Albion Capital said it is aiming to raise up to £45mln in top-up offers for five of its venture capital trusts (VCTs).
The offers opened to investors this week and are expected to close no later than September 30, 2021, though each VCT may close its offer earlier or may extend to next January at its board’s discretion.
Albion said the new fundraising reflects its confidence in a strong pipeline of investment opportunities in software and healthcare, including a number of companies in those sectors in its combined portfolios of around 70 growth businesses, which was valued at a combined £377mln in September.
Over the past two calendar years the VCT manager has invested £66mln into 36 new and existing portfolio businesses, with recent investments include eTrading technology company TransFICC, challenger credit reference agency Credit Kudos, marine and automotive insurtech Concirrus and health tech startup uMed.
“The COVID-19 pandemic has thrown up exceptional challenges to the way we live and work, and precipitated the dramatic acceleration of structural changes already underway in our economy,” said Will Fraser-Allen, Albion’s managing partner.
“Against this backdrop, our portfolio companies have held up well and benefit from considerable advantages that will enable them to prosper in the ‘new normal’.
“Many of our highly promising growth and technology investments are capital efficient, truly global in terms of customer base, with multi-year contracts with blue chip enterprises, and often provide mission critical software, such as cyber security protection.
“We are excited to offer investors exposure to these pioneering sectors, as well as the opportunity to support the vibrant and ambitious British companies that can drive our economic recovery.”
The split of the fundraising target between the five VCTs is £14mln for the Albion Technology & General VCT, £12mln for the Kings Arms Yard VCT, £7mln for the Albion Development VCT, £6mln for the Albion Enterprise VCT and £6mln for the Crown Place VCT.
Investors who apply before February 26, 2021 for the first £10mln of shares will be entitled to an ‘early bird’ reduction in the offer costs, with existing Albion investors receiving a 1% reduction and new investors a 0.5% reduction.
All five VCTs have an annual, tax-free dividend target of 5% of net asset value.
To 30 September 2020, these five Albion VCTs returned an average of 6.5% per year over 10 years and 7.3% over three years, excluding tax relief. Average annual running costs for the VCTs are 2.5%.
Full details of the offers will be contained in a prospectus that is expected to be published in early January 2021, which will be available on the Albion Capital website.