Review: Triple Point 2011 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.
Triple Point 2011 VCT has launched a Venture Share class, known as the Triple Point Venture Fund. The first share offer raised around £7 million. The 2019/20 share offer aims to raise up to £10 million with a £10 million overallotment facility.
- New “Venture” Share Class will invest in growth capital opportunities in a range of sectors
- Initial target dividend of 3p per share from 2020 (not guaranteed)
- Minimum investment £3,000, you can apply online
- Annual rebate of 0.15% for three years
Triple Point Investment Management LLP was founded in 2004 and its team of 80 today manages £1.45 billion of private, institutional and public capital. To date, Triple Point has provided over £400 million of funding to 130 VCT/EIS companies.
Triple Point concentrates on four key areas for investment: venture capital; energy and infrastructure; lending, leasing and private debt; and property.
The VCT is managed by the six-strong Venture investment team, which has significant experience in venture capital, start-up incubation, private equity and asset finance. The investment team is supported by an advisory committee, whose members are successful entrepreneurs with investment experience in high-growth businesses.
Watch a video interview with Ian McLennan, partner at Triple Point:
Triple Point VCT 2011 plc (TP11) issued its first shares in April 2011 and has £18.2 million in net assets (as at 28 February 2019). It has raised over £44 million which has been invested in 33 companies (as at 11 September 2019).
The VCT was originally set up as a Limited Life VCT and had an Ordinary share class, which was fully exited in January 2018. It had two further share classes, ‘A’ and ‘B’, which invest in separate portfolios of Scottish hydroelectric power companies, combined heat and power plants, and lending to small and medium-sized companies (SMEs).
The Venture Shares are a new share class within the VCT. Please note, investors in the current and previous offer will only get access to the Venture Fund portfolio.
The Venture Fund aims to deliver significant capital growth by investing in early-stage companies. It intends to make initial investments of between £50,000 and £2 million and may make further follow-on investments. It is targeting a portfolio of around 20 investments and will look to take an equity stake of between 5–20%.
The manager believes the way to maximise potential returns is to invest in a company early, whilst it is in the process of transitioning from the start-up to the scale-up stage. That is the point when valuations tend to be lower, but also when young companies are statistically most likely to fail, often because there isn’t enough demand for their product or service.
The Venture Fund will typically invest in companies only after they have received some form of market validation. For instance, they will have an existing contract with – or firm commitment from – a corporate to buy their products or services.
These companies are sourced from Triple Point’s Venture Network. Through its 15-year investment history, Triple Point has developed deep relationships with a variety of blue chips, entrepreneurs, growth consultants and corporate innovation specialists.
The Venture Network is typically responsible for the initial screening of potential investments and for determining whether a business has in their view the ability to satisfy a specific corporate challenge. Successful opportunities are evaluated by Triple Point’s Investment Team, often in conjunction with the advisory committee and subject to due diligence. This forms the backbone of the investment paper, used by the Investment Committee to make its investment recommendation. The VCT board has the final say.
Exit track record
Because it is still a young portfolio and all the portfolio companies have received their first investment in 2019 there have been no exits and there is no performance data available yet.
The manager expects exits to take place between 5 to 7 years from investment, although this may be longer if there is the potential to enhance investor returns. Exit options and timeframes are not guaranteed.
Current portfolio overview
The Venture Fund has made four qualifying investments to date and has several deals currently in negotiation. Its first two investments, Augnet Limited and MWS Technology Limited were made in April 2019, after the VCT completed its first fundraising for the new share class.
Augnet Ltd has developed patented technology to securely send, track and monitor SMS messages. The company’s founder, Daniel Gill, is a former Skype executive with over 20 years’ experience in the telecoms industry. He created Augnet to solve the growing issue of ‘killed’ text messages – those that are sent but never delivered. Triple Point invested £300,000 as part of a £1.3 million funding round to develop the platform, support testing and invest in sales and marketing.
MWS Technology Ltd
MWS Technology Ltd has created two products targeted at improving vocational training and further education. Its first product, MyWorkSearch, is an employment platform which offers a personalised and flexible system for employers and jobseekers. MWS then launched Aptem, an all-in-one employer CRM designed to simplify apprenticeship and vocational training delivery. Triple Point first invested in 2018 through its Impact EIS Fund before offering a follow-on investment of £150,000 through the Venture Fund.
Performance and dividends
The Venture Fund aims to pay regular dividends from 2020. It is targeting a dividend of 3p per share in the summer of 2020 and 2021 and, subject to realisations, dividends of up to 5p per share thereafter. Dividends are variable and not guaranteed.
This is a new share class, so performance is not yet available.
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.
This is a relatively new VCT share class. If fundraising is slow, shares may take some time to be allotted, or may not be allotted at all.
Fees and charges
A summary of the main charges and savings is shown below. The net initial charge shown includes the Wealth Club saving and any early bird discount. The investment may have additional charges and expenses: please see the provider documents including the Key Information Document for more details.
|Full initial charge||5.5%|
|Early bird discount||0.75%|
|Wealth Club initial saving||3%|
|Existing shareholder discount||1%|
|Net initial charge through Wealth Club (new investors)||1.75%|
|Net initial charge through Wealth Club (existing shareholders)||0.75%|
|Annual management charge||2%|
|Annual administration charge||up to 3.5%|
|Annual rebate from Wealth Club (for three years)||0.15%|
More detail on the charges
0.75% early bird discount is available to investors in the VCT before 31 December 2019, or on the first £5m raised, whichever is reached first.
Share buy-back policy
The Company may operate a buy-back policy at a 5% discount to net asset value. Please see the offer documents for details.
Dividend reinvestment scheme
The VCT does not have a dividend reinvestment scheme in place.
Annual rebate when you invest through Wealth Club
The Octopus Titan VCT includes an annual rebate for Wealth Club investors, payable for the first three years.
This is a rebate of our renewal commission and should be equivalent to 0.25% of the Net Asset Value of the Offer Shares issued to you when you invest. Terms and conditions apply.
Triple Point has a longstanding reputation as a VCT manager. This is still a relatively new offering – it is only the second fundraise under the Venture share class.
The portfolio currently includes only four investments, so it is very concentrated, which increases risks. However, the manager’s long-term aim is to build a portfolio diversified across 20+ investments in different sectors.
The manager believes its preference for investee companies that have already received some form of market validation, and its connection to a base of large corporates through the Venture Network, could mitigate some of the risks of small-company investing.
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.
Triple Point Venture Fund – apply online
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