Longbow looks at VCT merger after fund-raising problems

Longbow Capital is considering merging its income and growth VCT with an external VCT due to fund-raising difficulties.

The specialist healthcare VCT’s net asset value dropped from 94.5p at issuance of shares on April 6 to 91.94p on June 30, according to Longbow’s half-year accounts.

The VCT set an initial fund-raising target of £1m. While it raised an initial £1.16m, the accounts say: “We had hoped that we would have raised more but it proved to be an unexpectedly difficult year for VCT fund-raising. Several VCT offers were withdrawn because of a poor response.”

Longbow Capital partner Ron Petersen says: “The VCT was launched at the lower end in terms of fund-raising. We are considering continuing to fund-raise and merging it into another VCT outside of Longbow. In the next 60 to 100 days, it will become clearer.”

Hargreaves Lansdown inv-estment manager Ben Yearsley says: “Longbow has absolutely no chance of raising money in a second round of fund-raising. Why would inv-estors rush to invest when it has lost around 3p in the last three months.

“The board should be actively looking to take the contract away from Longbow to give it to someone with the credibility to raise enough money properly.”