Review: Pembroke VCT

They say some things run in the blood. This is certainly the case for retail and Andrew Wolfson, the Chief Investment Officer and Managing Director of the Pembroke VCT. His ancestors were instrumental in turning Great Universal Stores into a retail giant. His brother is the long-serving Chief Executive of Next. 

Perhaps surprisingly, Andrew didn’t join the family businesses. Instead, he cut his teeth in starting and building up businesses of his own. Since the mid-Eighties, he’s been working with serial entrepreneur Peter Dubens, whose first venture was selling T-shirts that changed colour when exposed to heat. Five years later, the company was sold for £8 million to Coats Viyella.

A number of successful ventures followed, eventually leading to the creation of Oakley Capital and, in 2013, the launch of the Pembroke VCT. 

A distinctive VCT

Pembroke’s strategy is significantly different from any other current VCT offering. 

Firstly, it invests – although not exclusively – in the hospitality and retail sectors, which tend to be neglected by most other VCTs. So it could add diversification to an investor’s established VCT portfolio. 

Secondly, Andrew Wolfson and the team’s experience means they know first-hand what it takes to build a successful business. As a result, they tend to take a much more active role in their investee companies than some other VCT managers.

We have met Andrew Wolfson several times and we were always impressed. He runs a £56 million portfolio of 29 companies. Yet he can tell you from the top of his head how many shades of nude tights portfolio company Heist Studios (a hosiery designer and retailer) sells. He can talk just as easily about the rate of sale of Plenish nutmilks across Sainsbury’s, Asda, Waitrose and Marks & Spencer. 

And he seems to have a similar depth of knowledge of all the investee companies we have discussed with him. 

Pembroke VCT – Heist StudiosA portfolio of promising companies

The VCT hasn’t had any significant exits yet, but the portfolio includes a number of companies that look promising, although there are no guarantees. 

The best-known example is probably Five Guys, the US burger restaurant chain. Pembroke became involved even before Five Guys had its first UK site and provided growth capital to fund the UK roll-out. 

The chain now comprises over 90 restaurants across the UK and according to the latest valuation Pembroke’s investment shows an unrealised return multiple of 2.2x. Past performance is not a guide to the future.

Performance

Source:Pembroke. Past performance is not a guide to the future. Dividends are not guaranteed. Chart shows Net Asset Value and cumulative dividends paid to 31 March each year, pence per share. 5 year figures not available as the B share class was first issued in 2015.

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.

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