albion vcts top up offers 2017/2018 · albion capital does not provide advice to, ... • portfolio...
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Albion VCTs Top Up Offers 2017/2018
£32 million offers for subscription to subscribe for new shares in 5 existing VCTs
January 2018
This presentation is issued by Albion.
This presentation is not a prospectus but is an advertisement and investors should not subscribe for any shares referred to in this presentation except on the basis of information in the Prospectus approved by the VCT boards. The Prospectus including Securities Note, Summary, Registration Document and Application Form are available on the Albion Capital website (www.albion.capital) and will exclusively form the basis of any application.
A comprehensive list of risk factors is detailed in the Prospectus and an investment should not be considered until the risksare considered fully. Albion Capital does not provide advice to, or ensure suitability in respect of any of its investment funds. The information relating to tax in this presentation should not be construed as tax advice. Current tax levels and relief areliable to change. Investors should consult their own tax adviser in relation to their individual circumstances.
This presentation is provided on a confidential basis and accordingly should not be passed, distributed, published or reproduced in whole or in part or disclosed by the recipient to any other person, whatsoever.
Albion Capital is authorised and regulated by the Financial Conduct Authority. Albion Capital acts exclusively for the VCTs and for no-one else. Investors in the VCTs will not be treated as regulatory customers of Albion Capital.
CONFIDENTIAL
• VCTs and the market
• Implications of Budget Statement
• The offers
• The investor
• Costs
• The portfolio
• The manager and track record
• Recent deals
• Current sector themes
AgendaOne of largest VCT managers, founded in 1996, c.£1bn under management. Albion Group employs c. 40 staff.
Data as at August 2017
• Introduced in 1995 to encourage investment into smaller UK companies
• Government made them attractive by giving generous tax breaks
• 9 VCTs launched in 1995
• Market has grown to 71 VCTs with 27 managers
• VCTs have raised over £6.8bn of investment through retail investors
• As at 5 April 2016 top ten VCT managers manage 76% of the £4bn VCT FUM
What are VCTs
History of VCTs
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(Source: Albion Capital)
• 30% income tax relief on the initial amount invested
• Minimum holding period of five years
• Tax-free dividends
• Tax-free capital gains on the VCT shares
• Maximum investment - £200,000 per tax year
What are VCTs
Key tax reliefs
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• No Change to Tax Incentives
• Increased focus on Innovation and Growth
• Limited new asset-based investments
• Gradually reducing Asset Based portfolio – over 5-7 years
• Replaced by enlarged Growth portfolio with a Technology focus
• Portfolio risk managed through sector focus and maturity of investments
Implications of Budget Statement
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• Invest across 5 Albion VCTs with 20 years’ track record raising up to £32m
• Participate in diversified, balanced portfolio c.£280 million across c.60 businesses
• Thematic investment strategy
• Current tax-free dividend yield of around 5.4% (equal to approximately 7.7% on net cost after tax relief)
• 10 dividends paid each year
• 30% up-front income tax relief
The offers
Features of the Albion Top Up Offers
Yield figures are based on the most recently announced NAVs and current annual dividend targets for the Albion VCTs as at the date of the Prospectus, and an equal investment across five VCTs.
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The offers
Investment equally across portfolio of income producing VCTs:
Initial Investmente.g. £6,000
£1,200Albion
Development VCT
£1,200Albion
Enterprise VCT
£1,200Kings Arms Yard VCT
£1,200Albion
Technology & General
VCT
£1,200Crown Place
VCT
• Option to invest different amounts in individual VCTs if required
• Should a VCT reach full capacity, the default option is that investment will be spread equally across the remaining open VCTs
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• Current tax-free dividend yield of around 5.4% (equal to approximately 7.7% on net cost after tax relief)
• 10 dividends paid each year
• No need to buy annuity
• Longer term aim to ensure value of portfolio at least keeps pace with inflation
• Active share buyback scheme with 5% target discount
The Investor
Post retirement/income seeker:
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Yield figures are based on the most recently announced NAVs and the current annual dividend targets for the Albion VCTs as at the date of the Prospectus, and an equal investment across five VCTs.
• Option of taking dividend as New Shares through DRIS
• Additional 30% up-front tax relief on value of dividend
• Target Dividend 5.4p
• 30% Tax Relief 1.6p
7.0p• Yield of around 5.4% on gross cost becomes 10.0%
on net cost of 70p after tax relief:
• Can revert to cash dividends at anytime
The Investor
Pre-retirement/capital growth seeker:
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Yield figures are based on the most recently announced NAVs and the current annual dividend targets for the Albion VCTs as at the date of the Prospectus, and an equal investment across five VCTs.
• Initial charge - 2.5% (reduced from 3% in 16/17)
• Annual costs - capped at 3% (including average annual management fee of 2.2%)
Costs
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VCT Charges
Portfolio
Investment portfolio as at 31st March 2017
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Number of unquoted businesses – c.60Investee companies typically have no external gearing
• Experienced venture capital investment team –founded in 1996
• One of largest VCT investors in UK – 6 VCTs with funds under management of c.£340m
• Hands-on approach
• Specialist depth – healthcare, education, environment, leisure & technology
• Albion also manages or provides administration services to UCL Technology Fund, Albion Community Power and Albion Care Communities
• In November 2016 Albion acquired OLIM, a specialist UK quoted equities fund manager with c.£500m AUM
The manager
Albion Capital has c.£1bn of funds under management or administration (combined with OLIM) and is one of the UK’s leading independent fund managers.
