Former Acuity VCTs lose 70 per cent in value

Foresight 5 VCT and Acuity 3 VCT have lost 70 per cent of their net asset value, according to the half-yearly reports.

Foresight 5 VCT, formerly Acuity Growth VCT, has suffered a 67 per cent drop in value from the published accounts dated September 30, 2010, a reduction of funds under management from £32.1m to £10.6m.

Acuity 3 VCT has suffered a 70 per cent drop in value from the published accounts dated September 30, 2010, equating to a fall of funds under management from £21.3m to £6.4m.

Funds originally raised for the Acuity VCTs were £94m. They are now valued at £17m.

BestInvest senior research analyst Ben Seager-Scott says: “We are in close discussion now with the management at Foresight and are asking quite rough and detailed questions about what is going to happen in the portfolios. There is a question mark over the valuation method used by Acuity.”

Hargreaves Lansdown investment manager Ben Yearsley says: “Unfortunately, the state of the portfolios has been found to be in a worse condition than previously envisaged with three companies (held in both VCTs) failing.

“Foresight was presented with substantial cash demands from these companies as soon as they took over management of the portfolio, but with little cash or realisable investments remaining in the VCTs there was nothing that could be done to prevent these firms from going under.”

A Foresight spokesperson says: “After detailed and considered analysis of the two portfolios which largely overlap, there has been a rationalisation of the two Acuity VCTs which has resulted in a number of changes. The Foresight team has worked hard with the remaining investee companies and with careful management going forward, Foresight believes the net asset value of each VCT can be increased and investor confidence can be rebuilt.”