Foresight Williams Technology Shares
Launched in December 2019, the Foresight Williams Technology Share class is a new share class in Foresight Solar & Technology VCT (formerly Foresight Solar & Infrastructure VCT).
The VCT is managed by a collaboration between the Foresight Group and Williams Advanced Engineering and will focus on early-stage, high-growth technology businesses. Foresight and Williams have been working together since 2015 and launched an EIS fund the following year. To date, the EIS service has raised in excess of £50 million. This new VCT share class marks another stage in the collaboration between the two businesses.
The share class has net assets of £6.55 million (February 2021) and began to make its first investments in this share class in late 2020, investing £1.1 million into three companies alongside its EIS service as well as institutional investors such as IP Group, Oxford Sciences Innovation, and the UK Government’s Future Fund.
The current offer is seeking to raise £20 million with an overallotment facility of £10 million.
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- New share class within an established VCT
- A collaboration between Foresight Group and Williams Advanced Engineering
- Early-stage focus, can be pre-revenue
- Invests in technology businesses, typically with an advanced engineering focus
- Available for tax year: 2021/22
- Minimum investment £3,000; you can apply online
The VCT share class will have the same team, process and investment strategy as the Foresight Williams Technology EIS fund.
The trust is managed by Foresight Group. Foresight Group now has £6.7 billion of assets under management, including £420 million in VCTs and EIS funds managed on behalf of over 24,000 investors.
Williams Advanced Engineering Limited (‘Williams’) is the technical adviser to the VCT. It was formed in 2010 when Williams Grand Prix Engineering Limited spun out its specialist engineering division into a separate company. The business has since grown to more than 300 employees. In 2019 Williams was acquired by EMK Capital, a private equity group, with Williams Grand Prix Engineering retaining a minority stake. Williams continues to be based at the same Oxford campus as Williams Grand Prix Engineering.
Foresight believes Williams’ involvement will add value to its EIS and VCT funds in two ways. Firstly, Williams’ technical expertise should provide the team with enhanced due diligence on potential investee companies. Secondly, investee companies could benefit from Williams acting as a consultant to help develop, optimise or solve engineering problems, thereby potentially enhancing the company’s value, although there are no guarantees. Williams will provide pro bono advice and support, and any specific consulting projects will be provided at a discounted rate.
Foresight believes the specialist technical knowledge of the Williams team – for example, helping to design products that are cheaper and quicker to produce, understanding of electrical systems, where to file patents or knowledge of advanced materials – has on occasion been instrumental in winning competitive funding rounds for investors in both the EIS and VCT.
Foresight Group’s wider network of industry contacts should generate deal flow. The team will look for opportunities where Williams can add value through enhanced due diligence, technological, or engineering support. Note, however, this is not an opportunity to invest in businesses spun out of Williams, nor to co-invest with Williams.
The investment team responsible for managing the EIS and VCT is made up of ten investment professionals: four from Foresight Group and six from Williams. The team is overseen by a seven-strong investment committee which includes senior members of Foresight Group and Williams. The investment team can also draw on the wider experience of Foresight Group’s 30 strong private equity team.
Watch a video interview with Andy Bloxam, Senior Investment Manager at Foresight Group
The Foresight Williams Technology share class aims to invest in early-stage companies with strong intellectual property, operating in attractive, substantive markets where the manager believes Williams’ technology, engineering, commercial and promotional support may offer a distinct advantage.
Foresight believes its focus on deep technology and innovative technologies within hardware and engineering sectors can often lead to Environmental, Social and Governance (ESG) benefits.
The team looks for certain qualities when evaluating potential opportunities. For instance, investee companies must demonstrate they have developed innovative technology that offers clear advantages to the end consumer as well as a roadmap towards commercialisation within 24 months. Target markets should be in excess of £100 million per annum, and investee companies must be run by ambitious and experienced management teams.
Williams’ core competencies are in:
- Aerodynamics and thermodynamics
- Battery systems and energy storage
- Composites, materials and nanomaterials
- Data analytics
- Electronics and control systems
- Lightweight structures
- System Integration
It is expected (not guaranteed) the VCT will focus on opportunities where Williams’ technical, commercial or promotional support can add value.
Current portfolio overview
The VCT will invest alongside the Foresight Williams Technology EIS fund in new and follow-on investments.
