Venture Capital Trusts
Maven's six generalist VCTs each aim to provide an attractive level of regular tax-free income from a portfolio of up to 50 established UK private companies, diversified across a range of sectors and throughout the UK regions.
Private Equity is increasingly recognised as one of the main classes of alternative asset within a diversified investment portfolio. For investors and advisers considering investing, whether primarily for the potential returns or its merits as part of a portfolio allocation, investing with Maven is an attractive option.
Private Equity is largely uncorrelated to prevailing main market volatility, and offers investors the opportunity to generate greater long-term returns than are available through many other asset classes. Whilst investment in private businesses carries a higher risk than investment in listed companies, it also offers the clear potential for higher returns.
Our approach to Private Equity
Maven’s core objective is to create value for investors, investing across a broad range of industries, in private companies that are available at attractive entry prices, have strong core charactertistics such as offering a sector-disruptive business model, and there is significant growth potential over a period of three to five years.
These are ambitious businesses led by talented people, who can demonstrate a blend of vision and business flair, alongside a differentiated and competitive proposition. The management team of a private equity-backed business will also typically be highly incentivised through the transaction structure in order to achieve healthy returns for its investors.
The Maven approach is to understand not only the numbers, but also the commercial issues facing portfolio companies. A key objective for Maven’s team is to provide high quality investment 'aftercare' to each business. Post investment, Maven executives will help the management team define and evolve its strategic plan, appointing new senior executives where appropriate and normally taking a seat on the board.
In this way Maven can provide strategic and operational input, to support the continued growth of the business and achieve the optimum exit value for all investors.
A VCT is an investment company whose shares are listed on the London Stock Exchange. Maven is the Investment Manager for each of the Maven VCTs, and in providing the information on this website is acting solely for the Companies and for no-one else.
The principal activity of VCTs is investing in smaller companies that are seeking capital, where those underlying investments must be predominantly in businesses which meet specific qualifying conditions, in order that investors can retain the associated investor tax benefits.
Investment in new VCT shares offers significant advantages for UK tax-paying investors, including 30% income tax relief and tax-free dividends. VCTs are principally aimed at investors who understand the nature of smaller company investment, can afford to take a longer term view and accept that the value of their investment can go down as well as up.
There is the potential for significant rewards from investment in high growth smaller companies, but there is also more risk attached to owning such shares than there is with larger companies.
Whether purchased through new issues or on the open (secondary) market via a broker, VCT shares offer significant advantage for tax-paying investors:
- Income Tax relief of up to 30% on subscription (only for new shares)*
- Dividends free of Income Tax, whether shares are bought new or on the secondary market
- Profits made on the disposal of VCT shares are free from Capital Gains Tax, whether shares are bought new or on the secondary market
- There is no minimum holding period for purchases of shares on the secondary market
*Available on a maximum investment level of £200,000 in the tax year, and restricted to the amount which reduces the income tax liability to zero for the year of subscription. In order for the initial tax relief to be retained, the shareholder must hold the new shares for at least five years after investment.
Well managed VCTs offer the potential for significant and rising levels of income, through the payment of twice-yearly dividends to shareholders and long term growth in shareholder total return resulting from the profitable realisation of assets.
VCTs can provide tax-efficient access to well-researched private company assets, as part of a broadly-based investment portfolio. Established VCTs will typically invest in between 25 and 40 private companies, to create large and highly diversified portfolios.
With over 150 years’ collective experience of investing in UK private companies, the Maven team has a proven approach to managing the risk associated with private company investment, while maximising the potential for tax-free income and capital gains. Key strategies include:
- a rigorous investment selection process
- a policy of investing only into well established businesses with substantial revenues and profits
- each private company investment being structured with a substantial element of secured high-yielding loan notes
- active involvement with investee companies post-investment.
For our VCTs, risk is further mitigated by diversifying each portfolio across a wide range of industry and geographic sectors, with typically no more than 4% of the fund (at time of investment) committed to any one holding.
VCT shares should be seen as a long-term investment. A VCT’s underlying investments will normally be in unlisted companies whose securities are not publicly traded and are therefore likely to be illiquid and carry substantially higher risk than investments in larger, listed companies. The value of VCT shares, and the level of income derived from them, may fall as well as rise and investors may not get back the money originally invested. Existing tax levels and reliefs may change and the value of reliefs depends on personal circumstances. For further risk information click here.
VCT shares can be traded just like any other shares listed on the London Stock Exchange. Maven cannot advise on the sale or purchase of VCT shares. If you are interested in buying or selling shares you should contact your broker/adviser and request that they contact Shore Capital Stockbrokers Limited (Tel: 020 7647 8132), the principal market maker.
Existing VCT shares (i.e. those purchased in the 'secondary market') can offer an attractive and tax-efficient investment opportunity for a higher rate tax-payer or any income-seeking investor.
Whilst investment in existing VCT shares does not offer the initial tax relief that is available on investment in new issues, those shares nevertheless attract significant tax benefits:
- Dividends are tax-free
- No capital gains tax is payable on the sale of shares
- There is no tax-related five year minimum holding period.