Foresight VCT

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This VCT is not currently open for investment, but we will update this page as soon as information on new offers becomes available.

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The longstanding Foresight VCT is is a generalist evergreen venture capital trust

Highlights

  • Dividend target of 5p (not guaranteed)
  • Minimum investment £3,000
  • Top performing VCT over the longer term (note: past performance is not a guide to the future).

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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.


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. This VCT benefits from all three areas, but the private equity team is primarily responsible for the portfolio. In total Foresight has £2.3 billion under management and 63 investment professionals. £275 million is invested in its range of VCTs. David Hughes is the Chief Investment Officer and is supported by nine others in the private equity team.

Target return and strategy

The annual target is is to pay dividends of at least 5p per share and grow the net asset value per share to approximately £1 per share. Long-term capital growth is also targeted. The type and stage of company into which Foresight invests fits in with this aim.

This VCT has had a strong dividend record in recent years, with the minimum dividend target achieved in each of the last five years. Please remember, dividends are variable and not guaranteed and past performance is not a guide to the future.

However, capital growth has been more muted. This can be largely attributed to an unsuccessful foray into environmental technology companies, which currently represent a small part of the existing portfolio.

The private equity team looks at five core growth sectors: Business Services, Industrials & Manufacturing, Technology, Media & Telecommunications (TMT), Consumer & Leisure, and Healthcare. Foresight’s private equity team looks for companies with a sustainable competitive advantage, defensible margins and a clear vision for growth  plus in each case a high-quality management team. The current invested portfolio is split as follows:


Foresight VCT sector split

Recent investments include include Idio, a content analysis platform for online activity; FFX, a company that supplies high quality hand power tools; Online Poundshop, launched by the founder of Poundland; Mowgli Street Food, a small chain of India-inspired restaurants. 

These new investments are aimed at fast-growing companies, already revenue generating, that want to expand their existing markets and attack new ones. Businesses are typically valued between £5 million and £15 million at the point of investment. 

Exit strategy

Exits in recent years include the refinancing of Datapath with a 3.7x return achieved so far; TFC Europe with a 1.64x return; Camwood with a 3.0x return and Aquasium that returned 1.6x. Remember, past performance is not a guide to the future.

Risks

As with most VCT portfolios the underlying companies are becoming earlier-stage businesses due to rule changes 18 months ago. At full subscription of £40 million, approximately half of the portfolio will be in cash awaiting investment, which could be a risk. However, the cash drag effect has been considered by the management and Foresight’s fee reduces if there is too much cash in the portfolio.

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

Fees

The manager receives an annual fee of 2% per annum plus an additional £110,000 each year. For cash held above £20 million in the VCT, Foresight will reduce the annual management fee to 1%. Foresight may receive deal arrangement fees. The total annual running costs of the VCT are capped at 2.4%, which is competitive.

How to invest

There is no current share offer, but you can register your interest now to be alerted as soon as VCT offers open.

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
-
Initial charge
-
Initial saving via Wealth Club
-
Net initial charge
-
Annual rebate
-
Funds raised / sought
-
Deadline
No current offer

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