Octopus Titan

[barchid]

Hardly a surprise in current market conditions but Titan has announced today that due to recent lower funding rounds in some of their unquoteds and the fall in price of Cazoo they will be reducing their nav by 10 to 12%.
I guess they will not be the only vct to do this which is interesting as we are now just entering the traditional vct season.

[127tolmers]

I think you are right as also shown by the recent Festicket. Winter is a-coming!

How will the "new" higher risk VCT model stand up through a recession? At a recent investor show several speakers said that companies that were not self funded for the next two years would struggle. At least VCTs may have funds to get the weaker unquoteds through the worst.

[UncleEbenezer]

I think you are right as also shown by the recent Festicket. Winter is a-coming!

How will the "new" higher risk VCT model stand up through a recession? At a recent investor show several speakers said that companies that were not self funded for the next two years would struggle. At least VCTs may have funds to get the weaker unquoteds through the worst.

There will be an optimal time to invest in the market in general, and an optimal time to invest in VCTs, as each sector is maximally bombed-out. But what will be the sequencing here?

I wonder if money seeking tax relief will pour into VCTs as strongly than ever now? That would perhaps enable them to fish profitably in a bombed-out market amongst companies whose prospects remain adequate or better.

[Kidman]

I suspect money will still pour into VCTs for the foreseeable future as there are not many alternative for such money.

As to whether VCTs can help in a recession or bottom trawl to pick up some bargains, I'm not so sure. The funding limits may mean a VCT can no longer support a company and various other rules may preclude VCTs from making an investment in what looks like a good opportunity.

[UncleEbenezer]

I suspect money will still pour into VCTs for the foreseeable future as there are not many alternative for such money.

As to whether VCTs can help in a recession or bottom trawl to pick up some bargains, I'm not so sure. The funding limits may mean a VCT can no longer support a company and various other rules may preclude VCTs from making an investment in what looks like a good opportunity.

Fair comment.

Thinking this through, the interesting case is the investee with great longer-term prospects but critical cash issues in the shorter term. The VCT will want to support them so long as the rules allow. And one imagines government won't be entirely happy if too many good companies go bust because VCT rules prevent a cash-rich investor supporting them!

But what about where the rules don't allow? That would seem to open the prospect for another investor to step in on favourable "vulture" terms. Existing investors including the VCT are diluted but rescued, while the new investor gets a bargain. I wonder if that presents a great opportunity for non-VCT microcap funds? Not least, those who are stablemates of VCTs. And in doing so, reduces VCT risks, particularly among those whose managers have non-VCT funds available for such situations?

[scotia]

[ I wonder if that presents a great opportunity for non-VCT microcap funds? Not least, those who are stablemates of VCTs. And in doing so, reduces VCT risks, particularly among those whose managers have non-VCT funds available for such situations?

Amati - who run both VCT and Small Co Funds - are holding a "BrightTalk" which is possibly relevant. Its entitled

The Small Cap Discount -
Opportunity Knocks
15th September at 11am - 11:30am

And the link to register for the talk is
https://amatiglobalinvestors.cmail20.com/t/t-l-awuddl-ydhydttrtt-r/

It seems to be specific to the Smaller Cos Fund, but I would imagine it would have some relevance to their AIM VCT

[barchid]

At least buyers are still active for vct type investments as Titan have today announced that Zappy, a company they invested £5.1m in since 2019 has been exited "on an attractive exit for Titan shareholders", although the details of the sale are not being disclosed.

