View more on these topics

No ordinary VCT from Downing and NVM

Downing Corporate Finance and NVM Private Equity are raising up to £13.5m in ordinary shares for the Northern 3 venture capital trust.

This generalist VCT was established in 2001 to provide income and growth by investing manly in unquoted smaller UK companies. Money raised from this share issue will initially be invested in cash and near cash, including fixed interest securities managed by Sarasin & Partners, before suitable unquoted investments are found. Around 20 per cent will remain in cash and near cash to provide a reserve of liquidity.

The VCT will target a minimum annual dividend of 4p for each share, but this is not guaranteed.

The directors of the VCT say that an ordinary share issue will benefit both existing and new investors. Expanding the portfolio will provide current shareholders with increased diversity, lower fixed running costs because they will be spread over a wider asset base and potentially increase liquidity in the secondary market over the long term.

New investors will benefit from access to a mature portfolio from day one, unlike the use of other share classes to keep investment pools separate. The VCT’s ability to co-invest with the three other NVM VCTs and its investment trust also allows this VCT to take part in bigger deals.

NVM says that investment opportunities are attractive because unquoted companies that have survived the recession are in a stronger position to grow, and are more likely to turn to VCTs due to a lack of funding from the banks

It also thinks investors will turn to VCTs for retirement planning, as pensions are less attractive to high earners following recent legislation.

However, competition may come from other generalist VCTs, such as Baronsmead, and limited life VCTs.

Recommended

ROS_ALTMAN.jpg
11

Pensions in the wilderness

Ros Altmann declares that politics is bereft of pension ideas and innovation and the only way to resolve the crisis is to completely overhaul the system and bring in a flat-rate residents’ pension. Interview by Gregor Watt

Moss takes on interim MD role at Friends

Friends Provident has appoin-ted Nathan Moss as UK managing director on an interim basis to replace Simon Clamp due to serious illness. Moss started at Friends Provident last month. He ran Lloyds TSB’s wealth management business and was managing director of marketing and distribution at Scottish Widows between 2002 and 2006. A Friends Provident spokeswoman […]

3

Hargreaves Lansdown says RDR will not cut Omo take-up

Critics have disputed claims that the retail distribution review will reduce the use of the open market option for annuities. Last week, Fitch Ratings said the fact that customers would be faced with explicit fees for advice will drive some towards cheaper, restricted advice or no advice at all. It said this was likely to […]

Davies: People need all sorts of different things depending on their age, disability or care need

Care necessities

Chief executive Barbara Davies talks about being a one-stop shop for advice and linking up with Tim Eadon at Better Retirement. Report by Lee Jones

Managing customers in drawdown

By Lorna Blyth, Investment Marketing Manager Delivering a decent drawdown review process takes time and resources. This article looks at how you can manage drawdown clients in a more cost-effective way. Most advisers are seeing an increase in drawdown clients following pension freedoms. Often these are clients with lower fund sizes, which means advisers are […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment