Albion Capital is seeking to raise up to GBP36 million through top up offers for its six venture capital trusts.
The fundraising targets GBP6 million for each of the six Albion VCTs: Albion Venture Capital Trust PLC, Albion Development VCT PLC, Albion Enterprise VCT PLC, Albion Technology & General VCT PLC, Crown Place VCT PLC and Kings Arms Yard VCT PLC. Investments spread across all six portfolios will receive a monthly dividend with a yield of approximately 5.5 per cent, or 7.8 per cent after tax relief, a potentially attractive income source in the current low interest rate environment.
Investors who apply before 2 pm on 28 February for the first GBP10 million of shares will be entitled to an “early bird” reduction in the offer costs. Existing Albion investors will receive a 1.0 per cent reduction and new investors will receive a 0.5 per cent reduction.
The offers provide exposure to balanced portfolios with a combined value of around GBP400 million, diversified across approximately 70 businesses. Their launch reflects Albion’s confidence in an exciting pipeline of investment opportunities in sectors with long-term growth potential, including digital healthcare, automation, digital security and data analytics.
A strong investment programme has seen the VCTs invest GBP31m in 21 high growth businesses in the year to 30 September. Over the five years to 30 September the Albion VCTs returned an average of 7.8 per cent pa excluding tax relief.
Recent investments include technology companies such as Koru Kids, an online marketplace for nannies, Phrasee, a company using AI to generate optimised marketing copy, and Locum’s Nest, an app which is revolutionising the way NHS trusts manage locum doctors. The Albion VCTs also celebrated the high profile exit of Grapeshot, a provider of contextualised advertising solutions, which was sold to Oracle in April 2018 and generated a return of approximately 10x on an investment of GBP2.9m.
Will Fraser-Allen, deputy managing partner at Albion Capital, says: “VCTs are attracting sustained investor interest buoyed by a supportive climate for patient capital investing. The Government has given its considerable backing to UK entrepreneurs driving high growth businesses, from measures announced in the Patient Capital Review to a more recent drive to encourage pension money into scale-up businesses.”
“Against this backdrop we see an encouraging number of opportunities for VCTs, in particular in high innovation areas such as B2B software and technology enabled services, including digital health. This, combined with a need for real income and capital growth, is likely to herald another healthy year for VCT fundraising in 2019.”
The offers opened on 7 January 2019 and are expected to close no later than 2 pm on 30 September 2019 unless capacity is met sooner.