Review: Maven Income & Growth VCTs
Archived article: please remember tax and investment rules and circumstances can change over time. This article reflects our views at the time of publication.
Maven Capital Partners is a highly regarded fund manager, known for its strong regional presence. With ten offices across the UK, Maven manages four VCTs with combined net assets of £205.7million (December 2020), and also manages funds for the British Business Bank.
Maven built its reputation transacting a range of SME investments, including management buyouts and growth capital investments for non-VCT client funds. This, combined with the recruitment of additional senior executives with early-stage and tech backgrounds, helped Maven transition to the growth focus required by the VCT rule changes in 2015.
Today, Maven is one of the UK’s most active backers of early-stage growth businesses – it has made 44 new private company investments across its VCTs since January 2016. Companies in the new growth capital portfolio have shown average revenue growth of 63.9% in their most recent financial years. Two of Maven’s VCTs are currently raising funds: Maven Income and Growth VCT (Maven VCT 1) and Maven Income and Growth VCT 5 (Maven VCT 5).
The current offer could give investors access to a portfolio blend of more mature management buyout investments, early-stage high-growth private companies, AIM-quoted companies and cash or cash equivalents.
Maven’s investment team – headed by Managing Partner Bill Nixon – targets established entrepreneurial businesses, led by proven management teams, which Maven believes have significant growth prospects.
In total, Maven has over £660 million under management or available to invest across all of its client funds. Maven and its senior management team have themselves invested over £4.5 million in Maven VCTs, including in the current offers, aligning their interests with those of investors.
Watch a video interview with Bill Nixon of Maven Capital Partners:
Maven targets companies available at attractive entry pricing, which it believes have significant potential to achieve medium to long-term capital appreciation (not guaranteed). Currently, Maven VCT 1 has a portfolio of 86 companies and Maven VCT 5 has 106.
AIM-quoted Ideagen, as an example, is the largest holding in Maven VCT 5. It is one of the world’s fastest-growing software companies, with multinational clients such as Heineken. It is currently valued at £4.44 million at a cost of £162,000 (31 May 2020). MirrorWeb, as a private company example, is a holding in both Maven VCT 1 and Maven VCT 5 (see box).
Resilience to Covid-19 impact
Maven favours counter-cyclical and more defensive sectors, such as software, cyber security, data analytics, training and healthcare, targeting companies with strong recurring or contractual revenues. Conversely, the VCTs have relatively little direct exposure to retail, leisure, hospitality and entertainment – the sectors worst affected by lockdown measures and the economic impact of the pandemic.
Maven undertook a full review of its portfolio in March 2020 and adjusted the valuation for specific companies in more consumer-facing sectors. In common with much of the industry, this resulted in a reduction in NAV per share for both VCTs. However, both have since seen some recovery in NAV, and the majority of the portfolio has continued to trade satisfactorily, in Maven’s view.
MirrorWeb – recent investment
A few years back, who would have thought you’d be able to have a video call with your bank manager? Watch investment commentary in live streaming on Facebook? Follow up-to-the-minute news on Twitter? It can be extremely convenient for users – but a headache for organisations. They need to keep accurate, time-specific records of all communications: webpages, tweets, Facebook posts, etc. – it is a mammoth task. Get it wrong and the consequences could be very serious, especially for firms in regulated markets.
MirrorWeb could provide a solution. Its platform automatically captures accurate and legally admissible records of a firm's web and social content and stores it in a searchable archive. It is already used by financial services firms from Tesco Bank to Zurich Insurance Group and Liontrust Asset Management. Beyond financial services, MirrorWeb's platform could be of use to any organisation with large amounts of information. For instance, MirrorWeb manages the Bank of England archives dating back to 2004 and helped the UK National Archives move 120 terabytes of data – 20 years of the UK government’s digital history – to the cloud.
Maven originally invested in MirrorWeb in 2018 through the NPIF Maven Equity Finance fund, part of the £400 million Northern Powerhouse Investment Fund (NPIF), and subsequently invested £2 million through the Maven VCTs in October 2020.
Performance and dividends
Over the ten years to 31 December 2020, Maven VCT 1 and Maven VCT 5 have paid total dividends of 60.81p and 22.95p per share, and generated NAV total returns of 92.5% and 77.3% respectively. Note, past performance is not a guide to the future.
The Maven VCTs do not have a specific dividend target, but have a history of paying regular dividends. The VCT rule changes in 2015 (requiring VCTs to make new growth capital investments into early-stage companies) could make the frequency and level of dividends less predictable, as they may be more closely linked to realisations, but both VCTs look to pay dividends whenever possible as the Boards consider this a tax-efficient means of returning value to shareholders. Dividends are not guaranteed.
Since January 2016 Maven has achieved 14 profitable exits from companies in which either or both Maven VCT 1 and Maven VCT 5 were invested. These realisations have generated total return multiples of up to 5x cost and an average total return multiple of 2.9x cost.
A recent example is innovative tech business Symphonic Software (main picture), an early 2019 investment. In November 2020, Maven announced a 2.9x realisation (90% IRR) after a holding period of under two years.
Investing in VCTs is high risk; there have been some failures as well as successes. Past performance is not a guide to the future.
What to consider next
Visit the Maven VCTs share offer page to download the provider documents and read more, including risks and charges. You can 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.
Maven VCTs – apply online
Read our full review, download the provider documents and see the offer details, including risks and charges. You can apply online.Read more and apply online