Graham Elliott

Venture Capital Trusts (VCTs): A British Success Story Introduced in 1994 by Chancellor Ken Clarke, Venture Capital Trusts (VCTs) were designed to link investors with promising private companies, providing essential growth funding. Over the past 30 years, VCTs have raised over £12 billion, supporting hundreds of start-ups. In 2022/23, VCTs raised £1.08 billion, a sharp contrast to the £160 million raised in their first year. How Do VCTs Work? VCTs are investment trusts pooling funds from individuals to support small, high-growth companies. Notable VCT-backed successes include Five Guys, Wise, Zoopla, and Lucky Saint. These firms employ an average of 68 people each, compared to the 11-employee average for small businesses, contributing nearly 100,000 UK jobs. A Decade-Long Extension The government has extended the VCT scheme until 2035, boosting investor confidence in its role as a driver of economic growth. Why Consider a VCT? VCTs offer significant tax benefits, including: 30% income tax relief (if shares are held for five years) Tax-free dividends Exemption from capital gains tax However, they carry high risks as they focus on start-ups, requiring long-term commitment and a tolerance for potential losses. Is a VCT Right for You? While VCTs are a rewarding way to support innovation, they are best suited for experienced investors with a high-risk appetite. With proper due diligence, VCTs can offer unique opportunities to back British entrepreneurship. Z. Karim

7

5 Comments

Budget Flash – Is the EIS & VCT Industry Too Complacent Regarding The Chancellor? A few weeks before the UK election in 2019, I was speaking at an Intelligent Partnership EIS Forum involving eight EIS fund managers, presenting to a group of about forty wealth manager and IFA groups. During the Q&A session, one participant asked the panel of fund managers whether they believed that the election of Jeremy Corbyn would lead to the end of EIS and VCT tax reliefs. With only one exception, they were unanimous in pouring cold water on this suggestion. Too many jobs would be lost; the UK needed investment in early-stage life sciences, fintech, blockchain technology, AI, and robotics; the creative fulcrum of entrepreneurial Britian would be sacrificed etc. All logical and well-reasoned arguments. Symvan was the exception that day and argued that these schemes would be amongst the first to go for the very simple reason that the Corbyn/McDonnell axis viewed the world through an essentially post-Marxist prism and simply saw such schemes as ‘tax breaks for rich guys.’ The private sector has little or no role in generating economic growth when you remove yourself sufficiently from reality. That intellectual depravity does not exist with the current government, but expediency potentially calls the wolf to the door nonetheless. And so Martin Vander Meyer offers a warning in a worryingly prescient article in this week’s Spectator in which he argues that, although the Chancellor has emphatically denied that she wishes to punish early-stage companies in the UK, she may have to “scrape the bottom of the bin” and punish the sector as the Treasury and the OBR have removed Labour’s delusions about what the costs of its mooted tax rises will mean for the UK economy. If the furious lobbying ahead of Wednesday’s budget has taught us anything, it is that the power of the unions is forcing the Chancellor to make sub-optimal decisions and the UK as a whole will bear the cost. Will entrepreneurial Britain pay the price? #EIS #VCT #The Spectator #Martin Vander Weyer #UK Budget

11

#Venture is never easy - and we welcome the UK government's initiative to unlock additional capital for high-growth UK private companies, and to boost retirement income for UK workers. However, the way forward is more complex than what one might think. Have a look at the interview of our CIO, David Clark, to understand what investors need to know before building a #venturecapital investment programme.

