Baronsmead VCTs

New offer expected soon – register your interest below
Baronsmead Venture Trust (“BVT”) and Baronsmead Second Venture Trust (“BMD”) have announced the intention to open a new share offer for 2018/19.

The upcoming Baronsmead VCT offers aim to raise up to £25 million, and are expected to open early in 2019. 

Register your interest and we will let you know as soon as more information is available.

Highlights

  • Two of the largest and longest established VCTs – combined net asset value approximately £345 million (31 August 2017)
  • Managed by Livingbridge, which has approximately £1.7 billion under management and a 48-strong investment team behind the VCTs
  • Last year’s offer had a low minimum investment of £3,000 per VCT 

Register your interest in Baronsmead VCTs

Get notified as soon as VCT offers open…

The manager

The Baronsmead VCTs are managed by Livingbridge, an independent specialist asset management firm whose senior team has been working together for twenty years.

It comprises 82 members and employees, 48 of whom are responsible for finding, investing in and managing investments on behalf of the Baronsmead VCTs and other institutional clients. As at 31 August 2017, the Livingbridge companies managed approximately £1.7 billion.

Livingbridge has invested in over 100 businesses since 2005 – from MORI to mortgage advice, network operators to noodle restaurants and fertility clinics to fashion chain Fat Face and biscuit maker Thomas J. Fudge’s. It invests across business services, consumer markets, healthcare and education, and technology, media and communications, dedicating a team to each sector to help every business achieves its potential. At the 2017 Private Equity Awards, Livingbridge won “UK House of the Year”.

Livingbridge directors and founding members are required to subscribe in aggregate for 12% of each investment in unquoted companies – they can’t pick and choose. This helps to align their interests with those of investors. 

The VCTs

Together with the Northern VCTs, they are the oldest VCTs currently raising funds, with a history going back to 1995. Since launch, they’ve acquired a large base of loyal investors, many of whom invest time after time. 

New investors will gain exposure to the established portfolio of larger, more established companies, both unquoted and AIM listed, which have fuelled the impressive historic dividend payments to date: note past performance is not a guide to the future. 

Strategy

Both VCTs invest primarily in a diverse portfolio of UK growth businesses, either unquoted or AIM listed. These businesses usually operate in the UK but some may also trade overseas.

The manager aims to find young companies that are on the cusp of change, run by entrepreneurs with the vision and attitude to take their business to the next stage. 

There is a focus on four sectors: business services, consumer markets, healthcare and education, technology media and telecommunication, and an overarching aim to diversify, i.e. not to be exposed too much to a single company or sector. 

When investing in unquoted businesses, deals are usually structured as a combination of ordinary shares and loan stocks – the former allows investors to benefit from any upside, the latter provides downside protection and cash flow to support dividends. Alternatively deals might be structured as preference shares, so in the case of an exit at a low valuation, the preferred stockholders have a level of protection whilst benefitting from the upside at a high valuation.

Performance and dividends

Since its launch in 1998, BVT has paid an average annual dividend of 7.4 pence per share – 11.0 pence per share over the last five years. Since its launch in 2001, BMD has paid an average annual dividend of 7.4 pence per share – 11.9 pence per share over the last five years.

In the last two years the Baronsmead VCTs have realised seven investments, producing proceeds of £26.8 million and return multiples of up to 3.2x. 

Please note, dividends are not guaranteed and past performance is not a guide to the future. 

Source: Livingbridge VC LLP. Past performance is not a guide to the future. Total return is the NAV plus dividends, which are variable and not guaranteed. For 2017 the data is for the year ending 30 June. For BVT all other data is for the year ending 30 September. For BMD, data for 2007 to 2016 is for the year ending 30 September, and for the year ending 31 March for 2015 and before.
Source: Livingbridge VC LLP. Past performance is not a guide to the future. Dividends are variable and not guaranteed.
Source: Livingbridge VC LLP. Past performance is not a guide to the future. Dividends are variable and not guaranteed.

The portfolio

At 29 September 2017, the portfolio of the two VCTs was composed as follows:

  • BVT: invested in 20 unquoted investments and 54 quoted investments, with an aggregate valuation of approximately £171.2 million 
  • BMD: invested in 20 unquoted investments and 52 quoted investments, with an aggregate valuation of approximately £144.2 million 


Three of the top holdings – BVT*

Company Sector Date invested Book cost (£’000) Valuation (£’000)*
Staffline Recruitment Group Business services July 2000 174 7,813
Established in 1986 Staffline provides and manages workforces: from a network of more than 450 locations, it supplies over 55 million hours of temporary labour each year to more than 1,600 clients, including the major supermarket chains, food growers and manufacturers, logistics and distribution centres, customer service organisations and the care sector.
Crew Clothing Company
Consumer markets November 2006 2,907 4,952
Crew Clothing Co. is a British clothing brand with a wide range of active, outdoor and casual wear for men and women. Its heritage is in its south-coast roots, having been started in the back of a windsurfing school in Salcombe in 1993. Crew Clothing went from 34 retail outlets at the time of investment to 75 stores nationwide in 2016.
Netcall
Technology, media & telecommunications July 2010 1,738 4,754
Netcall is a leading provider of contact centre management software. Its solutions are used by over 700 organisations in the public, healthcare and private sectors.

Three of the top holdings – BMD*

Company Sector Date invested Book cost (£’000) Valuation (£’000)*
Netcall
Technology, media & telecommunications July 2010 1,738 4,754
Netcall is a leading provider of contact centre management software. Its solutions are used by over 700 organisations in the public, healthcare and private sectors.
Bioventix Healthcare & education June 2013 554 5,712
Bioventix manufactures and supplies high affinity sheep monoclonal antibodies (SMAs) for use in diagnostic applications such as clinical blood testing.
Inspired energy
Business services November 2011 862 5,337
Established in 2000, Inspired Energy has grown to become one of the largest energy consultants in the UK, with more than 10,400 clients – typically large private and public sector organisations – and over 21.25 billion kWh managed annually.

* all data as at 29 September 2017

Risks

Please remember your capital is at risk. VCTs are high risk investments and are not suitable for everyone: they are long term and illiquid. Investors should not invest money they cannot afford to lose. 

Tax rules can change and tax benefits depend on individual circumstances.

How to invest

Details of the offer are yet to be announced. Please register your interest here and we will let you know as soon as offer documents are available.


 

Wealth Club aims to highlight investments we believe have merit, but you should form your own view. You should decide based 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. 17.08.2018

The details

Type
Generalist
Target dividend
Coming soon
Initial charge
-
Initial saving via Wealth Club
-
Net initial charge
None
Annual rebate
 
Funds raised / sought
£25 million sought
Deadline
Coming soon

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