Northern VCT share offers reach £50 million target

The £50 million joint share offer by the three Northern VCTs, managed by NVM Private Equity, has closed fully subscribed – less than four months after launch. The offers, promoted by Downing LLP, raised £15 million each for Northern Venture Trust and Northern 2 VCT and £20 million for Northern 3 VCT.

Tim Levett, Chairman of NVM Private Equity, comments on the success of the fund-raising:
“As the economy recovers, more people are ‘buying British’ by investing in UK smaller private companies. This year private investors have proved to be less risk-averse than in the past, and they are better informed on the risks and benefits of investing in private equity. Also post-RDR more financial advisers appear to be confident about recommending VCTs to their clients, particularly as there is a widespread recognition that generalist VCTs which pay consistent tax-free dividends can be an important complementary investment alongside conventional pension schemes, where annual and lifetime caps are now in place.”

NVM believes that the strong demand for new shares in the Northern VCTs is down to the performance record of the funds. The three companies jointly won the VCT category in the 2012 Investment Company of the Year awards, and for the 12 months to 30 September 2013 Northern Venture Trust, Northern 2 VCT and Northern 3 VCT have achieved NAV total returns of 15.3%, 13.2% and 13.4% respectively. In the same period Northern Venture Trust has paid dividends per share of 15.0p (including a 9.0p special dividend), Northern 2 VCT 5.5p and Northern 3 VCT 5.5p. The funds have a policy of seeking to pay consistent annual dividends whilst maintaining the underlying capital value.

Of the total fund-raising, £22 million was subscribed by 1,270 existing shareholders in the Northern VCTs and £28 million by 1,130 new investors. When the allotment of new shares is complete, the three funds will have a total of approximately 9,000 shareholders and combined net assets of over £225 million.

NVM Private Equity Limited (NVM)
is independently owned with over 29 years’ experience of investing in unquoted UK businesses. NVM is a generalist investor, managing over £260m of funds including the three Northern VCTs, and is differentiated by having executives living and working in regional business communities throughout the UK. NVM seeks investment opportunities in UK businesses which have the right mix of growth potential and market vision. They may be looking to grow organically, acquire another business or secure a management buy-out. Typically, NVM looks to invest between £2 million and £10 million in each transaction.

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