The Lemon Fool

Attached is a link to a City AM article on Gresham House which is being bought by private equity and delisted from the LSE. Interesting comments by the CEO on the future that makes me wonder how committed they are to VCT funds, such as Baronsmead.

https://www.cityam.com/tony-dalwood-why ... m-the-lse/

Disappointed in BVT performance since changing managers, so may well put the shares into the next buyback.

Any views?

IJ

Not just Baronsmead, also Mobeus, yesno?

From the article:

Smaller quoted companies have struggled under a decimation of the research industry in London over the past seven years,

Seven years seems remarkably specific!

Also this. Is the sentiment expressed here widely shared?

While a slew of high-profile names like Arm and Flutter have decided to list in New York in a bid to access easier capital, the bourse is also facing the allure of private markets. Some 36 firms have now opted to be scooped into private hands this year. Several smaller companies have also ditched their listings altogether, saying it simply doesn’t offer the benefits to justify the costs and drawbacks.

Solgenics, an African renewables firm listed on London’s smaller AIM market, neatly summarised some of the issues earlier this year as it de-listed. The “considerable cost, management time and legal and regulatory burden” of its AIM listing was “disproportionate to the benefits to the company,” the firm said.

We have been disappointed with our current Baronsmead holding, although performance -wise, our Mobeus holdings are doing comparatively well.
However both will be going at the end of our 5-year holdings (which have been extended by our DRIS investments), as we are simplifying our financial affairs.
Looking at total return graphs over 5 years (from Hargreaves Lansdown), the Mobeus VCTS (MIG4 and IGV) rose steeply to over 100% from the plunge in early 2020, and have near-plateaued since in the past two years (to around 90%), whereas Baronsmead (BVT) only climbed slowly to around 30%, then declined to near zero.
Caution - take the above numbers with considerable caution, since VCTs are usually bought new at a price above NAV, and they come with a tax rebate provided there is a 5-year hold. The final sale price may be subject to buy backs.

As a holder of both Mobeus and Baronsmead forever I’m rather more hopeful that Searchlight have a PE expertise which they could bring to this party. Always thought* Gresham were mostly focused on gathering assets rather than managing them so their takeover of 2 VCT houses was always a negative in my head. * I have no empirical evidence just thoughts.

IJ49 wrote:Disappointed in BVT performance since changing managers, so may well put the shares into the next buyback.

The last five years have seen no total return in either BMD or BVT.
I am disappointed but there has been little progress in much of the market in general and perhaps we have to accept that no total return is better than a loss!

They both slipped out their annual results under cover of Christmas:-
Baronsmead Venture Trust plc
Net Asset Value ("NAV") per share decreased 2.3 per cent to 57.2p, before the deduction of dividends, for the financial year ended 30 September 2023.
and
Baronsmead Second Venture Trust plc
Net Asset Value ("NAV") per share decreased 3.1 per cent to 60.1p, before the deduction of dividends, for the financial year ended 30 September 2023.

Their AGMs are to be held on the 5th March 2024, so perhaps those still holding Baronsmead VCTs by then should consider attending.

I agree. The Baronsmead VCTs have (so far) adapted poorly to the new VCT rules. That said, I was happy when they came under the same management group as Mobeus, who I think recognised the need to revamp the management team and skills much earlier (Trevor Hope et al). The gap in performance between Mobeus and Baronsmead is huge. I intend to attend the 2024 presentation and AGM. There will inevitably be some pointed questions.