Downing FOUR VCT – Ventures Shares

Downing LLP is an experienced investment house, with over £1.5 billion of funds under management. It acts as investment adviser to four VCTs, which have cumulative assets of £186.7 million (September 2021).

Downing FOUR VCT has three active share classes:

The Ventures Shares (previously known as Generalist) seek to invest in a portfolio of small, ambitious technology businesses. The share class is overseen by Downing’s dedicated Ventures team – which is responsible for the existing Ventures portfolio. The team takes a thematic approach to its investment strategy, focused on three key sectors: Deep Tech, Enterprise Software, and Healthcare.

The share class first issued shares in February 2017, it has net asset of £30.8 million, spread across a portfolio of 36 investee companies and two Downing funds (31 September 2021). 

Under the current offer, the VCT seeks to raise up to £10 million in this share class, with a £15 million overallotment facility.

Important: The information on this website is for experienced investors. It is not advice nor a research or personal recommendation to invest. If you’re unsure, please seek advice. Investments are for the long term. They are high risk and illiquid and can fall as well as rise in value, so you could get back less than you invest.

Read important documents and then apply


  • Focus on young innovative technology companies, and exposure to Downing Strategic Investment Trust Plc
  • Experienced VCT manager
  • Target dividend of 4% – variable and not guaranteed
  • Annual rebate of 0.10% for three years
  • Invest in the 2022/23 tax year
  • Minimum investment £5,000 – you can apply online

The manager

The VCT is managed by Downing LLP, whose origins date back to 1986. Downing is an experienced investment house, with over £1.5 billion of funds under management. It has four VCTs, with cumulative assets of £186.7 million (September 2021).

The Ventures Shares are managed by Downing Ventures, a division of Downing LLP that invests in early and growth-stage technology businesses. 

The team made two high-profile hires in 2020, adding experienced US investor Warren Rogers and Jack Eadie to improve the diversity and quality of the deal flow being considered by the Ventures team. Warren Rogers has subsequently left the business, and the team is now led by Partner Richard Lewis, who previously held positions at Japanese Bank Mitsui, investing in the US and Israel. Jack Eadie remains at Downing, bringing two years experience as Principal at Next47, a Deep Tech and Enterprise focused $1 billion US VC fund, backed by Siemens, and four years at Eight Roads Ventures. 

In total there are nine investment professionals within the team, four of whom are Partners. The team is further supported by five venture partners.

Watch a video interview with Jack Eadie of Downing Ventures:


Investment strategy

The Downing Ventures team takes a thematic approach to investing. It believes by being selective and having a deep level of knowledge within its chosen sector specialisms, it can better understand the businesses, be better informed, and make better investment decisions. 

The team is focused on three key sectors:

  1. Deep Tech – Companies that develop technology based on scientific advances, such as applied intelligence or thematic materials. Downing believes well protected intellectual property can provide significant barriers to entry for competitors and potentially create significant value for shareholders.
  2. Enterprise Software – Companies that provide software which drives workflow efficiencies and operational improvements for businesses. Software businesses are favoured due to their potential to scale quickly, becoming embedded within a company’s systems and creating durable long-term recurring revenues. 
  3. Healthcare – The global healthcare market is a growing multi-$trillion market. Technological advancements have lowered the cost of adoption of novel healthcare solutions. Downing will seek to benefit from the UK being one of the world’s leading hubs for healthcare innovation. 

Downing will source deals using its global network of venture partners and sector experts. In the UK, it will focus on the ‘Golden Triangle’ of Oxford, Cambridge, and London, and the ‘Silicon Gorge’ of Bristol and Bath.

Downing believes its network can also add value. Its Venture Partners are located in global hubs such as Israel and the US, potentially providing portfolio companies with opportunities to capitalise on new markets, secure additional funding, and identify potential exit options. Portfolio companies may also benefit from Downing’s ability to co-invest across its other VCT and EIS funds. It is expected Downing will co-invest to some extent in every deal.

The non-qualifying element of the portfolio is invested in OEICs, Investment Trusts and other securities in line with the investment policy. As at 30 September 2021, the Ventures share class held 10.0% of its net assets in Downing Strategic Micro-cap Investment Trust and a further 0.2% in the Downing UK Micro-cap Growth Fund, which is closed and returning cash to investors.

