Electra Kingsway to raise £25m despite market conditions
Electra Partners is to launch the Electra Kingsway VCT in early October and is looking to raise £25m, promoted by Downing Corporate Finance.
It will be managed by the Electra Investment Trust team, which invests in small to medium-sized companies. For the initial three-year period, the trust will have 15% invested in the Electra Active Management Oeic and 15% in the Electra Investment Trust. The balance will be invested in fixed income securities.
The VCT is a generalist vehicle and will have 80% invested in unquoted and Aim stocks, said Tony McGing, director of Downing Corporate Finance.
He added: 'This year will be tougher for VCTs as there are not so many capital gains in the market, but we are confident we will raise the money. Electra Partners specialise in unquoted companies and have a good reputation.'
Electra Investment Trust invests in venture and development capital opportunities and is managed by Hugh Mumford. The trust has some £857.2m in assets and, as of 6 September, was on a discount to NAV of 23%.
At the same time, Aberdeen Asset Management is to launch the Aberdeen Growth Opportunities VCT on 21 September 2001 and is looking to raise £30m.
Bill Nixon, a director of Aberdeen Asset Management's private equity division, will manage the portfolio.
He said: 'The trust will focus on UK growth across a wide spectrum of investment stages, but will concentrate on later stage opportunities such as management buy-outs and development capital.'
During the three-year period where the VCT does not have to be fully invested in qualifying companies, Nixon will invest in a range of Aberdeen retail products.
He said that around 85% will be in retail products while the balance will be in cash. He added: 'Initially, this will be skewed towards fixed interest and sterling bonds. Once the markets recover then we will move this towards equity retail Aberdeen funds.'
Nixon has more than 10 years private equity experience and joined Aberdeen Asset Management in 1999 with his team from Clydesdale Bank Equity, where he was a director of private equity.
Aberdeen also launched the Aberdeen Growth VCT 1 and 2, which just closed for investment at the end of August. The funds have raised £23.4m out of a sought £50m.
Aberdeen Growth will invest 60% in unquoted stocks and 40% in Aim. Investments range between £250,000 to £2m between the two VCTs and there is a bias towards established companies with profitable track record with some early stage investments.
Jason Hollands, deputy managing director at Best Invest, said: 'We doubt if any other VCT manager has access to such extensive resources, but this has proved to be of little benefit so far to investors in the Murray Johnstone VCTs. The revised investment strategy and access to Aberdeen's expertise should lead to an improved performance from Aberdeen Growth but we see little reason to prefer it to other trusts with demonstrably better records.'
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