Albion Ventures has launched the Albion VCTs Top Up Offers seeking to raise up to GBP15m across six of its venture capital trusts.
The offers are targeting a monthly tax-free income of 5.7 per cent (should investors choose to invest equally across all offers), equivalent to 8.1 per cent on the net cost of investment after up-front tax relief at 30 per cent.
Since the business was founded in 1996, Albion VCTs have paid out dividends to shareholders every year, totalling over GBP117m.
Investors in the offers also have the option to boost their capital growth by participating in the dividend reinvestment scheme (DRIS). The scheme works by reinvesting dividends in the form of new shares in Albion VCTs, allowing investors to benefit from a further 30 per cent tax relief on the value of the dividend received.
The offers will provide investors with immediate exposure to six mature Albion VCTs, comprising a diversified portfolio of 58 businesses worth over GBP187m. These include a combination of stable asset-backed investments with a smaller number of growth and technology companies. The current focus for investment on the healthcare and environmental sectors ensures a spread that is not overly reliant on consumer-facing businesses (see note to editors for portfolio allocation). Collectively, Albion’s portfolio of companies employ over 3,900 staff, export over GBP110m a year and over the same period spend more than GBP8m on research and development.
Patrick Reeve, managing partner at Albion Ventures, says: “Based on discussions with IFAs and wealth managers, we are expecting demand for our offers to be at least as strong this year as investors seek to access a reliable income stream and the prospects of capital growth that are offered by our portfolio of mature VCTs.
“Our VCTs appeal to investors both pre and post retirement. The latter often treat Albion’s VCTs as a type of pension supplement, enabling them to access a strong income stream while preserving their capital. The former regard it as a long term savings plan and mostly reinvest their dividends to get a further 30 per cent income tax relief on the value of their dividend. After retirement they can start taking the cash instead.
“Feedback from many of our investors suggests they are proud to be backing growth in the UK’s smaller companies, many of which continue to suffer from a shortage of access to finance and yet whose health plays a crucial role in the country’s economic recovery. By continuing to build our current investments and seed future successes, Albion is well placed to stimulate long term growth and generate strong returns for our investors.”
Amounts subscribed will be invested equally across each of six Albion VCTs or as shareholders elect. The minimum investment will be GBP6,000 per investor subject to a minimum subscription of GBP1,000 per VCT chosen. The maximum amount is GBP200,000 per investor in VCTs in total for the current tax year.
There will be a first closing on 19 December 2012. Applications made thereafter will be allotted to the final closing, which will take place on 5 April 2013 for the tax year ended 5 April 2013 and 12 June 2013 in respect of the tax year ended 5 April 2014.