Calculus VCT

Calculus Capital has invested in small unquoted companies since 1999, primarily through its EIS fund. The Calculus VCT launched in 2009. Calculus intends for the EIS and VCT to invest alongside each other.

In 2017 the Calculus VCT has consolidated its three share classes and is due to merge with Neptune Calculus VCT to form one larger portfolio, subject to shareholder approval.

An offer for subscription is now open, which seeks to raise £5 million with an over-allotment facility of a further £5 million. We are awaiting the application form and prospectus which should be available very shortly – you can make a no-obligation reservation by submitting the form below:


  • Wide range of sectors covered
  • More mature private businesses sought
  • £5,000 minimum investment
  • Consistent dividends have been a feature of previous share classes

The manager

Calculus Capital was founded by John Glencross and Susan McDonald in 1996; both are still actively involved with the firm today. They made their first EIS investment in 1996 and launched the UK’s first approved EIS fund in 1999 (it raised £1 million). Calculus manages £147 million, predominantly in EIS funds with a smaller amount in the VCT.

Target return and strategy

The VCT has a dividend target of 4.5% of net asset value per annum. Capital growth is also an aim.

Both returns and dividends are variable and not guaranteed. 

Calculus’s focus has always been on mature unlisted businesses. The main reason behind this choice, according to Mr Glencross, is the risk/return profile. Calculus aims to build a portfolio that is lower risk than other VCTs by targeting companies that share these characteristics:

  • Some mileage on the clock, so even if not profitable, it is clear where profits might come from 
  • Predictable cash flows, recurring revenues and a strong balance sheet 
  • Primary constraint is access to finance 
  • Proven successful products or services 
  • Offer a clear route to exit 
  • Can achieve in the manager’s opinion a target IRR of 20% 

The new VCT rules have reduced the general number of deals available, but this has not affected Calculus, according to Mr Glencross, because of its focus on growth investing. In his view 80% of companies considered in the past would still qualify under new rules. Most of the deals come exclusively to Calculus via corporate advisers or as the management of underlying companies come back for a second or third time.

Sectors of interest include healthcare, applied technology, IT, telecoms, transportation and environmental services. Healthcare is a wide sector, and could encompass the provision of a service to a patient or pharma services, diagnostics or health services for example. Calculus prefers business-to-business companies, although consumer businesses may also be considered. 

An example of a company within the current portfolio is Mexican-themed fast food chain Benito’s Hat. The investment from Calculus will enable the roll out of the chain across London. Another example is Genedrive, which hopes to bring molecular diagnostic testing for tuberculosis to the point of patient care.

The investment team is strong and has grown quickly over the last few years. Each new deal is reviewed by the investment committee three times, covering all aspects such as price and terms. The committee comprises founders Susan McDonald and John Glencross as well as deputy CEO Robert Davis. The role of these three is to scrutinise and review deals rather than seek out new deals themselves, to avoid biases. The fourth member of the committee will be the sponsoring director. Unanimity is required for a deal to proceed. On average, the investment team reviews around 500+ deals a year and completes around 12-15 investments across VCT and EIS portfolios. 

When reviewing a potential deal, they analyse the company’s own forecasts, pull them apart and compare them to their own forecasts. Exit price is considered first, from which they work out the entry price. How a company will perform, under a cautious scenario, is always important. 

Calculus is happy to incentivise management by offering them an increased return above a certain level of performance. 

As well as sitting on the investment committee, Robert Davis takes responsibility for the portfolio post the initial investment; growing value, reducing risk and ultimately exiting the company.

If we have any concern over the team its that it has grown very quickly over the last few years.

Exit strategy

There is no predetermined exit route for a company with a mix of trade sales and flotations the obvious avenue. Encouragingly, Calculus has exited three portfolio companies in Autumn 2016 from its EIS and VCT portfolios with two of those sold privately. Calculus has an excellent record of exiting EIS and VCT investments, with 27 thus far, as the VCT will co-invest alongside their EIS, these statistics are relevant.


The usual risks with unquoted companies exist with this offer. Until the merger takes place, the portfolio will be concentrated. 

Please remember capital is at risk. VCTs are high risk investments and are not suitable for everyone. Investors should not invest money they are not prepared to lose. 


There is a 5% initial charge, before any Wealth Club saving. There is an ‘early bird’ discount – applications received by 2 February 2018 qualify for a 0.5% saving on the initial charge. Existing shareholders also receive 0.5% additional discount on the initial charge.

There is an annual fee of 1.75% and the annual charges are capped at 3.0% – a reduction from previous years. There is a performance incentive fee of 20% of the excess returned above 105 pence per share. VAT will be charged where applicable. 


Calculus has delivered excellent returns for EIS investors with many exits; however, returns on the VCT haven’t been as good. As the VCT and EIS start to co-invest, the performance of the VCT will hopefully improve. There is a strong team in place who have a clear idea of the types of companies they seek. 

This review is not intended to be advice or a personal recommendation to buy the investment mentioned, nor is it a research recommendation. Wealth Club aims to highlight investments we believe have merit, but investors should form their own view on any proposed investment.

The details

Targeted Dividend
Initial Charge
Minimum Investment
2 Feb 2018 for early bird saving
WealthClub Saving

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