Triple Point VCT 2011

Now overallotting. Final close extended to 20 August

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

The VCT makes use of Triple Point’s Venture Network, built over 15 years, to work with and identify promising small innovative companies that are solving problems faced by large corporates. The VCT seeks to invest once some form of market validation has been achieved, typically after the company has secured a contract with an established corporate customer. 

The Venture Fund has net assets of £11.5 million with £3.1 million held in cash (November 2020) and a portfolio of 20 investee companies. The latest offer looks to raise up to £10 million, with an overallotment facility of up to £10 million.

Update (13 Jul 2021) – the VCT has announced it will use £2.5m of its 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 apply

Highlights

  • New “Venture” Share Class will invest in growth capital opportunities in a range of sectors
  • Focus on B2B businesses that have secured their first contract with a large corporate.
  • Initial target dividend of 3p per share (not guaranteed)
  • Annual rebate of 0.10% for three years
  • Available for 2021/22 tax year only
  • 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 £1.8 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.

Established for over 15 years, the Triple Point Venture Network is a network of blue-chip corporates, entrepreneur investors, corporate innovation specialists, and venture capitalists. The Venture Network works with innovative small businesses in solving large identified corporate problems. It will act as the initial screen and provide deal flow to the venture investment team.

Watch a video interview with Ian McLennan of Triple Point:

Investment strategy

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 innovative companies, at an early stage, when valuations tend to be lower, but after the company has received some form of market validation. 

The investment strategy starts by identifying problems faced by large corporates. The Triple Point Venture Network will find innovative small businesses it believes to be well placed to solve those problems. The corporate will then typically purchase the product/service and potentially enter a contract to buy the product or use the service, thereby providing the small business with market validation and initial revenue. Triple Point believes this overcomes one of the main reasons young companies statistically fail: not enough demand. That said, investing in early-stage companies remains high risk, you should expect some failures. 

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. 

The VCT 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%.

Covid-19 impact

Following a review of the portfolio in March 2020, the Board revalued the NAV to 93.12p, down from 99.01p (as at 30 November 2019). In August 2020, the NAV was revised to 89.54p, after paying a 3p dividend. More recently, the VCT announced a NAV uplift to 93.63p (as at January 2021), an increase of 4.09p compared to August. 

While a number of portfolio companies have been affected by Covid-19, the Board believes the VCT has benefited from being relatively young. As a new share class, a significant proportion of its assets (27%) are still held in cash. Additionally, investee companies have raised funds fairly recently, meaning they should have sufficient cash resources. The average cash runway across the portfolio is approximately 11 months (as at August 2020). 

In terms of deal flow, the Triple Point team believes there are still good opportunities to be found. Accordingly, the VCT has continued to make good progress in deploying funds, adding an additional five qualifying investments to its portfolio in the three months to 30 November 2020. 

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 £8 million into 20 investee companies (November 2020). The Venture Fund has total net assets of £11.5 million, £3.1 million is held in cash or cash equivalents (November 2020). 

Source: Triple Point, as at 30 November 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.

An interim dividend of 3p per share for the Venture Fund has been declared, to be paid 30 July 2021.

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 31/12/2019-31/03/2021.

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.

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
Net initial charge through Wealth Club (new investors) 2.5%
Net initial charge through Wealth Club (existing shareholders) 2.5%
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

  • Final closing date extended to 20 August 2021 (12 noon, cleared funds)

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. 

The VCT has a portfolio of 20 investee companies, so it is fairly concentrated, although growing quickly. 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 (27% of net assets as at November 2020). 

The manager has a differentiated investment strategy focusing on early-stage innovative B2B companies solving problems faced by large corporates. The manager believes its preference for investee companies that have already received some form of market validation, by securing a contract with a large corporate, could mitigate some of the risks of small-company investing and provide attractive long term returns to shareholders – 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
3%
Net initial charge
2.5%
Annual rebate
0.10%
Funds raised / sought
£10.1 million / £12.5 million
Deadline
20 Aug 2021 (noon) for final allotment
Last updated: 24 March 2021

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