The start of VCT season has arrived with a bang, as Gresham House-run Mobeus has launched £90m in share offers for two of its venture capital trusts.
The two VCTs have total net assets of £343m and a combined portfolio of about 50 companies, ranging from early-stage companies with almost no revenue to later-stage, profitable businesses.
Over the last five years, the VCTs have generated a total return on their underlying asset of 71.2 per cent, and recently increased their dividend target to seven per cent of underlying assets.
The two trusts, Mobeus Income & Growth VCT and The Income & Growth VCT are very popular with investors. When they last opened in October 2022, they raised £45m in the first 24 hours, leading to a total fundraise of £76m.
“The portfolio has also seen a fair amount of turnover as older, legacy investments have been sold,” said Nicholas Hyett, investment manager at Wealth Club, noting that 19.5 per cent of the VCT portfolio was now in a single company, Presevica.
“There’s a lot to like about Preservica, its digital archive platform is used by thousands of organisations globally, from the National Archives to HSBC, and operating in a niche segment bodes well for future margins. However, the VCTs’ very large exposure to a single company does make it riskier,” Hyett added.
Earlier this year, Mobeus merged two of its funds, Mobeus Income & Growth 2 VCT and Mobeus Income & Growth 4 VCT, into Mobeus Income & Growth VCT and The Income & Growth VCT, respectively.
The VCTs have also closed a series of new deals in recent months, including a £6.3mn investment into data governance and cyber incident firms ActiveNav and Actfore, and an £8.5m investment into open banking specialist Ozone API.
“Since 31 March 2021, the Mobeus VCTs have achieved total cash proceeds of £137.5m over an original cost of £49.5m and have realised cumulative gains of £88m from nine full realisations and two partial realisations,” said Trevor Hope, manager of the Mobeus VCTs.
“The opportunity set in our investable universe has expanded significantly. This share offer presents a compelling chance for both new and existing investors to support the next wave of UK businesses at the forefront of this transformation whilst benefitting from the attractive tax reliefs of investing in VCTs.”