The Association of Investment Companies (AIC) has released recommendations by advisers covering both generalist and specialist VCTs.
The Association of Investment Companies (AIC) has released recommendations by advisers covering both generalist and specialist VCTs.
Among the generalist recommendations, Ben Yearsley, investment manager for Hargreaves Lansdown, likes the look of Electra Kingsway VCT. First launched in 2001, the Fund has has performed strongly with the audited Net Asset Value per share hitting 106.97p at 30 September 2006.
For his generalist recommendation, Matthew Woodbridge, investment manager for Chelsea Financial Services, highlights Close Enterprise VCT which is aiming to raise £20 million by its final closing on 4 April 2007.
He is a fan of Patrick Reeve, managing director of Close Ventures and his team, commenting that they have achieved the ‘holy grail’ of having an active secondary market in the shares of their earlier VCTs.
Woodbridge also believes that ‘this new issue has a policy of investing in both asset-backed and high growth companies which should provide a good balance for the portfolio and a steady revenue stream’.
When it comes to specialist VCTs, Yearsley likes Foresight 2 C shares, arguing that while it’s bound to be a popular choice ‘you can’t argue with the numbers’.
Woodbridge chose Sitka Health Fund VCT for his specialist choice. He notes that it is a top-up issue which allows prospective investors instant access to a mature portfolio – £12 million in size – which has paid out 7p per share in dividends in recent months following successful exits. ‘For a VCT investor looking to invest for the longer term of around seven to -10 years) this presents an interesting investment opportunity,’ he says.
The AIC observes that aside from the obvious tax advantages to be gained from using VCTs, there are now ‘some interesting companies with some appealing stories to tell’. These include VCTs investing in green energy, nursing homes and other specialist areas, as well as more generalist VCTs for those wanting to spread risk across a variety of sectors.