The VCT has net assets of £5.7 million (January 2021) and has begun to make its first investments. To date, the VCT has invested £1.1 million into three companies (Refeyn, Audioscenic, Additive Manufacturing Technologies) alongside its EIS service and institutional investors such as IP Group, Oxford Sciences Innovation, Horizon Ventures and the UK Government’s Future Fund (December 2020).
Examples of portfolio companies
Identifying and measuring protein molecules is an integral part of life sciences research, particularly in the development of new medicines. Refeyn is commercialising a disruptive technology that uses light to measure a molecule’s mass (mass photometry). The patented technology was invented at and spun out of the University of Oxford and allows users to characterise molecules significantly faster and at a lower cost than existing techniques.
The VCT invested £360k into the business in November 2020 as part of a larger growth funding round led by Northpond Ventures, a $1 billion US Life Sciences fund, Oxford Sciences Innovation, the University of Oxford, and Hong Kong-based Horizon Ventures. The investment will future support the commercialisation of Refeyn’s technology and position the company for future growth.
Additive Manufacturing Technologies
3D printing, otherwise known as additive manufacturing, continues to undergo rapid development and growth. The technology has transitioned from a niche prototyping technology to a large scale production technology. Despite this, much of the post-production processes (cleaning, smoothing, and sealing of 3D printed parts) remains a manual process. Additive Manufacturing Technologies is developing a fully automated postprocessing system to enable the production of industrial 3D printed parts at scale.
The VCT invested £360k in October 2020 as part of a larger £2.5 million funding round supported by the Foresight Williams EIS fund and the UK Government’s Future Fund.
The investment will provide working capital to support R&D and to further develop the company’s growing sales pipeline. In 2020 the business was trading strongly and expected to generate revenue in excess of £4 million, up over 100% compared to 2019. In October 2020, the business signed a partnership agreement with HP, a global leader in industrial 3D printing.
Performance and dividends
As this is a new offer (the VCT first issued shares in March 2020), performance data is not yet available.
The VCT will target an average minimum dividend of 5% per annum from 2024. Please note dividends are variable and not guaranteed.
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.
This is a new VCT share class. If fundraising is slow, shares may take some time to be allotted and while the fund is small there will be limited diversification.
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. The investment may have additional charges and expenses: please see the provider documents including the Key Information Document for more details.
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||5.5%|
|Early bird discount||—|
|Wealth Club initial saving||3%|
|Existing shareholder discount||0.5%|
|Net initial charge through Wealth Club (new investors)||2.5%|
|Net initial charge through Wealth Club (existing shareholders)||2%|
|Annual management charge||2%|
|Annual administration charge||0.3%|
|Annual rebate from Wealth Club (for three years)||0.10%|
More detail on the charges
- Closing date for 2021/22 tax year: 29 December 2021
- Share allotments are to occur monthly
Share buy-back policy
The Company aims to operate a buy-back policy at a 10% discount to net asset value (with the intention to narrow this to 5% from five years after the close of the offer). 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 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.
The new Foresight Williams Technology share class could add greater variety to the VCT landscape. The Foresight Williams EIS proposition has enjoyed some success in raising capital from investors. On behalf of the VCT, the team has deployed the capital into three interesting deep technology businesses so far, investing in competitive funding rounds alongside some of the world's leading venture capital investors.
The involvement of Williams Advanced Engineering appears to add a disciplined sector focus to the investment strategy and an avenue in which the team might look to add value to investors’ capital. The combination of a large asset management business with a cutting edge advanced engineering business may create a compelling destination for entrepreneurs seeking funding. Please note the track record is limited, and there are no guarantees. You should form your own view.
The new VCT share class is designed to offer investors another way of accessing the Foresight Williams team and the opportunities they invest in, in a VCT structure. The Foresight Group has ambitions to grow the VCT considerably over the coming years. If Foresight is successful, investors will gain exposure to a growing portfolio of deep technology and advanced engineering businesses.
Read important documents and 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.
- Target dividend
- 5% from 2024
- Initial charge
- Initial saving via Wealth Club
- 3% (3.5% for existing shareholders)
- Net initial charge
- 2.5% (2% existing shareholders)
- Annual rebate
- Funds raised / sought
- £8.8 million / £20.0 million
- 29 Dec 2021 for 2021/22 allotment