Downing Four VCT is launching two new offers, looking to raise £30m between them, as renewed demand in the sector is led by increasing restrictions around pension contributions, the firm said.
It is the first time Downing will accept monthly subscriptions into its Venture Capital Trust (VCT) by standing order.
The firm said its two new offers would pursue ‘evergreen' rather than ‘planned exit' strategies. Evergreen VCTs have no fixed life and investors looking to sell their shares often effectively pay a penalty on exit as they sell shares at a discount to net asset value of between 5% and 20%.
Downing Four, however, intends to buy back shares at a nil discount to its latest net asset value. This gives shareholders the opportunity to exit without a penalty at any time, the firm pointed out.
Downing CEO Tony McGing said: "The limitations to annual and lifetime pension contributions mean VCTs can offer an attractive supplement to retirement planning because they provide upfront income tax relief, tax-free dividend payments and an eventual 100% tax-free exit.
"Monthly contributions into Downing Four will benefit people who want to use any spare income arising from reductions they have had to make to pension contributions."
He added: "The new generalist share class will run in tandem with a healthcare share class. We have partnered with BioScience Managers and will offer VCT investors the opportunity to gain exposure to this specialist sector through a team of sector experts with a good track record."
Both the healthcare and generalist share classes will target dividends of more than 4% a year from the fourth year onwards.
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