Investors who use this new facility must ensure the minimum total investment of £3,000 is met by July 31, 2011. Ingenious believes this option will be attractive to regular savers and to investors who have been hit by the recent tax changes to personal pension contributions.
The Ingenious entertainment VCTs invest in unquoted UK companies that create and market media and entertainment content including live events such as festivals and comedy shows, TV broadcasting, exhibitions and entertainment venues.
As established VCTs, Ingenious entertainment VCTs 1 and 2 have built up a track record with events such as the Creamfields and 80s Rewind festivals.
The E and F share classes differ in how they make non-qualifying investments. The E shares hold low-risk cash funds while the F shares take a step up the risk ladder to target higher returns by investing in a balanced multi-asset portfolio managed by Ingenious.
The VCTs will invest in companies with the with the aim of building a brand with increasing profitability each year that can be sold to a third party, which should provide liquidity for investors. Risk to investor’s capital will be limited by the requirement that each company the VCTs invest in has pre-sales or similar minimum revenue arrangements covering at least 75 per cent of the VCTs’ investment.
Each company must also have an experienced producer or promoter with a proven track record and relevant insurances in place to protect against the usual industry risks.
The use of E and F share classes as a way of meeting different risk profiles and the ability to make monthly installments are innovative features that may attract investors. However, potential investors must be prepared for the higher than average risks that come with venture capital, despite the steps taken by Ingenious to manage risk.