Baronsmead VCT3 closes on £33m

It has just been announced that the Baronsmead VCT3, which was launched by Friends Ivory & Sime Private Equity on 15 January this year, has now closed, over-subscribed, on £33m, 10% above the original target of £30m. This follows the launch of Baronsmead VCT and Baronsmead VCT2 in 1995 and 1998 respectively. These raised £24m and £43m net proceeds and showed total returns of 81% and 36% respectively at 30 November 2000.

Baronsmead VCT3 is to be managed by the investment team at FISPE, led by David Thorp and Wol Kolade. It is intended that of the total fund pool to be invested, 20% will be in fixed interest securities, with the remaining 80% being in unquoted companies. FISPE makes investments of £20-25m per annum from all three VCTs, with the proceeds from VCT3 expected to fund the development of a portfolio containing approximately 30 companies. The investment size will be between £300,000 and £1m and, adopting FISPE’s research-led sector investment approach, the focus of Baronsmead VCT3 will be on later-stage UK companies in the sectors of technology; media and telecommunications; life sciences and healthcare; and consumer markets and business services. However, co-investment between the three Baronsmead VCTs and the FISPE LP enables larger transactions to be completed compared to most VCTs.

FISPE will generally take a large minority equity stake in investee companies and make two non-executive appointments. Over the past two years FISPE has doubled the size of its investment team to include 14 investment professionals in order to cope with significantly higher dealflow and recent completions. Legal and financial advice was provided by Norton Rose, BDO Stoy Hayward, PKF and Noble & Co.

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