ShareSoc always takes a break over the Christmas period as companies generally aren't keen on presenting near the year end and the hard-working ShareSoc team need some well deserved time off. Still I always look forward to the first seminar of any year as it's a good chance to get back into the investing frame of mind and meet new companies looking for exposure to the unwashed masses! This time we enjoyed the lovely offices of Link Asset Services and an interesting looking line up:
Mobeus VCT
Venture Capital Trusts (VCTs) seem pretty popular with investors who've got funds outside of a tax shelter and I can see why - the government gives you 30% of your investment back (along with tax free dividends) and that's a pretty good return to start with. There are, of course, a few caveats and Mark Wignall (Managing Partner) of Mobeus Equity was quick to point out that if you don't understand the implications of a VCT investment then you shouldn't invest without professional advice. Still Mobeus Equity has a good record of realisations at a decent money multiple (2-6x) which means that they've generated a healthy return for investors. On top of the capital gain it seems that there's a high income element with a yield of 10% or so; really quite remarkable.
Anyway Mobeus Equity presented today because they're currently raising funds for their 4 VCT portfolios and they're almost fully subscribed. As a strategy they look at UK based companies which require £2-5m in capital and have a proven product with £500k of revenues or more. So these are stable companies that have proved their market and want to expand. The existing portfolio is 76% invested in MBOs of this type of established, profitable business. However the VCT rules have been tightened up and new investments will be in younger, smaller companies where there's a limited track record but hopefully a decent management team. In any event Mobeus Equity usually add management resources to these companies and are able to guide them towards greater profitability.
On the whole Mobeus Equity seem to know what they're doing even if they do self-proclaim themselves to be part of the VCT nobility. If I had a lot of spare capital, and didn't mind locking it up for five…
