Maven VCTs

The four Maven VCTs are established and well diversified trusts which primarily target regional unquoted businesses.

The VCTs all follow the same broad strategy and have combined net assets of £268.3 million (December 2023) spread across a portfolio of private and AIM-quoted companies, legacy assets, and investment trusts. 

Over the five years to 31 December 2023, the VCTs produced a NAV total return (including dividends) ranging from 10.8% to 16.8%. Past performance is not a guide to the future.

• Seeking to raise up to £20 million plus a £10 million overallotment facility 
• Target annual dividend yield of 5% of NAV – variable, not guaranteed
• Available for the 2024/25 tax year
• Minimum investment £5,000 (minimum £1,000 per VCT) – you can apply online
• Deadline: 26 April 2024 (5pm) for allotment in 2024/25 tax year

The manager

Maven Capital Partners (“Maven”) is a highly regarded fund manager, which manages a total of £817 million (May 2023).

In May 2021, Maven was acquired by Mattioli Woods Plc, the AIM-quoted national wealth and asset management business, but continues to operate as an independent subsidiary and retains its original model.

Maven invests in the regions as well as in London and the South East. It has nationwide coverage through its network of 13 regional offices, allowing it to see and take advantage of opportunities its peers might not come across. Maven also manages funds for the British Business Bank and the Scottish Government. 

Maven has a nationwide team of more than 25 investment and portfolio executives involved in sourcing, executing and managing VCT investments. 

Maven and its executives have previously invested around £5.3 million, in aggregate, in the Maven VCTs. Maven executives and the directors of the VCTs intend to invest at least £495,000, in aggregate, into the offers, to reflect their ongoing confidence in the long-term prospects of the VCTs. 

Investment strategy 

Maven’s investment team applies the same broad investment strategy across all its VCTs. It targets established, entrepreneurial businesses, led by proven management teams Maven believes have robust growth prospects. It concentrates on companies in defensive or counter-cyclical sectors with recurring or contractual revenue and which it can access at attractive entry multiples. 

The VCTs focus primarily on unquoted investments but will consider AIM opportunities as well. These two asset classes have different return profiles and could therefore provide balance and diversity to the portfolio. 

Maven’s UK-wide coverage, resources, and regional debt and equity funds enable it to access a variety of private company opportunities. 

Every transaction goes through a structured three-stage investment approval process, led by the relevant Maven regional deal executives and supported by the collective knowledge and expertise of Maven’s UK-wide team. Managing partner Bill Nixon, who leads the investment committee, has the final say on new investments. 

Typically, Maven invests between £1 and £5 million per deal in total, with each VCT participating in each transaction. 

Maven also employs a liquidity management policy for cash balances within each VCT. Rather than hold a large cash balance, which may dilute returns, each VCT invests in a small portfolio of non-qualifying, listed private equity investment trusts.

Current portfolio overview

The Maven VCTs usually co-invest, so they have similar underlying portfolios with comparable asset allocation and sector exposures. 

The VCTs are well diversified, with an average of more than 100 underlying holdings per VCT. The portfolios have a bias towards private companies, with AIM exposure being reduced significantly in recent years (currently 3-7%). To manage liquidity, the VCTs have an allocation to a variety of private equity and infrastructure investment trusts as well as open-ended funds, that are typically invested in money markets. 

The Maven VCTs continue to transition away from later stage management buyout investments made prior to rule changes in 2015, albeit at a slower pace than other VCTs, on average 16.8% remains invested in pre-2015 deals.

Asset allocation as % of net assets

Sector breakdown – portfolio (%)

Examples of portfolio companies

Horizon Cremation – largest holding

Founded in 2015, Horizon Cremation is a developer and operator of modern crematoria in areas of the UK, where current facilities are overstretched. 

Horizon’s crematoria are built using distinctive designs with each site meeting the latest environmental standards and offering enhanced levels of care for families.

