NVCT, Northern 2 and 3 launch £50m joint offer

Alice Murray
08 August 2013

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Northern Venture Trust, Northern 2 VCT and Northern 3 VCT, the venture capital trusts (VCT) managed by NVM Private Equity, have launched joint offers for subscription to raise a total of £50m.

The funds offer an 8.8% per annum tax-free dividend yield and 30% income tax relief is available on subscriptions. The funds will be invested across later-stage private UK companies.

As of June 30, 2012, the three VCTs had combined net assets of £185m. The funds have a policy of buying back their shares in the market at a 10% discount to the latest published net asset value.

The closing dates for the offers are in early and late April 2014, depending on which financial year the investor intends to claim tax relief for. The minimum investment is £6,000 and the maximum is £200,000. The annual management fee comes in at 2.06% of assets and annual expenses are capped at 2.9% per year of each fund's net assets.

VCT buyback activity has recently come under scrutiny by UK authorities as a process dubbed "cascading" has allowed investors to claim tax relief every year, rather than just once throughout the investment period as originally intended when the scheme was introduced. The issue is now under technical consultation, whereby investors can comment on the issue and propose ways in which to takle it.