Foresight 4 VCT – Foresight Group

Deadline: 31 Jul 2017

Foresight 4 VCT has announced it will merge with its smaller sibling, Foresight 3 VCT, and raise a new subscription offer. The new offer seeks to raise £50 million, with an over-allotment facility of a further £50 million. 

This is the first new VCT offer to open in the 2017/18 tax year.

The manager

Foresight Group was founded in 1984 as a specialist technology venture capital manager. It has three investment divisions: private equity, environment and infrastructure. In total Foresight Group has £2.6 billion under management and 63 investment professionals. £292 million is invested in its range of VCTs. David Hughes is the Chief Investment Officer and is supported by 17 others in the private equity team. 

The VCT

Foresight 4 is a generalist VCT that seeks to invest in unquoted UK companies with growth prospects. Its current portfolio is weighted in favour of technology companies. Recent investments include Specac (laboratory equipment), Itad (international development consultancy) and Protean (engineering software).

It is managed by a team consisting of partners Russell Healey, James Livingston and Matt Smith and senior investment managers Claire Alvarez and Rodney Appiah. The board includes Peter Dicks who has been a director of both Foresight 3 and 4 VCTs since 2004.

History

This VCT started life as the Advent 2 VCT in 1998. Foresight took over as manager in 2004; it subsequently changed its name to Foresight 4 VCT. In 2012 it merged with three other trusts – Foresight 5 VCT, Foresight Clearwater VCT and Acuity VCT 3 – creating a combined company with £60 million in assets.

Foresight 3 VCT was originally Advent VCT, which also appointed Foresight as manager in 2004. In 2008 it was merged with Noble VCT.

The original Advent VCTs focused on early stage technology companies. Foresight diversified into environmental infrastructure in the late 2000s. It has since refocused the investment policy to look for growth companies regardless of sector.

Proposed merger

The merger with Foresight 3 VCT is still subject to shareholder and regulatory approval, but is expected to complete on 22 June. Merging the VCTs is intended to save costs and improve administrative efficiency, with management estimating the cost savings to be positive within one year. 

The resulting enlarged Foresight 4 VCT would be expected to have assets around £72.78 million, with around 25 portfolio companies.

Top 5 holdings

As at 31 December 2016 these were the top five investments of the 3 and 4 VCTs combined, with an estimate of what percentage of the net assets these would account for after the two VCTs are merged.

  • Datapath Group Ltd (computer video & graphics hardware) – 27.1%
  • Ixaris Systems Ltd (payments services) – 6.9%
  • TFC Europe Ltd (technical fixings and fasteners) – 6.0%
  • The Bunker Secure Hosting Ltd (IT data centres) – 5.9%
  • Procam Television Holdings Ltd (broadcast equipment hire) – 4.4%

Further details are available in the offer prospectus.

The 2017/18 offer for subscription

Please download the offer documents from this page a read carefully before you apply.

Amount and purpose of offer

The subscription offer aims to raise £50 million and could raise a maximum of £100 million if the overallotment facility is triggered. This could more than double the size of the VCT. The reasons given are to take advantage of Foresight Group’s overall deal flow, diversify the portfolio, fund the payment of dividends and buybacks, and meet annual running costs.

Initial charges

  • 5.5% initial charge, before Wealth Club saving
  • 0.5% discount for existing Foresight shareholders

Early bird savings of 2.0% and 1.0% on the initial charge are available (see Deadlines, below).

Deadlines

Unless the offer is fully subscribed before these dates, the following deadlines apply:

  • Deadline for early bird saving of 2.0%: 31 July 2017 (12 noon)
  • Deadline for early bird saving of 1.0%: 30 November 2017 (12 noon)
  • Deadline for shares allotted in the 2017/18 tax year: 5 April 2018 (12 noon)
  • Final closing date: 30 April 2018 (12 noon)

The details

Targeted Dividend
Discretionary
Initial Charge
5.5%
Minimum Investment
£3,000
Sector
Generalist
Deadline
31 Jul 2017
WealthClub Saving
5.0%

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