11

1 Comment

New Trader TV This Week - Phil Milburn at Liontrust Asset Management PLC warns of major political volatility ahead and the need for de-risking portfolios over the next few weeks. While the fund manager spoke to Trader TV ahead of Biden’s announcement to withdraw from the election race late on July 21, in this episode, he unpacks how he sees politics and economics driving trading activity this year and dissects what a Trump presidency could mean for markets. In this episode: 📈 Economics Vs Politics – how they will drive market activity 🏛 What a potential Trump presidency could mean for markets? ⚠ Preparing for election volatility and risks 📊 The US Stock rotation – a blip or a trend? 🌍 Europe and the UK –where are they in their interest rate cycle? In the extended show, available to our audience that signs up to Trader TV’s mailing list and available on Tradertv.net, Milburn also his concerns on broader market liquidity and why he fears a potential “liquidity-based accident” sometime this year. If you didn’t sign up to Trader TV’s newsletters and wish to have the full interview sent to your inbox each week reach out to [email protected]. The show is supported by Cabrera Capital Markets and MTS Markets. #trading #fixedincome #equities #electionvolatility #Trump #Biden #markets

9

2 Comments

There are some major barriers keeping UK advisers from investing in private markets, including compliance concerns and platform availability, a new study has found. Only 2% of UK-advised client assets are invested in private markets, compared to 15% globally, NextWealth found. The research and consultancy firm was commissioned by Schroders Capital, Franklin Templeton and Aviva Investors to understand why advisers in the UK are reticent to include private market assets in their client portfolios. Read more here: https://bit.ly/48RqOe0 #UKAdvisers #PrivateMarkets #Investing

4

Last year, we partnered with Haatch to open up their SEIS Fund to retail investors via Crowdcube, at a lower entry point than had previously been available. We have the technology and regulatory permissions to make processing smaller ticket, private market investors a breeze. Two weeks ago today, we launched their final 2024/25 tax year SEIS Fund on Crowdcube. Today, only 14 days later, we'll close the campaign. 262 investors have now invested £1m which is roughly 1/3 of the fund. Only an allocation of £100k remains before it closes. We have loved working with the Haatch team and look forward to bringing more retail investors access to all of the sizeable tax benefits that come from SEIS fund investing. As more and more people in the UK get dragged into a higher rate tax band these investment opportunities are becoming much more popular. Thanks to Fred Soneya , Jonathan Keeling and all the team here at CC for making this happen so efficiently. You can check out the offer below. https://lnkd.in/eVhXqdsQ Risk Warning This is a high risk investment and you are unlikely to be protected if something goes wrong. Take 2 minutes to learn more: bit.ly/3u8ZTH0

57

7 Comments

How are retail investors navigating market volatility? Great to speak to a podcasting master, in the form of Carl Hazeley from Finimize, about the results of the latest Modern Investor Pulse - lifting the lid on retail investor trends. Listen to the latest abrdn Macro Bytes episode here -> https://lnkd.in/e73BV6dc

14

PROFITS IN SHARE DELISTINGS An innovative new vulture fund is about to be launched that buys up shares in companies that have delisted from the stock markets. Research Affiliates has revealed that quoted companies that become unquoted for a number of different reasons perform on balance by 5 p.c a year over next five years . Because delistings are typically preceded or followed by sell offs , there is value in buying overdepressed stock prices . Some companies delist to save costs of maintaining a public quote but many others do so in order to buy back the shares once on a private trading venue . According to broker stats , buy backs in public markets account for about one third of total equity market turnover so far in 2024. This trend reflects the widely held view that UK companies are undervalued. But buybacks are also taking place on matched bargain platforms, the most notable being long established City liquidity specialists JP Jenkins. So far this year they have admitted 11 delistings to their private trading platform,about the same number as the previous year . It will be interesting to see how they perform as a whole. The new Deletions ETF , being launched in US might be heading for UK markets next!

