Calculus VCT

This offer is now closed

Calculus Capital has invested in small unquoted companies since 1999, primarily through its EIS fund. The Calculus VCT launched in 2009 and co-invests in many of the same companies.

In 2017 the Calculus VCT consolidated its three share classes and merged with Neptune Calculus VCT. Calculus VCT was until 2015 known as Investec Structured Products Calculus VCT plc.

The share offer seeks to raise £5 million with an over-allotment facility of a further £5 million. 

Highlights

  • Aims to invest in growth-focused, mature unlisted businesses, in many cases co-investing alongside the long-standing Calculus EIS fund
  • Around 20 portfolio companies held in a wide range of sectors
  • Target dividend of 4.5% of NAV, from summer 2019 (variable and not guaranteed)
  • Strong and experienced management team
  • £5,000 minimum investment
  • Monthly regular savings option available
  • 0.10% annual rebate through Wealth Club

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The manager

Calculus Capital was founded by John Glencross and Susan McDonald in 1996; both are still actively involved. They launched the UK’s first approved EIS fund in 1999 (it raised £1 million). Calculus manages £169 million (as at 5 April 2018), predominantly in EIS funds with a smaller amount (c.£10 million) in this VCT.

Watch an exclusive video interview with Calculus CEO John Glencross:

Target return 

The VCT has a dividend target of 4.5% of net asset value per annum, variable and not guaranteed. Dividends from the new offer shares are not expected until 2019.

Strategy 

Calculus’s focus has always been on mature unlisted businesses. Calculus targets companies seeking development or scale-up capital that have:

  • A robust business model
  • A strong management team
  • Evidence of market opportunity
  • Capability, in the manager’s view, of achieving a target IRR of 20%

Most of the deals come to Calculus via corporate advisers or as the management of underlying companies come back for a second or third time.

Calculus aims to find and back capable management teams in established companies which are already successfully selling products and services. Sectors of interest include agri-tech, leisure, telecoms, transportation, healthcare and business services. As at August 2017 the VCT held 21 companies in the portfolio. 

Three of the top four holdings of the enlarged portfolio are money market funds. As at May 2018, 33% was held in Aberdeen Sterling Liquidity Fund, Goldman Sachs Sterling Liquidity Fund and Fidelity Sterling Liquidity Fund. 

Example of a portfolio company

Calculus VCT – Blue Wireless TechnologyBlu Wireless Technology

In July 2017 both the Calculus VCT and EIS invested £2.4 million in Blu Wireless Technology. Blu Wireless is a firm leading the way in bringing ultra-fast millimetre wave (mmWave) wireless technology into homes and businesses through the roll-out of Wi-Gig® and 5G networks. Blu Wireless has many of the world’s leading semiconductor and consumer electronics companies among its customers.

This investment by Calculus was part of a £6.6 million institutional and private investment round and follows the recent strategic investment round led by ARM, the UK semiconductor and software design company. The investment will enable Blu Wireless Technology to accelerate the design and development of its core wireless technologies. It will help the firm grow its software design and development team and recruit additional sales and marketing resource to help expand its client base.

Risks

The usual risks with unquoted companies exist with this offer.

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

The value of tax relief depends on circumstances. Calculus Capital has an exclusive focus on EIS and VCT investments, both of which are subject to HMRC rules which can change frequently. This could leave the firm and its investee companies vulnerable if rules change unfavourably in future. 

The VCT holds a large proportion of cash currently which Calculus must invest within HMRC timescales to remain qualifying.

Fees & charges

A summary of the fees and charges is shown below. The net initial charge shown includes the Wealth Club discount.

Full initial charge 5%
Wealth Club initial saving 2.35%
Loyalty discount for existing shareholders 0.5%
Net initial charge through Wealth Club (new investors) 2.65%
Net initial charge through Wealth Club (existing shareholders) 2.15%
Annual charge 2%
Performance fee 20%

More detail on the charges

Share buy backs

Calculus VCT operates a share buy-back facility at a discount to net asset value. This is subject to availability and Board and shareholder approval.  Please see the offer documents for details.

Deadlines

Unless the offer is fully subscribed beforehand, the offer will close on 31 July 2018.

Annual rebate when you invest through Wealth Club

The Calculus 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

This VCT co-invests in many of the same deals as the well known Calculus EIS fund, allowing investors to access these portfolio companies at a much lower entry point (£5,000 minimum for the VCT compared to £50,000 minimum for the EIS). There is a strong and experienced team in place. The merger of the share classes and the Neptune fund should bring efficiencies and allow access to a larger, more diversified portfolio. However there is a significant amount of cash in the current portfolio. Additionally, please note any dividends on the new offer shares are not expected until summer 2019.

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. July 2018

The details

Type
Generalist
Target dividend
-
Initial charge
-
Initial saving via Wealth Club
-
Net initial charge
-
Annual rebate
 
Funds raised / sought
£2.2 million / £5 million
Deadline
CLOSED

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