[RH1983]

Looks a good bit of news in what's turning into a dour valuation season for VCTs. Seeing reports that Zappy went for EUR200mln or so (though exact amounts not disclosed) from funding of $23mln to date. Impressive but lets see how things go when NAVs published in September

[Seasider]

I have just read the Chairman's letter for the latest fundraising. Nice to see how they spent what they raised last time. £87.5 million on fees and admin £77.5 million on new and follow on investments. Good to know they have their priorities straight

[Mainwaring]

Titan is one I have passed over each year and Annual Return of 4.9% since 2007 after fees and charges and incentives, ignoring initial relief isn’t wonderful. I’m a bit skeptic all of the current NAV as it’s 30 June and I’m not sure I want to be issued new shares on that basis in the initial round due 5 Dec. Most recent buyback in October was at 86.something probably they are comfortable this was OK?
I’m going to wait on an NAV update to say 30 Sept to see If I can get comfortable. The performance fee can’t apply until they’ve returned the next 10/11p of net NAV growth so that at least is good. I have turned down everything so far this year but I’m still hoping to offset my PAYE. I keep looking for inspiration on the VCT threads and I’d be grateful for the thoughts and rationale of others. What is everyone else doing?

[Kidman]

What is everyone else doing?

I've added to my Pembroke 'B' holding.

[wanderer]

What is everyone else doing?

I have bought into Albion, Octopus AIM and will be buying some additional stock in British Smaller Companies when it makes an offer later this month. Subject to VCTs retaining their tax breaks post budget of course!!

Pembroke is also a good shout but I already have enough of that and Seneca.

Rationale for BSC is that it seems extremely well run, good track record and great result this month. I trust them to deploy my money wisely and they don't seem as excitable as fund managers as some others. All the others I bought for diversification of my vct investments across a range of managers.

[Seasider]

No mention of Mobeus which seemed to attract a lot of money very quickly when it opened, though it has slowed down.

[Mainwaring]

Thanks for flags. I’m in all the usual suspects. They will throw off sufficient cash this tax year to cover my investment for PAYE deductions so I’d probably be best served by Drips but these play havoc with 5 year maturities sales of the original holding. I don’t hold Molten VCT, Pembroke, Titan, Apollo, or currently British Smaller so I’ve been looking hard at them. However I’m inclined to top up Maven, don’t gasp, there’s a few interesting ones in there, and Amati which I’ve held since 2006 and it’s a smaller holding now after my big sale last year.

[barchid]

Mainwaring
I am with you on BSC/V, they are well run, entry & ongoing costs are usually a bit higher than on other vct's but they do have interesting companies, I've been a holder for over 10 years now and one of the attractions is that you can sell one & re-invest in the other, thus taking the 30% and retaining a very similar holding.
Like you I also hold Maven & again for a long time, whilst not shooting the lights out is a reliable income payer & does have a very different portfolio to many of its peers.
Management there are very approachable & despite selling a stake to Mattioli Woods their long standing boss, Bill Nixon, is staying for at least 5 years.
Again one can sell & reinvest in a very similar way as with BSC/V.
Seneca is one I have hopes for in the future but it does seem to find it difficult to gain traction sizewise, but with low expenses which sugars the pill a little.

[Mainwaring]

I’ve plumped for Maven 4 as an initial purchase this year. Steady Eddie. Top 10 all carrying values ahead of cost, positive metrics generally cited in Maven reports. I’ve held them since 2012 off and on. Funded from a partial sale of Maven 3 and Northern which did a buyback today. I believe I can use the income tax refund in due course better than the government!

[Kidman]

No mention of Mobeus which seemed to attract a lot of money very quickly when it opened, though it has slowed down.

I recall gettiing a few strong recommendations from IFAs for Mobeus soon after it opened.
It made me suspicious that they were getting a better commission than published for the first few weeks.

[Seasider]

I recall gettiing a few strong recommendations from IFAs for Mobeus soon after it opened.
It made me suspicious that they were getting a better commission than published for the first few weeks.

Wealthclub were talking about it even before it opened. I thought it was going to be like Baronsmead and fill up in a day but there is still a little capacity left even now.
By the time I subscribed the original allocation for one of the VCTs had filled up so I won't get those shares until January even though I have the others already. That leaves an annoying little hole in my spreadsheet.

[sinterklaas]

That was because it did an odd thing this year, no? (Mobeus I mean) – putting out its prospectus a week or two ahead of when the applications actually opened… Cannot recall another VCT doing that