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Starting Tips For Building a Portfolio

Sophisticated and complex high-risk tax-sensitive investments in small companies: handle with care
bernie
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Re: Starting Tips For Building a Portfolio

#234036

Postby bernie » July 4th, 2019, 9:08 pm

UncleEbenezer wrote:
bernie wrote:Hello Uncle Ebenezer,

What makes Titan too expensive? The details are here: octopusinvestments dot com/investor/our-products/venture-capital-trusts/octopus-titan-vct/

I see a 2% annual fee and 20% performance fee.

The problem with the 20% is that there is no annual hurdle. There was an initial hurdle, but since that has been reached, the 20% is awarded on everything above that. Not - as is more usual (and acceptable) - on everything above a hurdle like 6% or RPI+2% or LIBOR+2% or somesuch, but on everything above 0%.


Is that the same for Octopus Apollo? I see performance fee details here:

https://www.wealthclub.co.uk/venture-ca ... pollo-vct/

Apologies if it should be obvious from reading that, but I just want to be sure.

UncleEbenezer
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Re: Starting Tips For Building a Portfolio

#234090

Postby UncleEbenezer » July 5th, 2019, 1:44 am

bernie wrote:Is that the same for Octopus Apollo? I see performance fee details here:

I don't think so, though I haven't studied it. Octopus Apollo is a merger of large numbers of predecessor VCTs whose performances ranged from middling to poor (though I suspect BBB had in mind an even worse case when he mentioned something similar earlier in the thread).

Octopus isn't like other VCT managers, in having a single team to manage multiple VCTs all of which are pretty similar under the hood. Octopus has historically had different teams. Of those, only the Titan and AIM teams have track records to inspire one to invest. And with those Titanic charges, the only Octopus VCTs I'm keen to hold are the AIM twins (I hold AIM 1).

Having said that, Titan is admirable in its way. It invests in earlier-stage companies than other VCTs, closer to Angel investment. Other VCTs who have ventured into that territory have lost their investors' money, but Titan has made a decent success of it. They work with a substantial Angel-like network who help trawl for opportunities.

sinterklaas
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Re: Starting Tips For Building a Portfolio

#234218

Postby sinterklaas » July 5th, 2019, 2:46 pm

bernie wrote:
UncleEbenezer wrote:[…]The problem with the 20% is that there is no annual hurdle[…]


Is that the same for Octopus Apollo? I see performance fee details here:

https://www.wealthclub.co.uk/venture-ca ... pollo-vct/

Apologies if it should be obvious from reading that, but I just want to be sure.


Yes more or less. The technicality is as follows:

This will only be charged if NAV plus cumulative dividends of the Octopus Apollo VCT at the year end (31 January) exceed the previous highest NAV plus cumulative dividends (net of performance fee already taken).

bernie
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Re: Starting Tips For Building a Portfolio

#234305

Postby bernie » July 5th, 2019, 8:24 pm

UncleEbenezer wrote:
bernie wrote:Is that the same for Octopus Apollo? I see performance fee details here:

I don't think so, though I haven't studied it. Octopus Apollo is a merger of large numbers of predecessor VCTs whose performances ranged from middling to poor (though I suspect BBB had in mind an even worse case when he mentioned something similar earlier in the thread)..


Thanks for sharing your in-depth knowledge. If the fund is a merger of other funds, does that mean that I should take the performance figures that I see on trustnet with a pinch of salt?

https://www.trustnet.com/factsheets/t/i ... lo-vct-plc

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Re: Starting Tips For Building a Portfolio

#234321

Postby UncleEbenezer » July 5th, 2019, 9:20 pm

bernie wrote:Thanks for sharing your in-depth knowledge.

My what? I fear something has badly misled you. If it's me, I apologise.
If the fund is a merger of other funds, does that mean that I should take the performance figures that I see on trustnet with a pinch of salt?

Probably not. At least, no more than any other Trustnet or AIC figures. The five(?) original Apollo funds (originally called something else like "protected", but had to change that after a regulatory slap on the wrist) dominate the current one, and have always had a low-risk, low-return mandate. Eclipse - also originally four or five different VCTs - was much more bombed out after falling on the wrong side of a higher risk/reward profile. Eclipse got merged into Apollo, though in my view it was much more compatible with Titan and should have found a home there if it had to lose its independence.

