Review: Hargreave Hale AIM VCT
Archived article: please remember tax and investment rules and circumstances can change over time. This article reflects our views at the time of publication.
Whatever your views on AIM, you will probably agree it is a market of extremes.
In the 20 years since AIM was created in 1995, around 3,000 companies have listed. 72% of them lost investors money. At the other extreme, 39 companies produced returns in excess of 1,000%. It’s undeniable there are opportunities, but only if you know where to find them.
This is certainly the view of Oliver Bedford, who co-manages the Hargreave Hale AIM VCT alongside small-cap veteran Giles Hargreave, of Marlborough Special Situations fame.
Mr Bedford believes AIM is a large, often overlooked and inefficient market – the ideal playing field for active investors with the right resources.
How to separate the wheat from the chaff?
Hargreave Hale has one of the UK’s largest investment teams focused on small caps.
It believes the characteristics that define a successful company are the same whether it is listed on AIM, on the main market or it is a private company. What matters is the quality of the management team, its intellectual property, the firm’s pricing power and growth in its own market.
The team meets with around 1,500 companies a year. Hargreave Hale’s view is that good stocks are hard to find and so they should be held for as long as possible, to allow the portfolio to develop a core collection of maturing companies.
Whilst waiting to deploy funds, the VCT invests in the Marlborough Special Situations fund rather than holding cash.
This maintains exposure to UK smaller companies.
Mr Bedford plans to increase exposure to ecommerce, in particular companies that promote consumer choice and convenience whilst disrupting established industries.
An example is Gousto, one of the first subscription-based meal-kit providers. It delivers fresh – usually organic – ingredients straight to someone’s door, alongside easy-to-follow recipes. The company started in 2012. Today it delivers over one million meals monthly and its revenues doubled in 2017. It aims to serve 400 million nutritious home-cooked meals by 2025. Hargreave Hale AIM VCT invested £2.5 million in July 2017. The latest valuation of the holding is £3 million, making the company the third largest investment (March 2018). Past performance is not a guide to the future.
Risks – important
This, like all investments available through Wealth Club, is only for experienced investors happy to make their own investment decisions without advice.
VCTs are high-risk so should only form part of a balanced portfolio and you should not invest money you cannot afford to lose. They also tend to be illiquid and hard to sell and value. Before you invest, please carefully read the Risks and Commitments and the offer documents to ensure you fully understand the risks.
Tax rules can change and benefits depend on circumstances.
VCTs can now only invest new money in growth capital deals. Management buyouts/replacement capital deals and investments in mature companies are no longer permitted. This results in considerably higher risks.
What to consider next
Please visit the offer page using the link below to download the provider documents, read more (including risks and charges) and apply online.
Wealth Club aims to make it easier for experienced investors to find information on – and apply for – tax-efficient investments. You should base your investment decision on the provider's documents and ensure you have read and fully understand them before investing. This review is a marketing communication. It is not advice or a personal or research recommendation to buy the investment mentioned. It does not satisfy legal requirements promoting investment research independence and is thus not subject to prohibitions on dealing ahead of its dissemination.
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