Generalist VCTs dominate as trade body publishes the top 20 performers of the last decade

19th November 2014

The Association of Investment Companies has published the statistics for the top 20 performing Venture Capital Trusts in the last ten years.

The top 20 performers have paid out average tax free dividends since launch of 79.37p per share and as the sector has matured, dividends have become more consistent too, through both the good times and the bad.  The trusts’ trade body notes that even during the financial crisis in 2008, 19 out of the 20 VCTs paid out a dividend, and in 2009, all 20 paid out a dividend.

Dividend payments in the six months to 30 September 2014 are also up, 7.6% higher than the aggregate level of dividends paid in the six months to 30 September 2013 (£126.5m compared to £117.5m the previous year).  The AIC says this is largely the result of increased dividend payments by a number of VCTs focused on private equity and development capital reflecting investment realisations made in recent times.

Some 17 out of the 20 top performing VCTs over the last 10 years are in the VCT Generalist sector.  The top performing VCT of the last 10 years is the Income & Growth VCT, advised by Mobeus Equity Partners, up 243%. The second top performing VCT of the decade is Elderstreet VCT, up 225%. The average VCT is up 98% over the last decade.

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VCT manager comments

Andrew Garside, Manager of the Baronsmead VCTs said: “The ability to pay consistent dividends over the long-term is a good benchmark for a generalist VCT as this can’t be delivered without good investment performance. Investing in private equity gives lumpy cash flows – it’s hard to predict when investments and exits will occur.  Through the retention of profits realised from the sale of investments in earlier years, the Baronsmead VCTs have established a track record of turning lumpy cash flows into regular dividends which our shareholders appreciate.”

Stuart Veale, the Managing Partner of Beringea, the Manager of the ProVen VCTs said: “VCT dividends have always been an attractive source of tax-free income.  In the last few years, however, VCTs have increasingly focused on making regular dividend payments, year-in, year-out, while also paying additional “special dividends” when they have significant investment disposals.”

Tim Levett, Chairman of NVM Private Equity, managers of the Northern VCTs said: “Over the last ten years the top Generalist VCTs have been investing in growing businesses that have delivered capital growth and revenue, which has underpinned a total return that has both sustained tax free yields of over 7% and maintained steady growth in net asset value per share.  Looking at the portfolios of the leading Generalist VCTs there are grounds for optimism that this may be sustained in the future.”

Annabel Brodie-Smith Communications Director, Association of Investment Companies (AIC) said: “As the VCT sector has come of age, we are seeing some strong performance combined with consistent, tax-free income. VCTs have generous tax benefits due to the support they provide for small and growing UK companies at the coalface of the economy. However, as VCTs invest in small, private companies they are not for the faint-hearted and investors shouldn’t invest solely for the tax benefits. Investors need to do their homework, and if they are in any doubt they should consult an independent financial adviser.”

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Top performing VCTs over 10 years to 30 September 2014 and dividend in pence per share

Performance measure Share price 10yr total return on £100 Total Dividend in FY Total Dividend in FY Total Dividend in FY Total Dividend in FY Total Dividend in FY Total Dividend in FY Total Dividend in FY Total Dividend in FY Total Dividend in FY Total Dividend in FY Total Dividend in FY TOTAL (since 1999) pence per share
VCT Weighted Average  

197.82

Company AIC sector

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Income & Growth VCT VCT Generalist

343.10

1.25

0.75

3.25

7.00

4.00

2.00

4.00

4.00

26.00

10.00

7.00

73.45

Elderstreet VCT VCT Generalist

324.84

3.00

2.00

3.50

5.00

4.00

4.00

4.00

4.00

4.00

4.00

17.00

80.60

Northern Venture Trust VCT Generalist

320.12

12.00

9.00

9.00

9.00

7.50

7.50

7.50

6.00

6.00

15.00

3.00

121.10

Oxford Technology VCT VCT Specialist: Technology

319.32

0.00

0.00

10.00

15.00

0.00

5.00

10.00

0.00

0.00

10.00

0.00

52.25

British Smaller Companies VCT VCT Generalist

317.08

4.80

4.80

4.50

4.50

5.00

5.00

6.25

5.00

23.00

5.50

6.50

87.45

Maven Income and Growth VCT VCT Generalist

310.72

1.70

1.10

4.90

9.80

5.80

3.00

4.00

4.50

5.00

5.50

5.70

58.80

ProVen Growth and Income VCT* VCT Generalist

301.65

3.50

6.50

6.50

57.00

26.00

45.00

0.00

2.78

2.78

2.47

4.02

158.90

ProVen VCT* VCT Generalist

274.36

3.50

6.50

6.50

46.00

9.75

15.50

8.00

6.25

6.25

2.50

3.75

120.20

British Smaller Companies VCT 2 VCT Generalist

268.28

5.00

2.00

2.00

3.00

6.00

6.00

4.00

4.00

5.00

4.50

2.00

43.50

Baronsmead VCT VCT Generalist

249.03

5.50

13.00

10.00

12.50

8.00

6.00

6.00

8.00

6.00

6.00

9.50

133.41

Baronsmead VCT 3 VCT Generalist

244.48

4.50

5.50

6.50

7.50

7.50

7.50

7.50

7.50

7.50

7.50

12.50

90.80

Baronsmead VCT 2 VCT Generalist

240.09

8.50

5.00

13.50

13.50

7.00

5.50

5.50

7.00

7.50

9.50

12.50

114.90

Albion Development VCT VCT Generalist

225.29

4.00

3.00

3.00

5.00

12.00

4.00

8.00

5.00

5.00

5.00

5.00

77.75

Northern 2 VCT VCT Generalist

224.49

4.00

8.80

5.50

5.50

6.00

5.50

5.50

6.50

5.50

5.50

5.50

73.40

Rensburg AIM VCT VCT AIM Quoted

222.51

2.50

3.00

3.00

4.00

7.00

3.00

4.75

9.00

6.00

6.00

4.00

60.75

Chrysalis VCT VCT Generalist

215.39

1.50

5.00

3.00

3.50

4.00

2.00

3.00

4.00

5.00

5.00

1.75

41.70

Baronsmead VCT 4 VCT Generalist

214.76

3.30

4.50

6.00

7.00

7.00

7.00

7.00

7.00

7.00

7.00

9.00

75.00

Maven Income and Growth VCT 2 VCT Generalist

208.42

0.57

0.57

2.40

2.50

4.00

1.20

2.50

2.50

3.00

3.50

3.85

29.52

Octopus AIM VCT VCT AIM Quoted

200.99

0.75

4.00

3.80

5.00

5.00

5.00

7.50

5.00

5.00

5.50

46.55

Maven Income and Growth VCT 3 VCT Generalist

200.15

1.00

2.00

4.50

4.75

2.70

4.00

4.00

4.50

5.00

5.25

2.00

41.70

 

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