Puma AIM VCT

Puma AIM VCT is a new VCT managed by the same team who manages the £232.5 million Puma AIM IHT portfolio (June 2024), led by Dr Stuart Rollason. Puma Investments is an experienced VCT and AIM IHT portfolio manager. 

The VCT expects to invest primarily in VCT-qualifying AIM investments, focusing on those with an established market presence and prudently managed growth strategies. It may also invest in unquoted private small and medium-sized enterprises alongside the other Puma VCTs.

• Seeking to raise up to £10 million, with a £10 million overallotment facility 
• Targets average dividends of 5p per share once it starts paying dividends – variable and not guaranteed
• Available for the 2024/25 and 2025/26 tax years 
• Minimum investment £3,000 – you can apply online 
• Next deadline: 0% initial fee until 20 December 2024

The manager

The Puma AIM VCT is managed by Puma Investments, part of the Shore Capital Group. Puma has £1.6 billion in assets under management, of which £232.5 million within the Puma AIM IHT service (June 2024) and £176.8 million in the Puma Alpha and Puma 13 VCTs. Shore Capital also has a large capital markets business, through which it is the third largest market maker on AIM.

The lead manager on the AIM VCT is Dr Stuart Rollason, who joined Puma in May 2021. He has over 23 years’ experience as a small and mid-cap investment professional. He joined from Kestrel Partners LLP, where he led the management of the AIM IHT service for a decade. Dr Rollason is supported by Joseph Cornwall, investment manager, who joined Puma in August 2021 after five years managing the Gore Browne IM AIM IHT Portfolio, and Daniel Cane who joined Puma in September 2024 after 16 years with the AIM-focused Toscafund Micro Cap Fund.

Puma Investment Management Ltd is the investment manager. 

Investment strategy

The Puma AIM VCT will seek to invest primarily in VCT-qualifying AIM investments: initial public offerings (IPOs) and placings. 

The team will consider the strength of the management team, the company’s operating market and admission documents, as well as its own financial modelling and site visits. 

Puma will assess Companies and their management teams, with particular focus on: 

• The opportunities, risks and hurdles to delivering the business plan.
• The market opportunity, including the growth prospects and the capital required to deliver planned growth.
• Management’s ability and willingness to set realistic and conservative growth forecasts while managing working capital and costs.
• The competitor landscape. 

Investors should note that VCT-qualifying AIM investments tend to be younger and often unprofitable – and are therefore very different to the kinds of businesses that Puma would ordinarily back through its IHT portfolio.

In periods when it does not see sufficiently attractive deal flow on AIM, the VCT may invest in unquoted small and medium-sized enterprises alongside the Puma Alpha VCT and Puma VCT 13. These are generally scale-up opportunities; backing well-managed, established companies expected to generate revenues in excess of £2 million, with limited external debt. 

Current portfolio overview

As this is a new VCT, it has yet to make any investments.

The manager has not previously backed any VCT-qualifying AIM investments. However, the team behind the Puma Alpha VCT and Puma VCT 13 has extensive experience backing small and medium-sized private companies.

Exit track record

Most of the companies in which AIM VCTs invest are quoted on AIM, so shares can be bought and sold more easily than is the case with private (unquoted) companies. Realisations – particularly partial ones – are common with AIM VCTs, for instance, to rebalance the portfolio. We do not believe they are indicative of a manager’s performance and for this reason we don’t focus on them. As this is a new VCT, it has yet to start building a portfolio and realise any investments. 

Performance and dividends

The VCT is targeting an average dividend of 5p per share, however this is likely to be some years away. All dividends are variable and not guaranteed. 

As this is a new VCT, there is no performance track record. Investors should note that the investment strategy is very different to both the other Puma VCTs and the Puma AIM IHT portfolio.

Dividend Reinvestment Scheme

The VCT intends to offer a dividend re-investment scheme (“DRIS”), although the timing of this is not confirmed. 

Share buybacks

The board intends to buy back shares at up to a 5% discount to the prevailing net asset value. This is not guaranteed – please see the offer documents for details.

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. 

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.

As this is a new VCT it will take time to build a portfolio of investments, during this time the trust is likely to be more concentrated and no dividend payments are expected initially. If the raise is smaller than expected, costs may have a larger impact than intended. Equally, the portfolio may initially be less diverse than anticipated.

The offer is conditional upon the minimum subscription (£3 million) being reached – not guaranteed. 

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, 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.

Annual rebate when you invest through Wealth Club

The Puma AIM VCT offer 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 a percentage (shown in the table above) of the net asset value of the offer shares issued to you when you invest. Terms and conditions apply.

Deadlines

• Deadline for 0% initial charge: 20th December 2024
  
• Deadline for final allotment in the 2024/25 tax year: 4 April 2025 (11am)
• Deadline for final allotment in the 2025/26 tax year: 28 August 2025 (5pm)

Our view

Puma has a strong track record of launching VCTs. However, while its team manages a sizeable AIM IHT portfolio, this is the firm’s first foray into the AIM VCT market. 

It comes after a difficult period for the AIM market. As a result, VCT-qualifying AIM deals have been thin on the ground in recent years. The VCT does benefit from access to the Puma Private Equity team, allowing it to invest in private companies selected by an experienced team should AIM deal flow remain subdued.

The VCT portfolio is likely to be quite concentrated in the early years with a high degree of cash, and it may be some time before the VCT can start paying dividends. 

It is possible that investors will face significant costs, a drag on investment returns, if the VCT does not raise substantial sums in its early years. Unlike other new entrants, Puma AIM VCT does not apply an expenses cap in the early years and is the only AIM VCT to charge a performance fee.

Wealth Club aims to make it easier for experienced investors to find information on – and apply for – investments. You should base your investment decision on the offer documents and ensure you have read and fully understand them before investing. The information on this webpage is a marketing communication. It is not advice or a personal or research recommendation to buy any of the investments mentioned, nor does it include any opinion as to the present or future value or price of these investments. It does not satisfy legal requirements promoting investment research independence and is thus not subject to prohibitions on dealing ahead of its dissemination.