Review: Pembroke VCT

Pembroke VCT originally launched in 2013, with the B shares first raising money in 2014 and subsequently in 2016. This offer seeks to increase the size of that investment portfolio by raising another £15 million with the possibility of a further £10 million. Pembroke’s strategy is to invest in earlier-stage, higher-growth companies.


  • Strong emphasis on capital growth 
  • Portfolio companies include Five Guys and Chilango restaurant chains
  • Focus on four sectors: health and fitness, media and tech, hospitality, apparel and accessories 
  • One of the lowest-cost VCTs
  • Talented management team
  • Minimum investment £3,000

The manager

The manager is Oakley Investment Managers which operates under the umbrella of Oakley Capital Ltd (a company founded by Peter Dubens in 2002). Mr Dubens has been a serial entrepreneur since the 1980s. His specialty is building businesses from the ground up and selling them on. One example of such a business was Tom Aikens restaurants, which it bought out of administration, turned around and sold on. 

There is a core team of six. Andrew Wolfson, a director of Oakley Capital, is the lead on this VCT. Mr Wolfson also manages Peter Dubens’ private investments. 

Target return and strategy

The managers are looking for deals that have potential to achieve 3 times return on money invested. 

A dividend of 2p per share was paid in October 2016 and overall the B share minimum target is dividends of 3 pence per annum (variable and not guaranteed). This VCT has a strong emphasis on capital growth therefore dividends might not be as smoothed as with other more established VCTs. 

The VCT focuses on consumer brands with premium pricing potential. Four sectors are targeted: health and fitness, media and tech, hospitality, apparel and accessories. The manager would like a fairly even split between the sectors although the smallest is likely to be media and technology. 

Mr Wolfson believes the hospitality and health sectors offer the best growth potential. The first can benefit from consumers becoming more adventurous and the latter from them being more health conscious. Within the portfolio currently are companies such as upmarket burger chain Five Guys, the burrito chain Chilango,  Rated People in the technology space and Dilly & Wolf in the health and fitness sector.

These will be proper growth-orientated businesses, with the majority of the investment in ordinary shares. Mr Dubens will personally invest alongside every deal and on the same terms as the VCT. As well as investing, the managers want to add value using their skills and knowledge to help the business grow. Part of adding value is being able to introduce new companies to their existing extensive contact list. 

The team also mitigate risk by investing some smaller amounts in larger deals, with proven backers, which they can access through their existing contacts. The Five Guys burger chain is one example of this. It is backed by Charles Dunstone of Carphone Warehouse fame.

Pembroke B ordinary shares investment portfolio

Pembroke VCT portfolioExit strategy

Although no defined exit strategy is in place, the managers believe many of the businesses they invest in, if successful, will be attractive to larger companies in the same or similar sectors. 


As this VCT generally invests in earlier-stage deals, it is higher risk than many others, which often have a high proportion invested in asset-backed deals. In addition, it is likely returns will be lumpier than many others. Lastly, as it is a much newer VCT, investors might have to wait longer for returns, although there has been an early uplift in NAV already for existing investors.

Please remember capital is at risk. VCTs are high risk investments and are not suitable for everyone. Investors should not invest money they cannot afford to lose. 


There is an initial charge of 5%, before any Wealth Club discount. Total annual running costs are capped at 2%, extremely low for a VCT. In our view this is a positive sign of intent that management intend to grow the VCT. The performance fee is 20% of distributions more than £1 per share, assuming a hurdle rate of 3% simple interest per annum has been met. Whilst the hurdle is relatively low, the fact the investors must essentially receive all their original investment back prior to a performance fee being paid is positive. The manager doesn’t charge deal or monitoring fees, a welcome move in the VCT world. There are other secretarial and administration fees payable, but not to the managers.


Despite being a relatively new entrant to the VCT market, the Oakley team are well worth considering. The focus on early-stage growth investments is what VCTs were always intended for, therefore the 2015 rule changes should have very little impact on them. Oakley might be relatively new to VCTs, but they has been managing money since 2002 and its founder has been a serial entrepreneur since the 1980s. Oakley launched this VCT as the team had such strong deal flow they couldn’t use elsewhere. Unlike most VCTs, which focus on consistent dividends, this one is much more growth orientated with a focus on upmarket consumer brands. It is early days for the B share pot and of course past performance is no guide to the future, but original investors have already seen an increase in NAV.

Read more about Pembroke VCT

This review is not intended to be advice or a personal recommendation to buy the investment mentioned, nor is it a research recommendation. Wealth Club aim to highlight investments we believe have merit, but investors should form their own view on any proposed investment.

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