Puma VCT 13

Puma VCT 13 is a limited life VCT from a seasoned manager that aims to wind up and distribute income and capital to shareholders after seven to nine years. It is raising up to £5 million. 

Highlights

  • Limited life VCT with an expected lifetime of seven to nine years
  • Aims to generate stable returns for investors from 2020 – not guaranteed
  • Aims to invest in established, income-yielding growth companies 
  • Sector agnostic
  • Targets an average dividend equivalent to 5p per annum from 2020 onwards (not guaranteed)
  • 0.10% annual rebate for three years through Wealth Club
  • Minimum investment £5,000

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.

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The manager

The Puma VCTs are managed by Puma Investments, a highly experienced limited-life VCT manager. This is the thirteenth Puma Limited Life VCT.  Over £230 million was raised for Puma VCTs to date – and over £130 million returned in dividends, although please remember dividends are not guaranteed and past performance is not a guide to the future. 

Like previous Puma VCTs, Puma VCT 13 will aim to invest in companies with assets, such as freehold property, or contracted revenue streams, to enable the VCT to be wound up after a certain period of time. It will also seek to invest in growth businesses with strong management teams. It is considered a lower-risk VCT as a result, compared to its generalist VCT peers. However, remember it still invests in unquoted and small companies so your capital is at risk: you should not invest money you cannot afford to lose. 

Watch an exclusive video interview with Hugh Rogers of Puma Investments:

Strategy

The Puma 13 VCT will aim to invest in businesses with assets such as freehold property. This means that should the underlying firms not perform as anticipated, the VCT has some security over the assets which can be realised to provide value for investors. Investments will be structured in the form of ordinary equity together with loan notes. 

The Puma 13 VCT is sector agnostic. It typically avoids start up and early-stage investments, as well as high-growth but high-risk sectors such as biotech. The investment team looks for well managed, established, unquoted companies which are expected to be revenue generating with limited external debt. Puma has a strong pipeline of new deals, thanks to the difficulties SMEs continue to face raising money from traditional banks and its established network of deal introducers.

The VCT is expected to hold 8-15 qualifying companies, dependent upon the level of funds raised. 

Funds will be invested in qualifying deals over time. Pending investment, the manager may invest funds in a range of non-qualifying investments. These will include cash, money market funds and listed debt and listed equities.

Examples of portfolio companies held by previous Puma VCTs


Puma 13 VCT - Brewhouse and KitchenBrewhouse & Kitchen

Puma made a £3.1 million investment into a micro-brewery pub business to support the roll-out of the brand across the UK (in December 2012). The Brewhouse & Kitchen (B&K) business has continued to expand and is currently running the concept at 20 locations. All B&K branded pubs brew a significant volume of their own beer on site and have a quality food offering. The transaction was successful and the Puma VCTs exited in October 2015. 

Puma VCT 13 – Back to the Garden ChildcareBack to the Garden Childcare

Puma made a £2.2 million investment to fund the development and initial trading of a new 120 place children’s day nursery in Altrincham, South Manchester, due to open in August 2018. 

It is a joint venture between experienced developer and contractor, the McGoff Group, and Stewart and Jeannie Pickering, previously founders of a successful chain of children’s nurseries, kidsunlimited. Kidsunlimited was founded in 1983 and sold to private equity group LDC in 2008. By that point, the Pickerings opened more than 50 nurseries and introduced the first on-site workplace nurseries in the North West for firms including HSBC.

Target returns

There is a target dividend of 5p per share, payable from 2020. Puma will aim to ensure the VCT can be wound up and the remaining capital and income returned to investors after eight to ten years from the closing date of the offer, although there is no guarantee of this. 

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. 

Tax rules can change and benefits depend on circumstances.

VCTs can now only invest new money in growth capital deals. Management buyouts, replacement capital deals and investments in mature companies are no longer permitted. This results in considerably higher risks

The risks and investment objectives are different with each VCT, but with a significant proportion of the combined portfolios invested in property-owning businesses, investors are likely to be exposed to commercial property.

Fees and charges

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

Full initial charge 3%
Wealth Club initial saving 1%
Net initial charge through Wealth Club 2%
Annual charge 2%
Annual rebate (for three years) 0.10%
Performance fee 20%

More detail on the charges

Annual rebate when you invest through Wealth Club

The Puma VCT 13 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.

Share buy-backs

The Company may operate a buy back policy at a 5% discount to their net asset value (after five years from the investment). Please see the offer documents for details.

Dividend Investment Scheme 

There will be no dividend re-investment scheme. 

Deadlines

The deadline for shares to be allotted in the 2018/19 tax year is 5 April 2019. 

Our view

Puma VCT 13 is unlikely to deliver stellar returns – indeed, it’s not designed to. It is structured to enable the VCT to be wound up after seven to nine years, with the remaining funds returned to investors. The initial tax break forms the majority of the return, and the underlying investments are likely to be in property-owning businesses, to mitigate downside risk. The Puma team is very experienced in this style of VCT management. If you’re interested in a limited life VCT this is one to consider. 

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. 06.08.2018


Read important documents and apply

The details

Type
Limited Life
Target dividend
5p from 2020
Initial charge
3%
Initial saving via Wealth Club
1%
Net initial charge
2%
Annual rebate
0.10%
Funds raised / sought
£2.7 million / £5 million
Deadline
5 Apr 2019

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