View more on these topics

Spirit of adventure

NOBLE & COMPANYUniVen VCTType: Venture capital trustAim: Growth by investing in spin-out companies from UK universities and other early stage intellectual property-based companiesMinimum investment:Lump sum £2,000Closing date: April 4, 2005 for 2004/05 tax year, June 30, 2005 for 2005/06 tax yearCharges: Initial up to 5.5%,annual up to 3.5%Commission: Initial 3% or initial 2.25% plus renewal 0.375%Tel: 020 7763 2200The UniVen VCT is a venture capital trust that invests in university spin-out companies and other early-stage intellectual-property-based companies in the technology sector.

Michael Philips proprietor Michael Both feels that this VCT has the true spirit of adventure. He says: “It has the facility for the reinvestment of dividends for investors who are purely interested in capital growth. The low minimum investment of £2,000 makes it easier for a typical investor to diversify his or her VCT budget.”

Both likes the fact that the directors appear to have very relevant experience in the fields in which the company will be investing.

He says: “As a pure technology trust being launched after the technology bubble has fully deflated, shareholders can hope that the managers will have the pick of investments on favourable terms.”

Turning his attention to the potential drawbacks, Both says: “Considering the years of experience of Top Technology, the front-line managers of the VCT, the stated internal rate of return on a capital-employed basis for past ventures is good but not outstanding.”

He also thinks that there are a lot of layers of management fees for such a small company, which he fears is more likely to dilute the return to the shareholders than enhance it. However, in fairness to UniVen, he concedes that this is not an unusual situation.”

He says: “As with all venture capital trusts, the managers need an incentive. At 20 per cent of any excess above dividends of 7p per share after four years, what concerns me is that there is no concomitant requirement for the net asset value to be at least 100p. This potentially leaves shareholders’ capital dangerously exposed, especially since the value of holdings can fluctuate wildly.”

BROKER RATINGSSuitability to market: GoodInvestment strategy: GoodCharges: PoorAdviser remuneration: AverageOverall 6/10

Recommended

Digest

ASB publishes accounting regimeThe Accounting Standards Board has published a standard accounting regime which builds on the FSA’s new regulatory capital regime for with-profits, introduced in November 2004. The standard, which will increase the transparency of with-profits funds, will be introduced in December 31, 2005.

Warning that Sipp clients will snub wraps

Wrap providers’ ability to take advantage of the natural restructuring of pension investment ahead of A-Day will be limited because many do not offer fully integrated pension facilities, says financial research company Defaqto.

Abbey launches six month fixed-rate mortgage

Abbey launches a six-month fixed rate mortgage at 4.54 per cent on its Flexible Plus Mortgage.It will be available from December 15 2004.It has no extended tie-in if borrowers decide it’s no longer the right mortgage for them. Key features include guaranteed tracker at the end of the fixed rate of 0.75 per cent above […]

Digest

LSE turns down £1.35bn offerThe London Stock Exchange has turned down a £1.35bn offer from German rival Deutsche Bourse. The LSE says the offer undervalued the business but it will continue to hold talks with the Frankfurt-based operation to see if an improved offer is likely.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com