Quester Capital Management launches fifth VCT

10 December 2001

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Quester Capital Management Ltd (QCML) have published the prospectus for Quester VCT 5. The VCT is inviting offers for subscription of 26,500,000 ordinary shares of 1p each at 100p per share payable in full on application, thereby raising Â£26.5m before expenses and Â£25.2m after expenses.

The offer for subscription was launched on 4 Dec 01 and it will close on 3 April 2002. The VCT has no set, pre-determined lifespan, rather it is envisaged that the company will continue in existence until 2011 when a special resolution will be proposed to wind-up the company. If the resolution is not passed then the company will continue as a VCT subject to being wound up by special resolution at five yearly intervals thereafter. The VCT has a minimum subscription level of Â£3,000 and the Board of the VCT will make a contribution of Â£315,000. The VCT has a floor of Â£700,000 and a cap of Â£26.5m, which is the maximum number of shares that will be in existence.

QCML will charge an annual management fee (calculated and payable quarterly) of 1.5% of the net assets of the Company during the first financial year, 2% of the net assets in the second year and 2.5% thereafter. Other fees include a Â£12,500 (plus VAT if any) for the provision of secretarial and other services. QCML will be entitled to keep all transaction fess, directorsâ€™ fees, monitoring fees and all other fees in connection with the management of the VCTâ€™s investment portfolio. QCML will also be entitled to the reimbursement of expenses incurred on behalf of the VCT. Quester Limited (the parent company of QCML) and a number of individuals are entitled to a performance incentive (the redemption premium) of 20% of the net asset value of the company subject to the net asset value and gross distributions from the VCT exceeding a target level. In the years to 2007 the target is 160p, increasing by 2p on the publication of each of the interim statements and audited accounts rising to 186p on the expiry of the period in 2013. In addition to achieving and exceeding that target, dividends of an aggregate of at least 60p per ordinary share must have been declared by the Company before an entitlement to the redemption premium can arise. Where the target is achieved, but not exceeded, then Quester Limited will only be entitled to 3% on a net asset value basis.

The VCT reports that 85% of the fund will initially be made available for investment in unquoted companies and the remaining 15% will be held in fixed-interest investments, equities and convertible securities quoted on a recognised stock exchange in reserve for second-round financing or investment in additional quoted securities. The VCT has the authority to invest across a wide variety of stages, situations and sectors.