also depend on market conditions. Changes in legislation concerning VCTs may limit the number of Qualifying Investment opportunities, reduce the level of returns which would otherwise have been achievable or result in the Companies not being able to meet their investment objectives. Key information on the key risks specific to the securities The value of New Shares depends on the performance of the underlying assets of the Companies. The market price of the New Shares may not fully reflect their underlying Net Asset Value. Trading in VCT shares is generally limited and shares in VCTs tend to be valued at a discount to their net asset value and may be difficult to realise. As a result, Shareholders may be offered a price which is less than the full value of underlying assets. It is likely that there will not be a liquid market in the New Shares (which may be partly due to up-front tax relief not being available for VCT shares bought in the market and as VCT shares generally trade at a discount to net asset value) and Shareholders may have difficulty in selling their New Shares as a result. Shareholders may not be able to realise their investment at Net Asset Value or at all. Important Information: This document is a financial promotion issued by Gresham House Asset Management Limited ( Gresham House ) under Section 21 of the Financial Services and Markets Act Gresham House is registered in England and Wales (Co. no ) having its registered office at 5 New Street Square, London, EC4A 3TW and is authorised and regulated by the Financial Conduct Authority with reference number The information in this document should not be construed as an invitation, offer or recommendation to buy or sell investments, shares or securities or an invitation to apply for securities in any jurisdiction where such an offer or invitation is unlawful, or in which the person making such an offer is not qualified to do so. Whilst the information in this document has been published in good faith, Gresham House provides no guarantees, representations or warranties (express or implied) regarding the accuracy or completeness of this information. To the fullest extent allowed by law and the rules and regulations of the Financial Conduct Authority, Gresham House, its affiliates and each of its directors, members and employees expressly disclaims liability in respect of errors or omissions and shall have no liability to you or any third party for any loss or damage arising out of the use or reliance on the information provided in this document including, without limitation, any loss of profit or any other loss, damage, cost or expense of any nature including any consequential, indirect or unforeseeable losses. Any reference to past or future performance should not be viewed as a reliable indicator of how the investments will perform in the future. The value of investments and/ or funds may rise or fall, and investors capital is at risk. Tax treatment depends on the individual circumstances of each investor and may be subject to change. This document is provided for the purpose of information only and before investing you should read the Prospectus and the key investor information document (KID) as they contain important information regarding the funds, including charges, tax and fund specific risk warnings. Before entering into an investment agreement in respect of an investment referred to in this document you should consult your own professional and / or investment adviser. Investment manager greshamhouse.com ramcapital.co.uk