VCTs – are you investing at yesterday's prices?
Archived article: please remember tax and investment rules and circumstances can change over time. This article reflects our views at the time of publication.
We are living through unprecedented times. The outbreak of COVID-19 is having a material impact on everyone’s lives and on financial markets.
One question many of our investors are asking is how this is being reflected in VCT valuations. Indeed, some have asked if it’s a case of “investing today at yesterday’s prices”.
In general, we expect VCTs to revalue their net assets in consideration of the recent events prior to allotment but there are no guarantees.
This is relevant because VCTs commonly follow an allotment formula such as the one below:
Number of offer shares = [investment amount] – [offer costs] / [NAV per share]
NAV per share is the latest published Net Asset Value per share, typically adjusted for dividends. If the VCT board considers the NAV to have moved significantly since it was last published, it may allot using an updated unaudited NAV.
VCT Net Asset Values before and after COVID-19
This table only includes VCTs that have announced an updated NAV in March 2020 – we will update it as new announcements are made. See below for further details.
|VCT||Latest NAV |
per share (p)
|as at||Previous NAV |
per share (p)
|as at||% change|
|Amati AIM VCT||180.2||15 Oct 2020||155.67||31 Dec 2019||15.76%|
|Baronsmead Venture Trust||71.02||30 Sep 2020||79.48||31 Dec 2019||-10.64%|
|Baronsmead Second Venture Trust||73.36||30 Sep 2020||81.81||31 Dec 2019||-10.33%|
|British Smaller Companies VCT||63.6||25 Sep 2020||76.1||31 Dec 2019||-16.43%|
|British Smaller Companies VCT 2||46.9||25 Sep 2020||55.2||31 Dec 2019||-15.04%|
|Calculus VCT||64.27||31 Aug 2020||71.78||31 Dec 2019||-6.65%|
|Downing ONE VCT||59.1||30 Jun 2020||74.4||31 Dec 2019||-20.56%|
|Draper Esprit VCT||45.6||30 Jun 2020||55.6||30 Dec 2019||-17.99%|
|Foresight Williams Technology Shares||30 Jun 2020||31 Dec 2019||-|
|Foresight VCT||164.5||30 Jun 2020||191.25||31 Dec 2019||-13.99%|
|Hargreave Hale AIM VCT||75.12||16 Oct 2020||72.36||31 Dec 2019||3.81%|
|Maven Income and Growth VCT||44.35||31 Aug 2020||46.37||30 Dec 2019||-4.36%|
|Maven Income and Growth VCT 3||54.74||31 May 2020||59.92||30 Dec 2019||-8.64%|
|Maven Income and Growth VCT 4||64.73||30 Jun 2020||70.91||31 Dec 2019||-8.72%|
|Maven Income and Growth VCT 5||35.76||31 Aug 2020||37.37||30 Dec 2019||-4.31%|
|Mobeus Income & Growth VCT||58.86||30 Jun 2020||64.78||31 Dec 2019||-9.14%|
|Mobeus Income & Growth 2 VCT||72.16||30 Jun 2020||92.37||31 Dec 2019||-21.88%|
|Mobeus Income & Growth 4 VCT||64.59||30 Jun 2020||74.9||31 Dec 2019||-13.77%|
|[Mobeus] The Income & Growth VCT||76.52||30 Jun 2020||78.62||31 Dec 2019||-2.67%|
|Northern Venture Trust||60.7||30 Jun 2020||67.9||31 Dec 2019||-10.6%|
|Northern 2 VCT||55.0||30 Jun 2020||63.8||31 Dec 2019||-13.79%|
|Northern 3 VCT||81.2||30 Jun 2020||94.3||31 Dec 2019||-13.89%|
|Octopus AIM VCT||106.6||19 Oct 2020||102.3||31 Dec 2019||4.20%|
|Octopus AIM 2 VCT||78.6||19 Oct 2020||76.8||31 Dec 2019||-2.34%|
|Octopus Apollo VCT||45.0||13 Aug 2020||43.2||31 Dec 2019||4.17%|
|Octopus Titan VCT||91.1||20 Oct 2020||95.2||31 Dec 2019||-4.31%|
|Pembroke VCT||113.1||30 Sep 2020||112.12||31 Dec 2019||0.87%|
|ProVen VCT||68.0||31 May 2020||73.6||31 Dec 2019||-7.61%|
|ProVen Growth & Income VCT||56.2||31 May 2020||61.3||31 Dec 2019||-8.32%|
|Puma VCT 13||100.33||29 Feb 2020||90.51||31 Dec 2019||10.85%|
|Seneca Growth Capital VCT
|90.4||30 Sep 2020||93.1||31 Dec 2019||-2.90%|
|Triple Point 2011 Venture Shares||89.54||31 Aug 2020||99.01||31 Dec 2019||-9.56%|
|Unicorn AIM VCT||178.55||30 Sep 2020||173.64||31 Dec 2019||-2.83%|
What might this mean for current VCT offers?
