Committed Capital’s new venture capital trust is targeting private equity investment into promising high growth, smaller UK companies and take advantage of an exceptional market opportunity, significant tax benefits and the proven track record of Committed Capital’s team of investment professionals.
The fund is seeking to raise between GBP3 million and GBP25 million and will focus on investing in companies where an exit within three or four years is reasonably foreseeable. The fund will close on 31 May 2011. There will be a discount for investors who commit the first GBP3 million.
The Directors of Committed Capital VCT believe that there is an exceptional opportunity to generate strong investment returns and that the UK venture capital market today, is perhaps the most attractive for a generation, with pent up demand for investment, particularly from small companies which still find it difficult to raise funding, attractive valuations and the potential to benefit as the economy moves out of recession.
Most private investors cannot build a diversified portfolio of small fast growing companies directly so Committed Capital VCT offers the opportunity to achieve excellent investment returns at the same time as supporting the growth of UK businesses. The limited equity and bank funding available to smaller UK companies in the current economic environment will enhance the number of excellent investment opportunities and enable the investment team to negotiate better entry prices and optimise returns.
The timing of the launch means Committed Capital VCT is poised to benefit as the UK emerges from recession and company profitability and valuations are strengthened.
Committed Capital VCT will be an independent, UK, closed ended investment company to be listed on the London Stock Exchange.
VCT’s are Government approved and offer significant tax benefits. Investors may invest between GBP3,000 and GBP200,000 each tax year. The subscription period will close in May 2011 straddling the 2 tax years 2010/11 and 2011/12.
Investors will receive income tax relief of 30% of the amount invested up to GBP200,000, tax free dividends and no capital gains tax on the disposal of shares in the VCT making this VCT investment a very attractive alternative to pension top ups.
It is anticipated that there will be potential to pay an attractive running yield and to structure the investment with a proportion of secured loan notes or preference shares to reduce the risk profile of individual portfolio investments.
Committed Capital VCT will be managed by Committed Capital Financial Services Limited, an FSA authorised subsidiary of Committed Capital.
The strategy is to achieve long term capital appreciation and to deliver a significant tax free stream of income to shareholders by investing in a diversified portfolio of promising UK-based companies. These companies have long suffered from the “equity gap” but it has become even harder for them to raise finance due to the current banking and financing environment.
The fund will focus primarily on four sectors where Committed Capital have exceptional and proven investment experience and have achieved top quartile returns over 17 years. These are Technology Media and Telecoms (TMT) Retail and Leisure, Manufacturing and Business Services.
Typically the investment approach of Committed Capital will be to invest between GBP500,000 and £GBPmillion in 20 to 30 investments focussed on the following criteria:
· Exceptional and proven management team
· Sustainable competitive advantage
· Revenue generating and predominantly profitable
· Dynamic and growing underlying market
· Significant growth potential and scalability
· Attractive entry price
· Strong cash flow and ability to pay running yield
· Clear exit route
The Board of Committed Capital VCT will comprise Peter Dicks, as Chairman, who was the founder of Abingworth plc, an international life sciences and healthcare investment group with USD1.25 billion under management. He was previously Chairman of the Foresight Group of VCTs and Chairman of a number of other quoted and unquoted companies such as Sportingbet plc, Daniel Stewart Securities, GEI Group Ltd and Waterline Group plc. He is also Deputy Chairman of Mears Group plc.
Tom Sooke, Non Executive Director is an experienced venture capitalist who has served on a number of VCT and private equity boards. He is Senior Independent Director on the board of two Matrix Income and Growth VCTs and also co founded the British Venture Capital Association. He was previously a corporate finance partner at Deloitte.
Steven Harris (pictured) of Committed Capital will also sit on the Board. He has had over 20 years experience in mergers and acquisitions and private equity. He is Chief Executive Officer of Committed Capital and the former Head of M&A at PA Consulting and a former corporate financier as Societe Generale and HSBC. Importantly he was previously Investment Director at antfactory, a $600million early stage tech investor.
Advisers to the fund will be Goldman Sachs International (fixed interest securities adviser), Maven Capital Partners (fund administration and Company Secretary), City Partnership (Registrar and receiving agent), Matrix Corporate Capital (Brokers)and Marechale Capital as promoters of the share Offer.
The fund will be managed by an experienced team with a consistently strong track record. Indeed this team has achieved an IRR of 23.9% per annum over 17 years across more than 30 investments . It has a strong pipeline of suitable transactions.
The investment team will comprise:
Neil MacFadyen, is a Chartered Accountant with 20 years’ experience of private equity investment, focusing on growth capital and buyouts. He was a former Investment Director at Aberdeen Asset Managers Growth Capital and Murray Johnstone and joined Committed Capital as Investment Director in 2009.
Steven Harris, CEO of Committed Capital (details above)
Andrew Bloxam, who has 10 years experience in fund management and corporate finance with JP Morgan’s technology research team and helped establish Strata Partners, a technology corporate advisory boutique. He joined Committed Capital in 2007.
Rubel Quader, who has over 10 years experience in strategy consulting and corporate finance with Roland Berger, Oliver Wyman and Co and Punch Taverns.
The Committed Capital investment team also have support from their advisory board of well known, exceptionally experienced people within the finance and investment communities. They can draw upon the experiences and wisdom of:
Rubert Hambro, the former Chairman of Hambros Bank and co-founder of JO Hambro, a Mergers and Acquisitions and Investment Management business. Rupert has a particular interest in promising growth companies and frequently invests on a personal basis.
Tim Steel, the former Vice Chairman of Cazenove Capital and Managing Director of their fund management division.
Mark Blandford, founder, former Chairman and CEO of Sportingbet plc and Venture Capital investor through Valhalla Investments.