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The Manager
Ed LascellesPartner
Patrick ReeveManaging Partner
Will Fraser-AllenDeputy Managing Partner
Adam ChirkowskiInvestment Director
Dr. Andrew ElderPartner
Emil GigovPartner
David GudginPartner
Robert HendersonInvestment Manager
Dr. Christoph RuedigPartner
Henry StanfordPartner
Robert Whitby-SmithPartner
Marco YuInvestment Director
Stuart MantHead of Business Development
Victoria ScottHead of Marketing
Vikash HansraniOperations Partner
Linda RobersonHead of Compliance
India CornettBusiness Development Executive
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VCT Executive Team
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Track record
Total NAV return over one year and five years to 31 March 2017
The following graph sets out the performance of the VCTs over the 5 years to 31st March 2017 and the 12 month average to 31st March 2017, being the cumulative return for the period comprising dividends paid and change in net asset value. This does not include tax relief.
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Recent deals
Growth Capital
Automotive consultancy providing strategic consultancy, research and insight to the world’s leading vehicle manufacturers.
Growth Capital
Leading data science business applying big data and predictive analytics to consumer marketing.
Growth Capital
Enterprise technology platform which helps advertisers enhance their digital marketing.
Growth Capital
A digital health business providing medical nutritional counselling. Ovivahas developed mobile technology solutions that enable dietitians to provide superior care in a highly efficient way.
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Recent deals
Growth Capital
MPP Global is a high growth technology business delivering digital monetisation services to the media, sports and retail sector. MPP counts major global media companies including Sky, News UK, Daily Mail Group, L’Equipe and McClatchy among its clients.
Asset Based
G. Networks provides ultra-fast fibre optic broadband to SMEs in central London. The Company installs and owns their own fibre network and provides fast reliable ‘Fibre to the Premises (FTTP) at speeds up to 10GB.
Seed
Mobile-first sports marketing agency based on a fan engagement platform.
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Recent deals
Seed
Quantexa uses the latest advances in big data analytics and artificial intelligence to help its banking, insurance and government customers detect financial crime.
Seed
Locum’s Nest is a web platform and mobile application which allows NHS Trusts to manage their requirements for locum doctors in a more efficient and cost effective manner.
Seed
Cyber security business using the latest data science techniques to enable commercial enterprises assess the adequacy of their cyber defences.
Radnor House, Twickenham
• Independent day school in Twickenham – started 2010
• Freehold site on the Thames – strong demographic area with under provision of private education
• Performing ahead of budget with c.410 pupils
Radnor House, Sevenoaks
• An established school in Sevenoaks with c.380 pupils
• Freehold, Grade 1 listed property with 30 acres
• Capacity for c.600 when mature
Sector focus: Education – Value £26m
Albion’s investments in the education sector focus on fee paying schools in affluent areas.
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• 75 bed care home in Cumnor Hill, Oxford60 bed care home in Hillingdon, Greater London 66 bed care home in Shinfield, Reading
• Focus on residential and nursing care including dementia care
• Provision of hotel style accommodation including a bistro, private dining room, library, cinema and hair salon
• Established partner (Berkley Care Group)
Sector focus: Healthcare (asset based) – Value £19m
Addressing the needs of an ageing population, Albion’s care home investments target high quality sites in locations able to support privately paying residents.
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• Hydro-electricity: 3 schemes in Snowdonia and North Central Scotland
• Solar: Domestic rooftop in Cambridgeshire and Southern England
• Wind:4 wind turbines in South Wales and 1 in Scotland
• Biogas:Waste food biogas and composting plant in Perth, Scotland
Sector focus: Renewable energy – Value £49m
Albion’s renewable power portfolio is well diversified across proven technologies to provide lower risk, long term, inflation linked income.
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Sector focus: Technology (i) - Value £61m
A portfolio of companies addressing a range of technology challenges
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Automation and machine learning
Digital risk management
Digital media
Sector focus: Technology (ii) - Value £61m
A portfolio of companies addressing a range of technology challenges
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Predictive analytics and modelling
Other
Sector focus: – Healthcare (growth) - Value £33m
Investing in capital-efficient healthcare businesses addressing the need to deliver healthcare more efficiently with improved patient outcomes.
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Diagnostics and imaging
Drug re-profiling Digital health Other
Appendix
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• OLIM Investment Managers
OLIM Investment Managers
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• Albion Capital acquired OLIM Investment Managers in November 2016
• Value-oriented investment approach
• Specialist fund manager focusing on UK quoted equities
• Over £500m of assets under management
• Income yield of around 4% across funds managed
• Strong track record since 1986
• Typically 50% mid-cap and 50% large-cap
• High conviction manager (30-40 stocks)
• 3 experienced fund managers, each with over 20 years experience managing UK quoted equities
• Substantial holdings by the team in the SVS Albion OLIM Equity Income Fund
Stuart Mant, Head of Business DevelopmentT: 020 7601 1883M: 07500 77 88 99E: [email protected]
India Cornett, Business Development ExecutiveT: 020 7367 5673E: [email protected]
Contact details
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1 Kings’s Arms Yard, London EC2R 7AFT: 020 7601 1850 www.albion.capital