Matrix Money Management is sponsoring a top-up share issue for the Foresight technology venture capital trust.
The directors of the VCT, which was established in 1997, aim to raise up to £3.5m to make further investments in information technology, communications and technology-based manufacturing companies. This could mean a second round of investing in companies already in the portfolio or the addition of other companies to spread investment risks and administration costs. Priority will be given to existing investors before the offer becomes available to the general public on October 14, 2003.
The investment adviser for the VCT is VCF Partners which has 16 years' experience of technology investing. VCF Partners focuses on developing technology companies with the potential to grow rapidly. Its directors believe technology drives economic growth and as the economy recovers, technology companies will benefit. They will look for companies that can distinguish themselves from their competitors through factors such an experienced management team and innovative products.
Recently, the VCT realised a £900,000 profit for its ordinary shareholders by selling 40 per cent of its holding in Telecom plus and a flotation is being considered for another holding, Advanced Composites Group. This company manufactures carbon fibre materials for Formula One cars, aerospace components and sports equipment.
One of the main benefits of VCT investing is capital gains tax deferral, but dismal performance within equity markets has reduced the likelihood of investors needing a CGT shelter. This means the investment proposition of a VCT must be good enough to tempt investors back into the market, rather than relying simply on its tax advantages.
The Foresight technology VCT carries higher risk than generalist VCTs because it is focused on one sector. However, the rewards could be high if investee companies fulfil their potential and exit opportunities can be found to realise the profits.