Maven Income & Growth VCTs

Update (22 Jul 2020): Intention to fundraise announced

Two of the Maven VCTs have announced they intend to open a share offer in 2020/21. You can register your interest here.

We will update our review as soon as the new offer documents are available. You can read excerpts of our previous review below.

Register your interest now – no obligation

Overview

Maven Capital Partners has announced plans to raise up to £20 million across two VCTs it manages: Maven Income and Growth VCT plc (“MIG1”) and Maven Income and Growth VCT 5 plc (“MIG5”), with a £20 million overallotment facility.

The Maven team is highly regarded and has a strong regional focus, allowing access to deals more London-centric VCTs might miss.

Highlights

  • Broad selection of mature investments, plus expanding portfolio of younger companies offering growth potential
  • Strong regional network 
  • Highly regarded and well resourced team 

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.


The manager

Seasoned VCT investors will be familiar with Maven Capital Partners. It is a specialist manager of venture capital, private equity and unquoted investments, headed by managing partner Bill Nixon. There are now four Maven Income and Growth VCTs, with MIG4 in the process of completing its planned merger with Maven Income & Growth VCT 6 in December 2019.

Maven began life as the private equity and VCT arm of Aberdeen Asset Management before Bill Nixon and the senior team led a management buyout in 2009. 

Maven tends to invest in the regions rather than in London and the South East. It has nationwide coverage through its twelve offices in Aberdeen, Birmingham, Bristol, Durham, Edinburgh, Glasgow, London, Manchester, Newcastle, Preston, Nottingham and, most recently, Reading, allowing it to see and take advantage of opportunities its peers might not come across. Maven also manages funds for the British Business Bank.

Maven has a large, well resourced investment team of over 90 investment professionals – one of the largest of any VCT. It has made significant efforts to increase its deal flow and portfolio management team over recent years to maintain high standards of support for its younger investee companies. In total Maven manages over £660 million across all its investments. Maven and its senior management team have invested more than £4 million in Maven VCT offers. Maven executives and the directors of the VCTs intend to make a significant investment in the current offer. 

Investment strategy 

Maven’s investment team applies the same broad investment strategy across all its VCTs. It targets established, entrepreneurial but often unglamorous businesses, led by proven management teams which Maven believes have robust growth prospects. It concentrates on companies available at attractive entry multiples, which can generate regular income and have the potential to achieve medium to long-term capital appreciation – although this is not guaranteed.

Maven’s UK-wide coverage and investment resources enable it to access a wide range of suitable private company opportunities. It is “all about the regions”. It generates introductions to approximately 800-1,000 new opportunities each year across the regions. These are then subject to filtering. Every transaction goes through a structured three-stage investment approval process, led by the relevant Maven regional deal executives and supported by the collective knowledge and expertise of Maven’s UK-wide team. Managing partner Bill Nixon, who leads the investment committee, has the final saying on any new investment. 

Typically, Maven invests £2 million to £8 million per deal in total and benefits from non-VCT money to invest alongside. This enables larger deals and allows the VCTs to occasionally invest in more mature, but still VCT-qualifying, businesses. The VCTs will focus primarily on unquoted investments but will consider AIM-listed opportunities as well. 

Co-investment can also help Maven spread the risks associated with the increased focus on smaller, less mature businesses resulting from the new VCT regulations, and complete a larger number of investments in order to diversify – although there are no guarantees.

Investors can expect the majority of the portfolio initially to be made up of management buyout, development capital, acquisition finance and replacement capital deals. Over time, the balance is expected to shift more towards earlier-stage investments.

Exit examples

Maven Income and Growth VCT – Just-TraysJust Trays

Just Trays (JT Holdings (UK) Ltd) was established in 1988 and grew to become the UK’s leading manufacturer of shower trays and related accessories. All design, development and production are undertaken at its main facility in Leeds.

Maven made a multi-million pound investment across all its VCTs to back the management team in a secondary MBO deal in 2014. Under the current management team, the business has demonstrated its resilience through different economic cycles, maintaining profits in a market hit by the UK recession.

Maven exited Just Trays in June 2019 in a trade sale to bathroom company Kartell, generating a return of 2x on its initial investment. Past performance is not a guide to future returns.

Chic Lifestyle – example of failure

As is to be expected, not all investments work out. Chic Lifestyle, which operated boutique hotel booking platform Chic Retreats, is an example. The company was established in 2012. Maven invested a total of £2 million in November 2016. The company encountered difficulties completing the next round of funding and as a result, it was eventually placed into administration in July 2018.

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.

How to invest

The VCTs are not currently open to new subscriptions, but intend to launch an offer for subscription in 2020/21. 

Register your interest now to receive alerts when new VCT offers open.

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

Type
Generalist
Target dividend
-
Initial charge
-
Initial saving via Wealth Club
-
Net initial charge
-
Annual rebate
-
Funds raised / sought
-
Deadline
Coming soon
Last updated: 15 November 2019

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