By Robert Stock and Pascal Dowling Aberdeen Asset Managers is to launch two separate VCTs in Januar...
By Robert Stock and Pascal Dowling
Aberdeen Asset Managers is to launch two separate VCTs in January which will be close mirrors of each other allowing the fund manager to enter larger venture capital deals.
The management of the Aberdeen Growth VCT I and VCT II will be split with around 40% of assets being invested in Aim companies by William Hemmings and Mark Daniels from Aberdeen's UK team.
Unquoted companies will be managed by the Aberdeen Murray Johnstone Private Equity team under John Simpson based in Glasgow which manages around £180m in assets.
Assets invested in the trusts must by law be invested in the first three years of a VCTs' life.
During that period uninvested cash will be held within the Aberdeen Emerging Companies Fund managed by Chris Fishwick and William Hemmings.
Gary Marshall, sales and marketing director at Aberdeen, said: "This means that you are going to have full exposure to the market during this time. Holding money in gilts is fine from the point of view of safety but it is quite a long time to be out of the market."
The offer period on the two VCTs will open on 22 January and close on 4 April. Shares will be issued on 5 April and 6 April to enable investors to invest £200,000 in the trusts instead of the one-year allowance of £100,000.
Marshall said this will enable investors to double the tax relief available to them through the offering.
Investments will be split at around 40% in Aim stocks and 60% in unquoted companies.
IFA commission on the VCTs is 3% and initial charges are 5%.
The annual management fee is 1.5% for the first year, 2% for the second year and 2.5% for subsequent years. There will be a vote of continuance after 10 years.
The target for the two trusts is to raise around £50m of assets between them. However, this will be capped at a combined £75m if demand is high.
Marshall said: "We are going to do them in parallel and that gives us a bit more flexibility of deal flow. VCTs are limited to investing no more than £1m in any one company. This will allow us to double up."
He said that there was flexibility to do even bigger deals, as Aberdeen Murray Johnstone Private Equity had a number of other VCTs still actively seeking deals.
At the same time, Friends Ivory & Sime has announced its plans to launch a third Baronsmead venture capital trust. The trust, known as Baronsmead VCT3, will be launched on 15 January and is expected to raise £30m.
The portfolio will be widely diversified, investing in higher risk early stage companies with a technology bias in addition to larger companies. Larger companies are defined as those with a pre-tax profit in excess of £1m and a turnover of over £5m.
David Thorp, fund manager of Baronsmead VCT3, said a typical investment of around £3m is made in companies of this size.
Thorp said his approach to running the trust would be active rather than aggressive. He said: "One aspect of the portfolio will be concentrated on the technology, media and telecoms sector as well as life sciences.
"Another focus will be on consumer markets such as branding. "The final facet of our investment will be a focus on business services, such as outsourcing."
The initial charge is 5%, including 3% for IFA commission. There is an annual management fee of 2% on the trust.
Due to leave 31 May
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