Baronsmead VCT to raise Â£14m new capital

09 September 2002

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Baronsmead VCT has announced its plans to raise an extra Â£14m in Autumn 2002. The vehicle was launched in 1995, and was the first of four VCTs managed by ISIS Capital. An extraordinary general meeting is due to be held on 16 September to discuss the plans. If shareholders express support, a prospectus will be issued in October to coincide with the release of the latest 12 monthly figures on the fund. The offer period will extend from the end of October 2002 to April 2003. David Thorp, chairman of ISIS Capital, expects the peak period for high-net-worth individual interest to occur in February or March.

Investors

The minimum commitment to the fund is expected to be in the order of Â£2,500, with a carry of 20% subject to a hurdle of bank rate plus two. The management fee of the fund is 2%; the overall running cost of the fund todate has been less than 3%.

Investments

The VCT aims to sustain a well-diversified portfolio across a range of sectors and asset classes, including a high proportion of established and profitable companies. At its larger size, Baronsmead VCT will be able to increase the spread of its portfolio to more than 50 companies, and thereby improve share liquidity. While VCTs are limited to individual company investments of less than Â£1m, Baronsmead VCT will co-invest alongside the three other ISIS Capital VCTs as well as ISIS Capital LPs, bringing investments typically to between Â£3 and Â£4m. About 20% of the Â£14m will be saved for follow-on rounds of funding; Thorp comments that a portion of the fund has already been allocated to follow-on investments. Full investment is envisaged in late 2004.

People

The fundraising is being coordinated on behalf of ISIS Capital by chairman David Thorp and Barry Neilson, director of business development.