Venture capital investor Albion Ventures has launched the Albion VCTs Top Up Offers which are seeking to raise up to GBP25.5 million across its six venture capital trusts (VCTs).
The Offers are targeting a monthly tax-free income of around 6% (should investors choose to invest equally across all Offers), equivalent to approximately 8.5% on the net cost of investment after up-front tax relief at 30%. Investors in the Offers also have the option to boost their capital growth by participating in the dividend reinvestment scheme (“DRIS”), under which dividends are reinvested in the form of new shares in the Albion VCTs.
The Offers will provide investors with immediate exposure to six mature Albion VCTs, comprising a £240 million diversified portfolio of around 60 businesses. These range from stable asset-backed businesses to growth and technology companies.
Since the business was founded in 1996, Albion VCTs have paid out dividends to shareholders every year, totalling in excess of GBP146 million.
Patrick Reeve, Managing Partner at Albion Ventures, says: “Our VCTs have a strong track record of delivering strong returns and tax relief to investors. We have seen solid growth within our portfolio this year and are expecting continued demand for our Offers as investors look to take advantage of a reliable long-term steady income stream with the prospect of capital growth.
“With this year’s momentous pension reform announcement, VCT will become increasingly popular as an additional form of pension supplement post-retirement as well as to young professionals who regard it as a long term savings plan. Our range of VCTs provide diversification across a broad portfolio of SMEs.
“The strengthening of the UK economy continues to provide excellent opportunities and we look forward to extending these to both new and existing investors.”
Richard Troue, Head of Investment Analysis at Hargreaves Lansdown, says: “It’s an exciting time for the VCT industry. Attractive yields and an encouraging spell of performance have drawn investors in. Low interest rates and restrictions on pension contributions are likely to see VCTs remain popular this year. I expect the focus to remain on top-ups into established portfolios run by managers with long track records.
“Diversification and regular dividends are the main attractions of the Albion VCTs. An investment across all six provides exposure to over 60 unquoted businesses and has the potential to provide monthly dividends. The team running the VCTs is experienced and well-resourced and I like their hands-on approach. This is a truly generalist VCT offer and it could be held as a core part of a well-diversified VCT portfolio.”
The Offers opened on 17 November 2014 and are expected to close no later than 30 September 2015 (unless fully subscribed by an earlier date or previously closed).
