Tim Levett, chairman of NVM Private Equity

Northern Venture Trust and Northern 2 VCT launch linked top-up share issue

Venture capital trusts managed by NVM Private Equity have launched a linked top-up offer for subscription to raise up to GBP4m for each fund.

Northern Venture Trust was launched 17 years ago and has net assets of GBP63m. Northern 2 VCT was established 13 years ago and has net assets of GBP57m. Of over 100 VCT share classifications listed on the London Stock Exchange, both funds rank in the top 12 in terms of total return since inception.

Tim Levett (pictured), chairman of NVM Private Equity, says: “Northern Venture Trust and Northern 2 VCT are both established funds, each holding 40 investments in a range of different sectors, most of which are common to both funds. This means that investors will immediately gain exposure to a mature and diverse portfolio of smaller UK companies with high growth potential. Each fund has paid annual dividends at or above its current target level for the last eight years - this represents a tax-free yield of over nine per cent per year on the issue price, equivalent to gross yields of over 12.5 per cent for 40 per cent taxpayers and over 13.5 per cent for 45 per cent taxpayers.”

Northern Venture Trust and Northern 2 VCT have each established a targeted minimum level of annual dividend (6.0p and 5.5p per share respectively), with the objective of enabling investors to benefit from a strong and consistent flow of tax-free income whilst maintaining the funds’ net asset value per share in the medium term.

NVM Private Equity has over 28 years’ experience of investing in unquoted UK businesses and currently has over GBP200m under management. The new top-up offer will provide additional funds for investment into small-to-medium sized businesses with high growth potential. The 11 strong NVM investment team has completed 13 deals across the portfolio in the last 13 months, including new investments, strategic portfolio acquisitions and realisations.

Over GBP25m of new investment was injected into growing UK businesses: Haystack Dryers, Intuitive, Lineup Systems, Silverwing and Volumatic. Meanwhile CloserStill and Paladin Group were successfully sold in the same period – delivering returns of 3.2 and 2.3 times money on NVM’s original investments.

In order to provide existing shareholders with the opportunity to realise value, Northern Venture Trust and Northern 2 VCT have also announced that in the future they will buy back their shares in the market at a 10 per cent discount to the latest published net asset value, subject to certain conditions.

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