The company operates three sites, each trading ahead of plan. Management considers there to be a good pipeline of opportunities at various stages of the approval process. The business also aims to achieve net zero status by 2025. 

Maven first invested in May 2017 and Horizon is the now the largest holding across the VCTs with a combined position of £10.4 million, on an investment cost of £5.2 million, equivalent to 3.9% of net assets (December 2023). Past performance is not a guide to the future.

Manufacture 2030 – recent investment

All businesses are under pressure to significantly reduce carbon emissions – both their own and across their supplier networks. Manufacture 2030 (M2030), founded in 2018 with its name inspired by the UN Sustainable Development Goals, provides tools for corporates to reduce emissions across complex global supply chains. 

M2030’s platform helps corporates measure each supplier’s environmental impact, monitor and manage each supplier’s emissions against baseline data and reduction targets, and identify any gaps and provide expert support and solutions to help suppliers to achieve their goals. The platform currently supports thousands of suppliers in over 70 countries, with an emissions reduction dataset of over 500 actions, tips, and case studies. 

The business counts the likes of Asda, Toyota, GSK, Ford, Bayer, and Reckitt amongst its clients.

Maven led a £5 million funding round for the company in March 2023 alongside the Amati AIM VCT. 

Exit track record

Since January 2020, Maven has completed 20 exits from private companies in which one or more of the Maven VCTs invested, through trade sales and secondary market disposals to private equity buyers. Of those realisations, 13 have been profitable with an average multiple of 1.94x cost. 

Quorum Cyber – example of previous exit

The UK has a competitive cyber security industry with over 1,000 security firms active in this space. The rapid growth of this sector has been attributed not only to the increased threat and sophistication of cyber-attacks but also growing awareness within companies to protect from and prevent vulnerabilities. 

Quorum Cyber Security (“Quorum”) set itself out as a market leader by offering its customers a wide range of professional and managed security services. This includes preventative measures such as attack simulations and setting defensive standards to specialist forensic and investigatory services for companies that may have suffered a breach. 

The Maven VCTs led the company’s Series A investment round, alongside the Scottish Investment Bank, in July 2020. Eighteen months later, Quorum was acquired by a UK private equity house, delivering an overall return of 6.5x cost to the VCTs, including a retained minority position in the business. Past performance is not a guide to the future.

ADC Biotechnology – example of previous failure

As is to be expected, not all investments work out, one example is ADC Biotechnology, 

Founded in 2010, the company specialises in antibody-drug conjugate (ADC) discovery and development. ADCs are a form of therapeutic treatment which destroy harmful cells through selective targeting. This means that, unlike traditional therapies, ADCs can be both highly potent and specific, protecting healthy cells and limiting side effects. 

Maven first invested in 2017 and later took a provision against the holding in 2020 following regulatory issues with the company’s new facility. The business was then acquired by Sterling Pharma Solutions in March 2021, resulting in an average weighted return of 0.28x for the VCTs. 

Performance and dividends

Over the five years to 31 December 2023, the VCTs produced a NAV total return (including dividends) ranging from 10.8% to 16.8%. Over the same period, the VCTs paid dividends equal to between 24.4% and 25.4% of starting NAVs. Past performance is not a guide to the future, dividends are variable and not guaranteed. Note, we show VCT returns over a five-year period as a minimum, where possible. Where a VCT has followed the same investment strategy for longer, we also show returns over 10 years.

The Maven VCTs aim to pay an annual dividend that provides a yield of up to 5% of NAV per share (at the previous year end). Dividends are variable and not guaranteed.

NAV and cumulative dividends per share over five years (p)

Dividend payments in the calendar year

Dividend investment scheme

There is a Dividend Reinvestment Scheme that allows shareholders to reinvest future cash dividend payments in new shares if desired. As these are new shares they should be eligible for tax relief (you will need to claim this on your tax return or directly with HMRC) and the shares will count towards the VCT annual subscription limit.