Exit track record

The Ventures share class first issued shares in 2017 and has yet to generate a profitable exit from a qualifying investment. Five investments have been written off and two realised at a loss (ADC Biotechnology, sold for £110k realising a £767k loss and BridgeU Corporation, sold for £462k realising a £348k loss). 

Whilst the share class is yet to experience a profitable exit, in June 2021 investee company Arecor Therapeutics Plc floated on AIM, leading to a 0.7p uplift in the net asset value of the share class. 

Live Better With 

As is to be expected, not all investments work out. One such example is Live Better With. 

Founded in 2015 by entrepreneur Tamara Rajah, Live Better With is a healthcare platform that aims to help people with long-term medical conditions – focusing on non-medical products that make day-to-day life better for patients. The company sells a range of products worldwide from its online platform and launched its first shop in St Thomas’ Hospital in London, the UK's first physical shop for people living with cancer.

The share class first invested in the business in March 2018, however, in the year to March 2020, the board of the VCT had fully written down the value of its investment as the business appeared unable to achieve its business plan following disappointing trading performance.

Covid-19 impact

The VCT suffered a period of disappointing performance in the six months to March 2020, partly as a result of the adverse impact of the pandemic. In March 2020, the trust’s net asset value fell from 77.6p on 30 September 2019 to 61.7p on 31 March 2020, before hitting a low of 61.2p in September 2020. The primary driver of this performance was the failure of Live Better With and the decline in the value of Empiribox Holdings, Lignia Wood Company, Downing Monthly Income and the two Downing micro-cap funds. 

The net asset value per share has since recovered to 68.5p in September 2021. This was driven primarily by the uplifts in the holding value of E.fundamentals (Group), Arecor Therapeutics and Virtual Class. Past performance is not a guide to the future.

Current portfolio overview 

As at 30 September 2021, the Ventures Shares had net assets of £33.3 million, of which £27.4 million is invested across 36 investee companies. 

The portfolio holds £3.4 million (10.2% of net assets) in Downing Strategic Micro-Cap Investment Trust plc and MI Downing UK Micro-cap Growth Fund, both non-qualifying investments. 

Examples of portfolio companies

e.fundamentals – Downing VCTsE.fundamentals (Group) – largest holding

E.fundamentals (Group) was set up to make e-commerce more rewarding for brands. The business has developed its “digital shelf” program to help brands manage their content across their range of online retailers, ensuring a brand’s products are listed with the correct pricing, regulatory and packaging information. It can also identify gaps in content to promote better engagement with consumers.

In 2021, the Edinburgh-based business announced it was making 12 new hires within its international tech team as it eyes global expansion. The business appears to be benefitting from growth within the burgeoning online grocery market, with consumer goods giants PepsiCo, Mars, and Arla integrating its digital shelf analytics platform, supporting revenue growth of more than 300%. 

The Ventures share class first backed the business in December 2017, investing £278k and followed on in 2019 and 2020, investing a total of £1.34 million. The holding is currently valued at £3.7 million, and is the largest holding within the VCT, accounting for 11.0% of net assets. Past performance is not a guide to the future.

FundamentalVR Downing FOUR VCT Ventures.jpgFundamentalVR – recent unquoted investment

FundamentalVR was founded in 2010 and combines virtual reality and Artificial Intelligence to help train medical staff. When paired with the group’s HapticVR systems, Fundamental allows surgeons to practice in a lifelike environment with responsive resistance from a variety of surgical instruments – think a flight simulator experience but for surgeons. 

Virtual simulations help reduce the cost of cadaveric training while increasing the frequency with which doctors can train. Increased hands-on experience should ultimately translate into better patient outcomes.

Downing invested in the business first in 2019, and a further £125,000 from the Ventures share class in 2021. That takes the total value of the position in the Ventures share class as at 30 September 2021 to £439,000, a 1.17x gain on cost. Past performance is not a guide to the future.

Performance and dividends 

The share class aims to pay dividends equivalent to at least 4% of its net asset value. Please note, dividends are variable and not guaranteed. 

The VCT suffered a period of disappointing performance in the year to March 2020, partly as a result of the adverse impact of the pandemic. In March 2020, the trusts’ net asset value fell from 77.6p on 30 September 2019 to 61.7p on 31 March 2020, before hitting a low of 61.2p in September 2020. The primary driver of this performance was the failure of Live Better With and the decline in the value of Empiribox Holdings, the Downing Monthly Income and both micro-cap funds. 