As it happens, I own Apollo through a punt on Eclipse. I took that punt when management of Eclipse passed to the Titan investment team, whose track record inspired a flutter (Eclipse's charges being quite a lot lower than Titan or Apollo). Unless something very bad happens to the secondary market, I'll be out of that as soon as my five years are up.

bernie
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Re: Starting Tips For Building a Portfolio

#234473

Postby bernie » July 6th, 2019, 8:58 pm

I think I will bite the bullet and start with investments in ProVen VCT and ProVen Growth & Income VCT, which Wealthclub and Hargreaves Lansdown are both offering at an initial charge of 2.5%. While interactive investor are charging 3%.

Though Hargreaves Lansdown only lists the Income and Growth fund, and Wealthclub has a 0.1% annual rebate.

I'm only betting (I admit this is a punt, I'm not one of those Crypto fools think that understanding an investment means it will go up) the smallest amount, so it's not worth me buying a few shares first.

Is there anything I should consider before I start to fill in the forms on Wealthclub?

Mainwaring
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Re: Starting Tips For Building a Portfolio

#234489

Postby Mainwaring » July 6th, 2019, 10:43 pm

We all started sometime. I suspect that Proven might be full if no longer on HL as available. Of the limited current offerings Proven G & I might be viewed as the best of the rest, but there will likely be several houses offering when the season starts in autumn /winter so unless you have a particular rationale for PGI now is there need to rush? I should add I did buy into Proven and PGI in 18/19...adding the diversification of PGI as I have most everything else.
I’d rate Albion and Mobeus as most likely for myself this year. Albion as it’s got a substantial grandfathered asset base and making good portfolio NAV progress. Mobeus as I’d I’ve substantially sold matured holdings off and now a bit light. For me VCTs are not a 1 year punt but a diversified portfolio in their own right. I fear the safest returns are behind us but the maturing/reinvestment cycle is still just about worthwhile. All IMO. Good luck.

bernie
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Re: Starting Tips For Building a Portfolio

#252073

Postby bernie » September 15th, 2019, 9:20 pm

Hello,

I would like to buy a selection (undecided exactly which) of these:

Albion Development VCT PLC
Albion Enterprise VCT PLC
Albion Technology & General VCT
Albion VCT PLC
British Smaller Companies VCT
Chrysalis VCT PLC
Crown Place VCT PLC Ord 1P
Foresight 4 VCT
Foresight VCT
Gresham House Renewable Energy VCT2 PLC Ord 0.1P
Kings Arms Yard VCT PLC Ord 1P
Maven Income and Growth VCT 5 PLC Ord 10P
Mobeus Income & Growth 2 VCT
Mobeus Income & Growth 4 VCT
Mobeus Income & Growth VCT
New Century AIM VCT
New Century AIM VCT 2
Northern 2 VCT PLC
Northern 3 VCT PLC
Northern Venture Trust PLC Ord
The Income and Growth VCT plc ORD 1P
Unicorn AIM VCT plc Ord 1P
Ventus 2 VCT PLC Ord 25P
Ventus VCT PLC D SHS 25P

I have looked at WealthClub.co.uk, and none of them appear to be available there. Are there any other way to buy any of them?

Thanks,

B

scotia
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Re: Starting Tips For Building a Portfolio

#252090

Postby scotia » September 15th, 2019, 11:47 pm

bernie wrote:Hello,

I would like to buy a selection (undecided exactly which) of these:
............

I have looked at WealthClub.co.uk, and none of them appear to be available there. Are there any other way to buy any of them?

Thanks,

B

If you are intending to purchase new issue VCTs - to get the tax relief on your purchase price, then you need to wait until the various VCT managers make new issues. A broker like wealthclub will usually have a list of some/all current available new issues - but you can often get forewarning of intended new issues by checking out the web sites of the VCT managers. You can also normally purchase these new issues from the managers, although usually you will get a larger discount by buying through a broker on a no advice basis. New VCT issues usually peak towards the latter half of the tax year, and some of the more popular ones become quickly fully subscribed.

sinterklaas
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Re: Starting Tips For Building a Portfolio

#252156

Postby sinterklaas » September 16th, 2019, 10:30 am

bernie wrote:Hello,

I would like to buy a selection (undecided exactly which) of these:

[…]

I have looked at WealthClub.co.uk, and none of them appear to be available there. Are there any other way to buy any of them?