Share buyback policy

The board of each VCT intends to buy back shares at up to a 5% discount to the prevailing net asset value. This is not guaranteed – please see the offer documents for details. 

Discount history

VCT shares are traded on the London Stock Exchange. Similar to investment trusts, the share price can fluctuate and can be different from the VCT’s net asset value (NAV), i.e. the value of the VCT’s underlying investments. The difference between the share price of a VCT, and its net asset value per share, is called a discount.

Based on data from Morningstar, the average discount to NAV as at 31 December 2023 was -4.78%. Over the previous five years the average discount to NAV was -7.20%.

The discount history is based on the closing share price of the VCT at the end of each month, divided by the latest net asset value at the time. Past performance is not a guide to the future. Investors looking to sell their VCT shares may get a better price using the VCTs’ share buyback facilities, although this is not guaranteed.

Risks: important

This, like all investments available through Wealth Club, is only for experienced investors happy to make their own investment decisions without advice. 

VCTs are high-risk so should only form part of a balanced portfolio and you should not invest money you cannot afford to lose. They also tend to be illiquid and hard to sell and value. Before you invest, please carefully read the Risks and Commitments and the offer documents to ensure you fully understand the risks. 

To retain the tax benefits, VCTs should be held for at least five years. If you sell VCT shares and reinvest in new shares of the same VCT (including any mergers) within six months, tax relief can be restricted. Tax rules can change and benefits depend on circumstances.

The VCTs have some exposure to AIM. AIM shares can be very volatile and could suffer extreme volatility if the market falls sharply. The difference between the buying and selling price of AIM-quoted companies is often wider than those listed on the main market. 

Charges and savings

A summary of the main charges and savings is shown below. The net initial charge shown includes the Wealth Club saving and any early bird discount. The investment may have additional charges and expenses: please see the provider documents including the Key Information Document for more details, offer price and share allotment calculation methodology.

Please note, capacity – for the offer or any early bird savings – can be reached early, and we may not be notified of this by the VCT in real time.

Annual rebate when you invest through Wealth Club

The offer 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 a percentage (shown in the table above) of the net asset value of the offer shares issued to you when you invest. Terms and conditions apply. 

Deadlines

• Deadline for allotment in 2024/25 tax year – 26 April 2024 (5pm)
  

Our view

In our view, Maven is a well resourced and experienced investment manager. Its large team is spread across the UK in regional hubs. This presence helps Maven integrate into local venture networks where it can access deals others may not come across. In addition, Maven’s regional debt and equity funds open up proprietary investment opportunities as well as the potential for joint funding outside the VCT mandates.

Maven’s strong deal pipeline and co-investment capabilities have helped it develop sizeable portfolios across all four VCTs. The holdings are diverse, a mixture of unquoted, quoted, and non-qualifying companies, and focus on sectors the investment team considers defensive or counter-cyclical such as software, data analytics, and healthcare. Maven believes this can offer some resilience during periods of market uncertainty. This appears to have been the case through 2022 and 2023, although past performance is not a guide to the future. The VCTs’ AIM and investment trust holdings have been subject to significant volatility, although the AIM exposure has been reduced markedly in recent years.

The Maven VCTs have a highly diversified and relatively defensive approach, with no holding currently accounting for more than 3.9% of the portfolio, which may appeal to investors. Please note, as with all VCTs, the Maven VCTs should be viewed as a high-risk investment. 

Wealth Club aims to make it easier for experienced investors to find information on – and apply for – investments. You should base your investment decision on the offer documents and ensure you have read and fully understand them before investing. The information on this webpage is a marketing communication. It is not advice or a personal or research recommendation to buy any of the investments mentioned, nor does it include any opinion as to the present or future value or price of these investments. It does not satisfy legal requirements promoting investment research independence and is thus not subject to prohibitions on dealing ahead of its dissemination.