14

2 Comments

Genuine question for fellow QT nerds / financial plumbing experts. The BoE MPC voted to keep the pace of Quantitative Tightening unchanged at £100bn for the next 12 months, c. 90% of which will come through a passive run-off of existing holdings, and c. 10% from active sales. Bank reserves are currently upwards of £700bn, well above the BoE’s own estimate of even the £490bn upper bound of the Preferred Minimum Range of Reserves (which should delineate between what central bankers have started calling “abundant” and “ample” reserves). In other words, by the Bank’s own reckoning, it should have lots of room to shrink its balance sheet before bank reserves start to become scarce. Fine. However, this is happening against the backdrop of exponentially growth in banks drawing on the Bank’s Short Term Repo (STR) facility – not something you would expect in an environment where every bank has “abundant” reserves. If you were sitting on the MPC, would this give you pause? Are there any risks associated with moving out of "abundant" territory too quickly, or are gilt-backed reserves just going to seamlessly get replaced with repo-backed reserves?

14

Part 2 of the Interview - How Would you describe Investors confidence in the Capital Market? Watch Our MD give his views and insight on this subject On Channel TV #ChannelsTV #LadiWilliams #NGX #Stocks #crypto

1

Afternoon, my latest blog on Labour spending and the possible impact on rates and gilts.

13

Disappointing to see the FCA intend to go ahead with the changes to the listing rules, despite clear messages from investors that they don't support some of the proposals. We agree that we need vibrant and well functioning markets - but this is not the right solution. ICGN is particularly concerned by the introduction of a more permissive approach to dual class shares structures - with few shareholder protection safeguards - and the removal of shareholder votes prior to significant transactions and related party transactions. These proposals will expose investors to undue risk, with potentially significant implications for underlying beneficiaries including pensioners, insurance, and retail investors’ savings. Dual class share structures should have sunset clauses. Shareholders should be allowed to exercise their rights to vote on significant matters. See ICGN statements below: https://lnkd.in/exUajHS9 https://lnkd.in/eTBwxgvT

87

2 Comments

Why do we favour Separately Managed Accounts over model portfolios at HUNDLE? It's all about customisation. Unlike collective funds or model portfolios, which provide a one-size-fits-all solution, SMAs allow investors to directly own individual securities within their portfolios. This direct ownership facilitates a personalised investment strategy tailored to the client’s unique goals, preferences, tax situation, and constraints. Our Head of Wealth Structuring Andrew Sams has written a superb article on the HUNDLE blog which unpacks why we use SMAs. You can find a link to the article in the comments section below.

38

2 Comments

Mergers of UK investment trusts make sense to build scale and efficiencies which should result in lower fees for investors. This is natural given the performance trends and shift to lower cost index-based products. One “benefit” that you rarely see mentioned during these announcements is that by combining, you can merge away the performance history of underperforming managers. While Alliance Trust has outperformed its benchmark on a 1,3 and 5 year basis on both a NAV and share price basis (including its use of leverage vs an unleveraged benchmark) as of May, Witan has underperformed over the same time periods. Any guess which will be the surviving performance history? Elliot Gulliver-Needham #indexinvesting

15

We are delighted that Simon King has been recommended in the 2024 Spear's 500 (Spear's Magazine) UHNW adviser category: Spear’s Review Since joining Vermeer Partners in 2018 as chief investment officer, Simon King tells Spear’s, he has designed and implemented the firm’s investment processes from scratch.  ‘I was attracted by the opportunity of starting with a clean sheet of paper,’ he says. ‘We have empowered our investment teams to be both stock pickers and asset allocators, whilst still talking directly to clients. This means they can speak to clients with real knowledge and responsibility for investment decisions.’ King says that the firm’s small size allows it to identify unique opportunities. ‘We look to exploit the fact that we are a small, nimble and professional organisation to identify high-quality and more imaginative investments.’ https://lnkd.in/eWmBQejB #vermeerpartners #theartofinvestment #investmentmanagement #wealthmanagement #privateclients #HNWI #UHNW

52

4 Comments

https://bit.ly/3zGB5Mu Comments from Memery Crystal's Senior Partner, Nick Davis, were featured in InstitutionalAssetManager's recent piece: 'FCA overhauls listing rules to boost growth and innovation on UK stock markets'. You can read the full article via the link above. #FCA #StockMarkets #LSE #Listing #SecondaryListing

27