Thanks,

B


You’re a bit early, Bernie… that’s why. (Assuming you’re looking for new offers. You could try to buy shares in any of the above through the stock market. No tax relief though.)

- The four Mobeus are planning an offer and should open soonish.

- Maven announced they’ll raise #3 and #4 this year. They raised #5 last year so I expect this will take the year off.

- Albion does an offer pretty much every year. The timing varies but should be open by January? Foresight – ditto, although #4 has raised two years running, maybe expect a small offer for the other one later in the year? Northern – maybe, although theirs are often snapped up by existing shareholders who have priority to apply. British Smallers – raised a large amount last year and seems to have a lot of cash.

And I don't think Ventus, New Century or Chrysalis have done a new offer in ages. I think you’re looking second hand for those. I don’t know why you've listed these though… Past performance?

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Re: Starting Tips For Building a Portfolio

#252237

Postby barchid » September 16th, 2019, 3:54 pm

Scotia
When you mention that brokers such as wealth club offer new shares in some vct's at lower prices than going direct, plus some trail comm rebated, are there any other costs like having to hold the shares on their platform or is it genuinely cheaper?
I always buy my vct's direct from the issuer as I like to keep as far away from IFA's as possible, am I chucking cash away by dealing direct ?

BusyBumbleBee
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Re: Starting Tips For Building a Portfolio

#252240

Postby BusyBumbleBee » September 16th, 2019, 4:02 pm

barchid wrote: am I chucking cash away by dealing direct ?
Yes ;)

scotia
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Re: Starting Tips For Building a Portfolio

#252261

Postby scotia » September 16th, 2019, 5:31 pm

barchid wrote:Scotia
When you mention that brokers such as wealth club offer new shares in some vct's at lower prices than going direct, plus some trail comm rebated, are there any other costs like having to hold the shares on their platform or is it genuinely cheaper?
I always buy my vct's direct from the issuer as I like to keep as far away from IFA's as possible, am I chucking cash away by dealing direct ?

You can usually buy a certificated new issue via a broker at a discount to the price you would pay by buying direct from the VCT manager. And you personally receive a share certificate - it is not held on the broker's platform and you have no further tie up to the broker - apart from probably receiving further details on VCTs from them.

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Re: Starting Tips For Building a Portfolio

#252438

Postby BusyBumbleBee » September 17th, 2019, 6:13 pm

I have put some comments against some of these
bernie wrote:I would like to buy a selection (undecided exactly which) of these:

Albion Development VCT PLC
Albion Enterprise VCT PLC
Albion Technology & General VCT
Albion VCT PLC
British Smaller Companies VCT
Chrysalis VCT PLC {-- these can only be bought second hand as they do not plan to raise any new money and are not for the faint hearted --}
Crown Place VCT PLC Ord 1P
Foresight 4 VCT
Foresight VCT {-- Quite a few of us don't like Foresight VCTs --}
Gresham House Renewable Energy VCT2 PLC Ord 0.1P {-- There are two identical trusts here each with identical holdings. Each with two classes of shares : There is no guarantee that they will make offer of new shares this year --}
Kings Arms Yard VCT PLC Ord 1P
Maven Income and Growth VCT 5 PLC Ord 10P
Mobeus Income & Growth 2 VCT
Mobeus Income & Growth 4 VCT
Mobeus Income & Growth VCT
New Century AIM VCT
New Century AIM VCT 2
Northern 2 VCT PLC
Northern 3 VCT PLC
Northern Venture Trust PLC Ord
The Income and Growth VCT plc ORD 1P
Unicorn AIM VCT plc Ord 1P
Ventus 2 VCT PLC Ord 25P {-- these can only be bought second hand as they cannot raise any new money. Read the threads on this company very carefully before buying --}
Ventus VCT PLC D SHS 25P {-- these are as rare as hen's teeth and you will not be able to buy any quantity. They are identical to D shares of VEN2 and they can only be bought second hand--}

Hope this is helpful. This may sound rude: but I do think you need to do a lot more research in what is a tricky area but it isn't meant that way: I find it very helpful to read annual reports to get a feel for a company and to look at their dividend record - have they made a cut recently for example. And tread lightly to start with - most 'old hands' are very cautious at the moment as we don't know how the new rules will play out.

with kind regards - BBB


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