We have contacted the managers of all the VCTs that are currently open to obtain, where possible, more details – their answers are below.
Please note, valuations are market sensitive, so announcements are made via the London Stock Exchange’s Regulatory News Service (RNS). We shall endeavour to update the list below as and when further VCT providers make an announcement.
The information below is correct as at 31 March 2020, based on information provided by the relevant VCT managers and from their RNS announcements.
AIM shares are traded daily so the portfolio is valued daily based on the latest available market prices. Any market reaction to COVID-19 will be priced in. The NAV used for future allotments will be based on latest market price prior to allotment.
On 19 March 2020, the Board of Pembroke VCT completed its review of the portfolio and decided to reduce the NAV per B share prior to the allotment scheduled for 20 March 2020. The NAV has been reduced to 111.00p, down from 115.1p per share.
On 10 March 2020 Octopus Titan VCT revalued its NAV, after marking down the value of travel exposure investee companies by 25%. Shares in Octopus Titan VCT were allotted on 11 March 2020 at an equivalent price of 93.8p per share, down from 95.2p as at 31 December 2019.
On 2 April 2020 Octopus Titan VCT announced a further revision in the NAV per share to 91.0p. This NAV will be used for the allotment of new shares to take place on 3, 4 and 7 April 2020.
Alliott Cole, who heads up the team that manages Octopus Titan VCT, has provided a fund manager’s update on how the current situation has impacted the VCT (18 March 2020). Read the update online »
On 20 March 2020 the ProVen VCTs revalued their NAVs prior to allotting new shares, which is expected to take place on 1 April 2020. The NAV of ProVen VCT is 65.1p (down from 73.6p) and the NAV of ProVen Growth & Income VCT is now 54.6p (down from 61.3p). Both ProVen VCTs are now fully subscribed and the offer is closed.
On 25 March 2020 the Northern VCTs revalued their NAVs prior to allotting new shares, which is expected to take place on 2 April 2020. The NAV of Northern Venture Trust is 54.6p (down from 76.9p), the NAV of Northern 2 VCT is 50.0p (down from 63.8p, after deducting the 2.0p interim dividend paid in January) and the NAV of Northern 3 VCT is now 72.0p (down from 94.3p, also after deducting the 2.0p interim dividend paid in January). A Supplementary Prospectus has been issued.
This is a new VCT so there is no existing portfolio to revalue.
On 31 March 2020 Calculus VCT announced an updated Net Asset Value as of 31 January 2020. The NAV per share is now 65.1p, down from 71.8p as at 30 November 2019.
The board of the Downing ONE VCT intends to reassess the value of the portfolios and, if appropriate, adjust the NAV prior to allotting new shares. Downing ONE VCT released a new NAV of 70.2p per share on 9 March 2020, down from 74.4p as at 31 December 2019.
Draper Esprit VCT has issued a Supplementary Prospectus prior to allotting new shares on 3 April. The unaudited NAV per share as at 27 March 2019 is now 40.8p, down from 57.1p as at 30 September 2019.
On 27 March 2020 Foresight VCT announced that the unaudited NAV per share is now 66.5p, down from 77.4p as at 31 December 2019. A Supplementary Prospectus has been issued. To date only c.£7m of applications were allotted shares prior to the reduction in NAV, so the majority of subscriptions will be allotted at the revised NAV.
Foresight Williams Technology Shares is a new share class within the Foresight Solar and Technology VCT, so there is no existing portfolio to revalue.
On 2 April 2020 Octopus Apollo VCT announced a revised NAV per share of 42.9p, down from 45.7p as at 31 January 2020. This NAV will be used for the allotment of new shares to take place on 3 April 2020.
Puma Alpha VCT is a new VCT, so there is no existing portfolio to revalue.
Seneca Growth Capital revalued its B Share Class NAV prior to an allotment in response to COVID-19. The NAV was reduced by 4.4p to 88.7p as at 6 March 2020. On 30 March the board announced a further reduction in NAV, to 79.5p per share – down from 93.1p as at 31 December 2019.
Having launched in 2019, Triple Point VCT 2011 Venture Shares is a newer offering with a large cash balance. For this reason, the team does not expect there to have been a material change to the NAV. The board will be considering if it is appropriate to revalue the NAV prior to any allotment. Any change in NAV will be reflected through the Regulatory News Service.
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