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Matrix sticks to what it knows

Matrix Private Equity Partners

Matrix Income & Growth 2 VCT C shares

Type: Generalist venture capital trust

Aim: To provide a regular and growing income stream, by way of tax-free dividends, and generate capital growth through portfolio realisations, the profits of which can be distributed as additional tax-free dividends

Minimum-maximum investment: £5,000 up to £200,000 for income tax relief of 30%

Offer price: estimated at 96.46p per share

Charges: Initial 5.5%, annual expenses cap 3.6% of net assets, performance fee may be charged

Commission: Initial 2.25% and renewal 0.375%

Tel: 020 3206 7222

Contact: www.matrixgroup.co.uk/fund_management

The C share offer from Matrix aims to raise up to £10m. Investment will be in unquoted companies as part loan and part equity, expecting to receive regular income and to generate capital gains from trade sales and flotations.

Hargreaves Lansdown investment research manager Ben Yearsley believes that in times of stockmarket turmoil, venture capital trusts are often overlooked. He says: “They are perceived as a high risk asset class and when all else around is falling investors tend to shun new investment.”

He believes that now is the time to be looking at investing in VCTs as access to finance is severely curtailed with banks not lending and flotations almost impossible. Small companies are finding that VCTs are one of the only routes to finance. “VCTs can essentially drive harder bargains and get bigger slices of the pie”, he says.

This Matrix product is a top up to an existing VCT and the original portfolio is approximately half in cash. Therefore, for Yearsley, the product already has critical mass and this assures that the investment will proceed.

He says Matrix will look to look to invest in profitable, established companies normally in a management buyout situation. Most deals are structured so that the majority of the investment into the underlying company is a loan and this helps reduce the risk and provides income to the VCT. In addition, he says the management are excellent and the charges standard.

Yearsley says that the Matrix product will be judged against its main competitors – the likes of Baronsmead, ProVen, Close and Acuity. These are all existing managers with generalist VCTs launched in the last few years.

He continues to say that if advisers and investors are considering VCTs this year, then the Matrix product “should be one of the ones you choose”. Reasons include the fact that the management team has a long track record of delivering success and performance. Also, Yearsley likes the fact that it does not take excessive risk. He says: “It sticks to what it is good at and does not change the model.”

BROKER RATINGS

Suitability to market: Good
Investment strategy: Good
Charges: Average
Adviser remuneration: Average

Overall 9/10


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