Review: Maven VCTs

So far this tax year Wealth Club clients have invested more money into the Maven VCTs – Maven Income & Growth (Maven VCT 1) and Maven Income & Growth 5 (Maven VCT 5) – than into any other offer.

This will not come as a surprise to seasoned VCT investors. Maven is one of the longest established and most highly regarded managers. The current offer could give the “best of both worlds”, as fund manager Bill Nixon put it. The first is access to a diversified portfolio of investments in mature, later-stage companies made prior to the 2015 VCT rules change. The second is the world of younger, earlier-stage businesses with high growth potential but also higher risk.

Maven has been one of the most active managers in recent years. Since April 2016 it has completed 21 new qualifying investments.

It targets entrepreneurial businesses led by proven management teams which it believes offer strong growth prospects.

A history of exits and dividends

Since 2015 Maven has completed 12 profitable realisations for VCT investors, delivering returns of up to 7.1x cost.

One of the most notable, in October 2017, was Crawford Scientific, a leading supplier of chromatography products and analytical services. The sale realised a return for Maven clients of 4.5x the initial investment in just over three years. Past performance is not a guide to the future.

These exits have helped support dividend payments to date. In the past five years, the average annual dividend paid out was 7.9p for Maven VCT 1 and 3.2p for Maven VCT 5. Dividends are not guaranteed. Remember, capital is at risk.

Performance

Source: Maven. Past performance is not a guide to the future. Dividends are variable and not guaranteed. Chart shows Net Asset Value and cumulative dividends paid to 28 Feb (MIG1) and 30 Nov (excluding 2018, MIG5) each year, pence per share.

“Different beasts” – same strategy

Although the two VCTs now share the same investment strategy, historically, they are “very different beasts”, as Mr Nixon explains.

Maven VCT 1 has always had a traditional generalist focus on private company investment. Maven VCT 5, however, was an AIM-focused VCT until Maven was appointed to replace the previous manager. Since then the VCT has gradually increased the number of unquoted investments and reduced AIM exposure. Now it offers a blended portfolio of private equity assets and AIM investments.

Both VCTs also typically co-invest in new transactions alongside the other three Maven VCTs. This enables them to invest more, collectively, than a single VCT and effectively spread the investment.

A differentiator for Maven is its regional focus: its local teams can see opportunities London-centric VCTs might miss.

What to consider next

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