The net asset value per share has since recovered to 68.5p in September 2021, driven primarily by the uplifts in the holding value of E.fundamentals Group, Arecor, and Virtual Class Ltd. Past performance is not a guide to the future.

NAV and cumulative dividends per share over five years (p)

Source: Morningstar. Past performance is no guide to the future. Dividends are variable and not guaranteed. The bar chart shows net asset value and cumulative dividends per share for the period 31/12/2017 - 31/03/2022.

Dividends paid per calendar year

Source: Downing. Dividends paid in each calendar year since 2017. Dividends are variable and not guaranteed and past performance is not a guide to the future.

Average dividend yield (% of NAV) history

Calendar year Dividend as % of NAV
2020 3.80%
2021 4.12%

Source: Morningstar. Average dividend yields are based on the dividends paid over the period divided by the monthly average NAV of the VCT over the same period. Past performance is no guide to the future.


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. 

To retain the tax benefits, VCTs should be held for at least five years. If you sell VCT shares and reinvest in new shares of the same VCT (including any mergers) within six months, tax relief can be restricted. 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.

Charges and savings

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. 

There is a performance fee of 20% of dividends paid, which applies if the total return of the Ventures Shares is above the hurdle rate of £1.06 for 31 March 2022, rising by 3p per annum thereafter. This is unusual: performance fees are typically calculated as a percentage of the total return (net asset value plus cumulative dividends), which in our view better aligns the manager’s interests with those of shareholders. 

The investment may have additional charges and expenses: please see the provider documents including the Key Information Document for more details, offer price and share allotment calculation methodology.

Please note, capacity – for the offer or any early bird savings – can be reached early, and we may not be notified of this by the VCT in real time.

Full initial charge 4.5%
Early bird discount
Wealth Club initial saving 2.25%
Existing shareholder discount
Net initial charge through Wealth Club (new investors) 2.25%
Net initial charge through Wealth Club (existing shareholders) 2.25%
Annual management charge 2%
Annual administration charge See offer documents
Performance fee 20%
Annual rebate from Wealth Club 0.10%

More detail on the charges


  • Deadline for receipt of applications for final allotment in 2022-23 offer: 3pm on 31 May 2022

Dividend Reinvestment

The Company does not operate a dividend reinvestment scheme.

Share buy-back policy

The VCT intends to buy back shares at a 0% discount to the most recently announced net asset value. Buybacks are subject to the company having sufficient funds available and are at the discretion of the board. 

Discount history

VCT shares are traded on the London Stock Exchange. Similar to investment trusts, the share price can fluctuate and can be different from the VCT’s net asset value (NAV), i.e. the value of the VCT’s underlying investments. The difference between the share price of a VCT and its net asset value per share is called a discount.

Investors should note the Ventures share class of the VCT does not yet have a complete five-year track record. Any consideration of the share price movements in relation to the net asset value per share will therefore be inconclusive. We expect to publish the discount history chart once the VCT has built the necessary track record.

Investors looking to sell their VCT shares may get a better price using the VCT’s share buyback facility, although this is not guaranteed.

Annual rebate when you invest through Wealth Club

The 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 0.10% of the Net Asset Value of the Offer Shares issued to you when you invest. Terms and conditions apply.

Our view

The share class has suffered a period of disappointing performance since first issuing shares in 2017. This was exacerbated by the onset of the pandemic. A number of portfolio companies were negatively affected and the Downing Micro-cap fund, in which the share class held a small stake, shut due to poor performance and outflows. 2021 saw a modest recovery, with net asset value per share rising by 7.3p from its low in September 2020 to 68.5p in September 2021. 

The departure of Warren Rogers just two years after joining the Ventures team is a setback for the VCT. Warren’s network allowed the Downing VCTs to co-invest alongside world-renowned venture capital investors into later-stage deals in companies such as Parsable, Cornelis Networks and Ayar Labs. Following Warren’s departure, Downing now expects attention to return to earlier-stage investments – while aiming to retain an international flavour. That said, the Ventures team remains well resourced and several of its earlier-stage investments, including the VCT’s three largest holdings (E.fundamentals, Imagen, and Third Space Learning) are showing promise. 

Read important documents and then apply

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.

The details

Target dividend
4% of NAV
Initial charge
Initial saving via Wealth Club
Net initial charge
Annual rebate
Funds raised / sought
£4.4 million / £10.0 million
31 May 2022 (3pm) for 2022/23 allotment
Last updated: 28 March 2022

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