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JOHCM puts C in VCT

JO Hambro Capital Management is looking for up to 5m for a C share top-up issue for the leisure & media venture capital trust.

This VCT was established in 2001 and initially raised 8.6m net of expenses, which it invested in 11 leisure companies and one in the media sector. Current holdings include Nu Nu and Tomahawk pubs, which have been individually accessible by way of enterprise investment scheme offerings.

Money awaiting investment in suitable companies will initially be invested in a portfolio of treasury securities. JOCHM will then use the additional money to expand and diversify the existing VCT portfolio, although leisure companies are still likely to dominate the portfolio because JOCHM believes the most attractive opportunities will be found in this sector. The company also feels the enhanced income tax reliefs introduced by the Finance Act 2004 will make the VCT appealing.

The VCT is managed by North Atlantic Values Maarten Hemsley who has over 10 years experience in private equity investing. North Atlantic Value, which was established in 2003 and is part of the JOHCM Group, specialises in private equity and small cap investing.

Hemsley will work with chartered surveyors HLL Sumberts Leisure, a company which specialises in the leisure industry. This relationship will form the basis of the identification of suitable investment opportunities, particularly established businesses with proven track records and asset backing.

While businesses with proven track records and asset backing are lower risk, this VCT is concentrated in a couple of sectors, so if these industries perform badly, the VCT will not be able to invest in other sectors that are performing well.

Data from Trustnet shows the leisure & media VCT produced a negative return of 24.2 per cent in the three years to November 25, 2004, while the other VCT in the media sector, Proven media, returned 6.8 per cent during the same period. Trustnet ranks the leisure & media VCT 36th out of 64 VCTs across all sectors over this period while the Proven media VCT is ranked 19th.

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