Specialist private equity investor Calculus Capital Ltd is seeking to raise up to GBP8 million through a new D share class offer for the Calculus VCT.
Proceeds from the fundraising will be used to follow Calculus Capital’s proven strategy of investing in well-established smaller companies with capable and experienced management teams, spread across a range of business sectors.
This approach has contributed to the Calculus VCT delivering superior performance and dividend payments to investors since launch in March 2010.
Calculus VCT has to date paid cumulative dividends of 48.25p per Ordinary Share and 18p per C Share. In addition, the Board has declared a further special dividend of 21.8p per Ordinary Share, which will result in the Company exceeding the target return of at least 70p per Ordinary Share by 14 December 2015. Its objective continues to be to provide an interim return of 70p per C Share by 14 March 2017.
Early bird and loyalty discounts are available to investors in the D share offer. Applications received by 18 December 2015 will benefit from a 1.0% early application discount, or 0.5% where applications are received by 29 January 2016. Additionally, existing shareholders who apply will receive a 0.5% loyalty discount.
Calculus VCT Chairman Michael O’Higgins says: “The case for investing in Venture Capital investments remains as strong as it was at the launch of the Company, and we think that the current economic climate presents investors with an excellent opportunity. Bank lending is constrained, which means even high quality, well-managed smaller companies are finding it difficult to raise funds for expansion. There is continued governmental support of VCTs and Enterprise Investment Schemes as a strategy for growth for small private companies, arguably the backbone of the UK economy.”
Calculus Capital does not believe that its successful investment strategy will be significantly affected by the changes to VCT rules announced in the summer budget and currently awaiting Royal Assent.
These include a reduction in the amount of VCT support a qualifying company can receive over its lifetime to GBP12m (GBP20m for ‘knowledge intensive’ companies), a stipulation that VCT money can no longer be used to fund management buyouts (MBOs) or business acquisitions and a seven year age limit on investee companies (subject to certain exemptions).
O’Higgins adds: “Fewer VCT managers are actively raising funds at the moment and much of the VCT industry is effectively holding its breath and considering its next steps as a result of the Budget announcement.
“But we do not feel the changes will constrain our approach. Calculus VCT typically targets companies that require a maximum of GBP5m of investment, so we do not believe the GBP12m limit will have much impact on our investment strategy. While Calculus VCT invests in well-established businesses, there are important exemptions from the age restriction and our strategy is based on providing financing for real growth companies, so, likewise, the business acquisitions and age restriction should not be a hindrance to what we do.”