Triple Point VCT 2011

Early bird saving of 1.0% on the initial charge

In 2018 Triple Point 2011 VCT launched a Venture Share class, known as the Triple Point Venture Fund. The first share offer in 2018/19 raised £6.6 million. The second share offer closed on 30 July 2020 and raised £5.8 million. 

The Venture Fund has net assets of £10.7 million with £5.7 million held in cash (May 2020) and has made a total of 15 investments (September 2020). The latest offer looks to raise up to £10 million with an over-allotment facility of £10 million.

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 apply

Highlights

  • New “Venture” Share Class will invest in growth capital opportunities in a range of sectors
  • Initial target dividend of 3p per share (not guaranteed)
  • Annual rebate of 0.10% for three years
  • Available for 2020/21 and 2021/22 tax years
  • Minimum investment £3,000; you can apply online.

The manager

Triple Point Investment Management LLP (“Triple Point”) was founded in 2004 and its team of 120 today manages £1.53  billion of private, institutional and public capital. To date, it has provided over £450 million of funding to 144 VCT/EIS companies.

Triple Point concentrates on four key areas for investment: venture capital; energy and infrastructure; lending, leasing and private debt; and property.

The VCT is managed by the six-strong Venture investment team, led by partner Ian McLennan, which has significant experience in venture capital, start-up incubation, private equity and asset finance. The investment team is supported by an advisory committee, whose members are successful entrepreneurs with investment experience in high-growth businesses.

Watch a video interview with Ian McLennan of Triple Point:

Investment strategy

Triple Point VCT 2011 plc (TP11) issued its first shares in April 2011. It has raised over £47 million which has been invested in 43 companies (as at 29 February 2020).

The VCT was originally set up as a Limited Life VCT and had an Ordinary share class, which was fully exited in January 2018. It had two further share classes, ‘A’ and ‘B’, which invested in separate portfolios of Scottish hydroelectric power companies, combined heat and power plants, and lending to small and medium-sized companies (SMEs).

The Venture Shares are the newest share class within the VCT. Please note, investors in the current offer will only get access to the Venture Fund portfolio.  

The Venture Fund aims to deliver significant capital growth by investing in early-stage companies. It intends to make initial investments of between £50,000 and £2 million and may make follow-on investments. It is targeting a portfolio of around 20 companies and will look to take equity stakes of 5–20%. 

The manager believes the way to maximise potential returns is to invest in a company early, whilst it is in the process of transitioning from the start-up to the scale-up stage. That is the point when valuations tend to be lower, but also when young companies are statistically most likely to fail, often because there isn’t enough demand for their product or service. 

The Venture Fund will typically invest in companies only after they have received some form of market validation. For instance, they will have an existing contract with – or firm commitment from – a corporate to buy their products or services. 

These companies are sourced from Triple Point’s Venture Network. Through its 15-year investment history, Triple Point has developed deep relationships with a variety of blue chips, entrepreneurs, growth consultants and corporate innovation specialists. 

The Venture Network is typically responsible for the initial screening of potential investments and for determining whether a business has in their view the ability to satisfy a specific corporate challenge. Successful opportunities are evaluated by Triple Point’s Investment Team, often in conjunction with the advisory committee and subject to due diligence. This forms the backbone of the investment paper, used by the Investment Committee to make its investment recommendation. The VCT board has the final say.

Covid-19 impact

Following the outbreak of COVID-19, there has been a 6% write-down in the valuation of the portfolio. Having reviewed this impact on the portfolio, the Board has made a provision of c.£500,000 for any potential impairment. 

Overall, the Board is confident in the VCT’s ability to weather the current economic conditions. It is worth noting that as this is a relatively new share class within the VCT, the majority of its assets (53%) is still held in cash. Additionally, given the recency of the investments, portfolio companies should have significant cash resources, with cash runways, on average, of over a year. 

In terms of deal flow, the Triple Point team believes there are still good opportunities to be found. Consequently, the Board has agreed to raise additional capital to ensure the VCT is a strong position to react and benefit from these opportunities. 

Exit track record

There have been no cash exits from the Venture Shares portfolio to date. However, one company, Adepto, was sold in December 2019. The VCT received shares in Degreed Inc (the acquirer), as consideration for the sale. 

The manager expects exits to take place between 5 to 7 years from investment, although this may be longer if there is the potential to enhance investor returns. Exit options and timeframes are not guaranteed.

