Baronsmead Second Venture Trust Half Yearly report

[scotia]

The Baronsmead Second Venture Trust Interim report for the 6 months to the end of March is now available on their website.
It has obviously been a difficult 6 months with the Net Asset Total Return per share showing a drop for the first time on their graph - which goes back 10 years. The NAV (adjusted for the dividend) has decreased from 87.6 to 80.3 pence per share. The value of the AIM and other listed investments fell by 15.2%. The chairman thinks that this volatility is related to the uncertainty over Brexit. He also reports that the growing proportion of early stage companies will take time before they can contribute to investment returns. I suppose most of this was to be expected, but it is a little disappointing that the Baronsmead AIM selections have failed to ride out the volatility any better (or worse?) than the average. Interesting times.

[Kidman]

I've been reading this interim report now it has arrived through the door and am a bit surprised about the amount of AIM influence.

If I read it right, the middle graph on page 6 shows that 42% of the venture capital investment are AIM-listed and also a large chunk of the 29% in collective investment vehicles is AIM-listed (see Portfolio Review on page 4).

Although that may make for more accurate valuations, it also must give significant volatility and I feel we should be having more frequent valuation RNS announcements, weekly rather than monthly, with corresponding price bid/ask movements.

[parallellines]

For me the differentiator to other VCTs is that there's *no* cash. How liquid are the collective investments ?

[Kidman]

For me the differentiator to other VCTs is that there's *no* cash. How liquid are the collective investments ?

Hopefully as much as any other unit trust.

[parallellines]

Although they don't get a mention until you read the notes to the accounts, it looks like most of the collective investments are actually money market funds. So maybe my liquidity concern is misplaced.

My concern was that the Gresham House Micro cap and Multi cap income funds, are the only collective investments referred to in the main report. They appear to focus on the smaller investment style which got Woodford in trouble. Digging more deeply they are only a small proportion of the funds categorised as collective investment.