Analysis

Mobeus, NVM and Baronsmead discuss robust VCT market - video

Source: UK unquote | 16 Apr 2014 | screening image

Mark Wignall from Mobeus Equity Partners, Andrew Garside from Baronsmead and Tim Levett from NVM Private Equity discuss the latest VCT trends with Alice Murray

The VCT industry raised an impressive £435.7m in the 2013/14 tax year, according to the latest figures from the Association of Investment Companies. This represents an 8% uptick on the amount raised the previous year, and is the third highest level ever of annual funds raised.

Of this impressive sum, around £120m was raised by just three VCT managers: Mobeus Equity Partners, NVM Private Equity and Baronsmead (managed by Isis Equity Partners).

In the video above, the heads of these houses - Mark Wignall of Mobeus, Tim Levett of NVM and Andrew Garside of Baronsmead - discuss why fundraising has been so strong for these funds, and how this fresh chunk of capital will impact competition levels in the UK lower mid-market.

According to Levett, investors were attracted to VCT funds because of strong past performance, which generated typical dividend yields of around 7-8%, awarded on a tax-free basis. Levett also points out that all three VCT managers benefit from a loyal existing investor base, and around two thirds of NVM's latest VCT offering came from existing investors.

Wignall points out that VCTs are run in a very transparent manner, which is presented clearly to investors, adding another attractive characteristic to these types of funds.

Garside believes that investors have also been drawn to VCTs because of their consistently strong performance over a number of years - that investors are seeking investment vehicles that have performed well in the past and are unlikely to throw up any major surprises.

The interview goes on to discuss the HMRC's handling of VCT managers following the removal of Oxford Technology's VCT status last month, and the future of the industry in light of increasing regulation. 

 

unquote" would like to thank Mobeus, NVM and Baronsmead for making this video roundtable possible. 

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