The VCT aims to provide growth and income by investing in a diversified portfolio of Aim companies, or those to be traded on Aim.
While suitable qualifying investments are found, the money raised will be invested in non-qualifying investments comprising direct equity investments in small to mid-sized companies quoted in London, or those likely to seek a quotation within 18 months, government or investment grade corporate bonds and money market funds. The manager can also use derivatives.
This VCT raised £11.2m before expenses at launch in January 2005. It raised £15.5m before expenses in the 2005/06 tax year and £0.9 m before expenses through a placing to existing Shareholders last February.
All the money raised under previous share offers has been invested and the directors believe that bringing in new money will lower the running costs for existing investors and will push back the date at which the portfolio must comprise at least 70 per cent in qualifying investments.
The directors also believe that the benefits to new investor include access to an VCT which has an established track record and a mature portfolio.
New investors will have the same rights as existing investors including the same access to future dividends. The company has recently clarified its future dividend policy. It is the directors’ intention, providing NAV remains above 100p for each ordinary share, that in future years the VCT will pay proposed dividends totaling the higher of 6.25p per Ordinary Share, or half the earnings for each ordinary share.
The VCT rules allow most of the new money raised to be invested in non-qualifying part of the portfolio, allowing the existing funds to be invested in qualifying holdings under the previous rules. As a result, Noble believes that this fund raising should not significantly change the overall nature of the qualifying holdings.
This is a well-established VCT and is currently the only offer open to investors looking for an Aim VCT. Although the downturn in markets will make this a more difficult time for VCTs to attract investors, the advantage is that investors will be buying at an attractive level.
However, as smaller companies, Aim companies carry higher risks than investing in companies quoted on the London Stock exchange because they may have less mature businesses, a more restricted depth of management and often have limited product lines, markets or financial resources