Asset-backed investor Downing Protected VCT spent £2.2 million on four investments in its half-year to December. The VCT is one of a pair of Downing funds that look to protect their investments by using loans to investee companies and taking security over their assets.

Asset-backed investor Downing Protected VCT spent £2.2 million on four investments in its half-year to December. The VCT is one of a pair of Downing funds that look to protect their investments by using loans to investee companies and taking security over their assets.

Chairman Chris Kay notes that ‘the long run of increases in market prices of care homes [in which the company had been focused] for the elderly is coming to an end and that prices may now have plateaued’. He adds that ‘niche areas, such as special needs homes, are still attracting corporate buyers’, buttressing valuations in that subsector.

Over the last two years it has built a diversified portfolio of ‘asset-backed’ investments across care homes for the elderly, special needs care homes niche, pubs, hotels and property development.

Investors enjoyed a rise in total return (net asset value plus cumulative dividends paid to date) from 149.45p to 151.35p as it paid a 2p dividend. Investments during the period include £1 million poured into Cadbury House Hotel and Country Club, £800,000 in Bowman Care Homes and a follow-on investment in Heyford Homes.

Kay notes the board’s satisfaction with the ‘adequate downside protection, reasonable yields and good opportunities for capital growth in the medium term’.