Matrix Money Management intends to raise up to £35m for the Foresight 2 VCT, a venture capital trust that aims for growth by investing in unquoted technology-based companies in the UK.
The money raised by this offer will initially be invested in money market funds while suitable VCT investments are found. Around 80 per cent will be invested in qualifying companies in the next three years, with the rest remaining in money market funds for liquidity purposes.
The investment adviser for the VCT is VCF, an experienced technology investor which has managed venture capital portfolios for 20 years. The company currently advises on the Foresight technology VCT, established in 1997, and is co-adviser to the TriVest VCT.
VCF believes technology valuations are more realistic than they were in the late 1990s and that the investment environment has improved since then. Its experience and track record mean companies looking for investment will often contact VCF directly, or opportunities are found through VCF's network of contacts.
VCF will be looking for companies that depend on scientific or technological skills, or companies which have a technological advantage. The companies must show they can distinguish themselves from their competitors through factors such an experienced management teams and innovative products The ability of companies to sustain their competitive advantage and their growth prospects will be carefully considered. Investment of between. £250,000 and £1m will be made in each company and the VCT can also co-invest alongside other funds managed by VCF.
The portfolio will be diversified across companies at different stages of development and sectors within the technology field such as IT, communications and manufacturing technology. Although this diversity will help reduce risks, the VCT is still investing in one broad sector which makes it a more specialist, higher-risk investment.
However, as many businesses in all industries are dependent on technology, returns will also be high for investors if the underlying companies grow successfully.