Northern VCTs launch joint share offers

Northern VCTs launch joint share offers .

6 August 2013

Northern VCTs launch joint share offers to raise up to £50 million

Offer highlights:

  • £50 million joint offers by Northern Venture Trust PLC, Northern 2 VCT PLC and Northern 3 VCT PLC
  • 8.8% per annum tax-free dividend yield*
  • 30% income tax relief available on subscriptions
  • Funds have diversified and mature portfolios with a high proportion of common holdings
  • Experienced manager – NVM Private Equity has been investing in growing unquoted UK companies for over 28 years
  • Team of 12 investment executives based in key locations across the UK
  • Strong deal flow
  • Investors have the option to invest in any one or a combination of the funds

* Based on each VCT’s stated dividend policy, the initial offer price net of 30% income tax relief, and assuming equal amounts are invested in each of the three VCTs.

Northern Venture Trust and Northern 2 VCT and Northern 3 VCT – Venture Capital Trusts (VCTs) managed by NVM Private Equity – have launched joint offers for subscription to raise up to a total of £50 million.
The funds raised will be invested mainly in later-stage unquoted UK companies with high growth potential. The three VCTs aim to provide investors with high long-term tax-free returns through a combination of dividend yield and capital growth. As at 30 June 2013, the three VCTs had combined net assets of £185 million. In the past 10 years, over £200 million has been invested by NVM’s funds in VCT qualifying investments.

Tim Levett, Chairman of NVM Private Equity, commented:
“Due to the overwhelming demand for our Northern Venture Trust and Northern 2 VCT linked share issue at the beginning of 2013, we decided to give investors the opportunity to participate in a larger offering across all three of our VCTs. This will provide us with more funds to invest in businesses across the UK – further strengthening our portfolio.”

Over the past 12 months, NVM’s funds have invested a total of over £30 million in six growing businesses: Silverwing, Haystack Dryers, Intuitive, Cleveland Biotech (Holdings), Kirton Group and Buoyant Holdings.
There have also been some profitable exits from the portfolio, with the sales of Paladin Group, Interlube Systems, Tikit Group and IG Doors taking place in the same period, delivering combined income and capital proceeds for the VCTs of over £27 million.

Tim Levett, continued:
“Our Northern VCTs are well-established funds with a policy of investing jointly in new opportunities. Currently, over 85% of their VCT-qualifying portfolios are commonly held in 33 investments across a range of different industry sectors. Investors in the new share offers will therefore gain immediate exposure to a common portfolio of mature and diverse smaller UK companies with high growth potential.”

In the VCTs’ latest completed financial years, Northern Venture Trust paid tax-free dividends of 6.0p, with Northern 2 VCT and Northern 3 VCT each paying 5.5p – all in line with their stated targets. Dividends have been at or above the target levels for the last five financial periods. From inception to 30 June 2013, the three funds have generated a total return (latest net asset value plus cumulative dividends paid) of 201.9p, 150.2p and 144.2p respectively. The Northern VCTs are all ranked in the top 10 out of 40 generalist VCTs based on NAV total return over five years to 30 June 2013 (source: Association of Investment Companies) and jointly won the “VCT of the Year” category at the Investment Week Investment Company of the Year Awards 2012.

In order to provide shareholders with the opportunity to realise value after the initial five year holding period, the Northern VCTs have a policy of buying back their shares in the market at a 10% discount to the latest published net asset value, subject to certain conditions.

The share offers are promoted by VCT marketing specialists Downing LLP, who have been working with NVM in this role since 1999.

The key points of the offers:

  • Closing dates: 4 April 2014 (for 2013/14 tax year) and 30 April 2014 (for 2014/15 tax year), unless fully subscribed earlier
  • Offer size: £50 million (£15 million for Northern Venture Trust, £15 million for Northern 2 VCT and £20 million for Northern 3 VCT)
  • Offer price: Based on each fund’s NAV plus issue costs (see Illustrative yield per Offer Share table in Investor Guide www.nvm.co.uk/vctig2013 )
  • Minimum investment: £6,000 (across all three funds)
  • Maximum investment: £200,000 (per tax year)
  • Annual management fee: 2.06% of net assets
  • Annual expenses: Capped at 2.9% per annum of each fund’s respective net assets

Notes to editors:

For further information about the Offer please visit NVM’s website www.nvm.co.uk/vctoffer

Northern Venture Trust www.nvm.co.uk/investor-area/nvt

Northern 2 VCT www.nvm.co.uk/investor-area/n2vct

Northern 3 VCT www.nvm.co.uk/investor-area/n3vct

NVM Private Equity Limited (NVM)
is independently owned with over 28 years’ experience of investing in unquoted UK businesses. NVM is a generalist investor, managing £240m of funds, and is differentiated by having executives living and working in regional business communities throughout the UK. NVM seeks investment opportunities in UK businesses which have the right mix of growth potential and market vision. They may be looking to grow organically, acquire another business or secure a management buy-out. Typically, NVM looks to invest between £2m and £10m in each transaction. www.nvm.co.uk

For further information please contact:

  • Tim Levett (Chairman) – 0118 951 7010
  • Liberty Bollen (NVM: PR & Marketing) – 0118 951 7017
    liberty.bollen@nvm.co.uk
Natalie Dickinson

PR & Marketing Natalie Dickinson