Current portfolio overview

The Venture Fund has now invested £6 million into 15 investments (September 2020). The Venture Fund has total net assets of £10.7 million, £5.7 million is held in cash or cash equivalents (May 2020). 

Source: Triple Point, as at 31 May 2020

Examples of portfolio companies

Augnet – Triple Point Venture FundAugnet Ltd

Augnet Ltd has developed patented technology to securely send, track and monitor SMS messages. The company’s founder, Daniel Gill, is a former Skype executive with over 20 years’ experience in the telecoms industry. He created Augnet to solve the growing issue of ‘killed’ text messages – those that are sent but never delivered. Triple Point invested £300,000 as part of a £1.3 million funding round to develop the platform, support testing and invest in sales and marketing.

MWS Technology – Triple Point Venture FundMWS Technology Ltd

MWS Technology Ltd has created two products targeted at improving vocational training and further education. Its first product, MyWorkSearch, is an employment platform which offers a personalised and flexible system for employers and jobseekers. MWS then launched Aptem, an all-in-one employer CRM designed to simplify apprenticeship and vocational training delivery. Triple Point first invested in 2018 through its Impact EIS Fund before offering a follow-on investment of £150,000 through the Venture Fund. 

Credit Kudos – Triple Point Venture FundCredit Kudos

One of the VCT’s latest investments, Credit Kudos is a Credit Reference Agency (CRA) that uses financial data obtained via Open Banking APIs. 

The idea for the company came about after software engineer, Freddy Kelly (co-founder), returned to the UK after working in Silicon Valley. He discovered his time away had severely impacted his credit history, leaving him with limited options. 

Rather than rely on personal assumptions, Credit Kudos allows lenders to analyse verified, up-to-date transaction data. With direct connections to the UK’s largest banks, users can safely and securely share their financial information with lenders, removing the need to upload bank statements and payslips. This not only provides a fairer credit rating for the user but also allows lenders to make quicker decisions and access a previously overlooked client base.

The Venture Fund invested £500,000  as part of £5 million Series A round in March 2020. 

Performance and dividends

The Venture Fund paid its first dividend of 3p per share on 31 July 2020. The target is to distribute a further dividend of 3p per share in respect of the financial year ending 28 February 2022, followed by a regular dividend of up to 5p per share, per annum, thereafter. Dividends are variable and not guaranteed.

Source: Morningstar. Share class launched in 2019. 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 31/12/2014 - 30/09/2020.

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.

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.

Full initial charge 5.5%
Early bird discount 1%
Wealth Club initial saving 3%
Existing shareholder discount 1%
Net initial charge through Wealth Club (new investors) 1.5%
Net initial charge through Wealth Club (existing shareholders) 0.5%
Annual management charge 2%
Annual administration charge 0.25%
Performance fee 20%
Annual rebate from Wealth Club (for three years) 0.10%

More detail on the charges

Deadlines

  • Apply by 18 December 2020 (5pm) for next allotment
  • Apply by 31 December 2020 – or before the first £5 million is raised, whichever is earlier – to receive a 1% early bird discount
  • Existing Triple Point VCT 2011 shareholders (all share classes) can also qualify for an additional loyalty discount of 1% if applying before 31 January 2021
  • Invest by 5 April 2021 (noon) for allotment in the 2020/21 tax year
  • Invest by 30 July 2021 (noon) for allotment in the 2021/22 tax year

Share buy-back policy

The Company may operate a buy-back policy at a 5% discount to net asset value. 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.

Our view

Triple Point has a longstanding reputation as a VCT manager. This is still a relatively new offering – it is only the third fundraise under the Venture share class. 

To date, the VCT has made investments into 15 companies, so it is a fairly concentrated portfolio. However, the manager’s long-term aim is to build a portfolio diversified across 20+ investments in different sectors. The VCT currently has a large allocation to cash (52.7% of net assets as at May 2020). 

The manager believes its preference for investee companies that have already received some form of market validation and its connection to a base of large corporates through the Venture Network could mitigate some of the risks of small-company investing – you should form your own view. 

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
3p per share
Initial charge
5.5%
Initial saving via Wealth Club
4% (5% for existing shareholders)
Net initial charge
1.5% (0.5% for existing shareholders)
Annual rebate
0.10%
Funds raised / sought
£1.6 million / £10.0 million
Deadline
18 Dec 2020 for next allotment
Last updated: 21 September 2020

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