REG - Amati AIM VCT PLC - Terms of Appointment of New Investment Manager

Amati AIM VCTAnnouncement

28/02/2025 15:15

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RNS Number : 9435Y  Amati AIM VCT PLC  28 February 2025

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
THE MARKET ABUSE REGULATION (EU) 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW
BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED. ON THE
PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS
INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

For immediate release

28 February 2025

AMATI AIM VCT PLC

 

Terms of Appointment of New Investment Manager

 

Summary

 

The Board is pleased to announce that, further to its announcement on 2
December 2024, the Company and Maven Capital Partners UK LLP ("Maven") have
agreed and entered into heads of terms setting out the principal terms and
conditions on, and subject to which, Maven will be appointed as the Company's
new investment manager, administrator and company secretary.  Under the heads
of terms:

 

§ There will be no change to the level of management fee payable by the
Company to its investment manager, with Maven receiving an annual management
fee of 1.75 per cent. of the Company's net asset value.

§ The Company's annual running costs (excluding incentive fees and other
extraordinary costs) will continue to be capped at 3.5 per cent. of the
Company's net assets, with any excess running costs met by Maven by way of a
reduction in future management fees.

§ In order to offset any termination payment to the Company's current
investment manager and to contribute towards the other costs of implementing
the proposals described in this announcement, Maven has agreed to waive its
management fee for two years commencing on the date of appointment.

§ The Board has agreed to seek FCA and shareholder approval to broaden the
Company's investment objectives and policy to enable a greater degree of
investment in unquoted UK companies with potential for growth, alongside
continued investment in companies quoted on AIM and AQSE (an "AIM Plus"
strategy).

§ In light of, but not conditional on, the proposed adoption of an "AIM Plus"
strategy, the Company has agreed that Maven will be entitled to receive an
incentive fee of 15 per cent. of realised capital gains generated by the
Company's future investments in unquoted companies. The incentive fee on
unquoted investments will only be payable if the Company's net asset value has
increased since the date an incentive fee was last paid.

Details on the terms of appointment

 

The heads of terms provide that Maven will receive an unchanged annual
management fee of 1.75 per cent. of the Company's net asset value, calculated
and payable quarterly in arrears. Maven will also receive an annual
administration fee of £78,000 and an annual company secretarial fee of
£55,000, each payable quarterly in arrears and subject to an annual
adjustment, calculated on 1 February each year, to reflect any change in the
UK Retail Prices Index. Such fees will replace the administration and
secretarial fees currently paid to third party service providers. The
Company's annual running costs (excluding incentive fees and other
extraordinary costs) will continue to be capped at 3.5 per cent. of the
Company's net assets, with any excess running costs met by Maven by way of a
reduction in future management fees.

 

In order to offset any termination payment to the Company's current investment
manager and to contribute towards the other costs of implementing the
proposals described in this announcement, Maven has agreed to waive its
management fee for the first two years under the new investment management
agreement. The Company will bear all the remaining costs associated with the
proposals.

 

As detailed in the announcement released by the Board on 2 December 2024, the
Board and Maven are in advanced discussions regarding potential changes to the
Company's investment objectives and policy that would, subject to approval by
the FCA and shareholders, enable a greater degree of investment in unquoted UK
companies with potential for growth, alongside continued investment in
companies quoted on AIM and AQSE (an "AIM Plus" strategy). In light of, but
not conditional on, the adoption of an "AIM Plus" strategy, the Company has
agreed that Maven will be entitled to receive a management incentive fee in
respect of gains generated by investments in unquoted companies which are made
following the effective date of Maven's appointment or which have been
introduced to the Company by Maven prior to effective date. The incentive fee
payable will be an amount equal to 15 per cent. of the total return over cost
generated by the realisation of any such unquoted investment each financial
year, adjusted for any realised losses incurred in respect of other such
unquoted investments in that year. The incentive fee on such unquoted
investments will only be payable on the basis of realised capital gains (as
opposed to valuation uplifts) and only if the Company's net asset value has
increased since the date an incentive fee was last paid. The incentive fee
will be calculated and payable on an annual basis as at 31 January based on
realisations which have occurred during the most recent financial year (save
that the first incentive fee will not be calculated and payable until the end
of the initial term, as detailed below, based on realisations which have
occurred during the initial term).

Maven's appointment will be for an initial term of 24 months and shall be
terminable, in addition to customary termination provisions, during the 12
month period commencing at the end of the initial term, by either party
serving 18 months' notice, and thereafter, by either party serving 12 months'
notice.

 

The appointment of Maven on the terms set out in the heads of terms is subject
to execution of a new investment management agreement and satisfaction of
certain conditions. Further details, including the expected effective date of
Maven's appointment, will be announced once finalised.

 

Further information on Maven

 

Maven is a leading UK private equity firm and VCT fund manager with the
ability to offer a dual private company and AIM strategy, which allows VCTs
under its management to maximise asset and sector diversification and spread
investment risk across large, broadly based portfolios.

The Board believes the change in investment manager will provide the following
benefits:

·    Deal flow: Since 2016, following the rule changes that required VCTs
to focus on investing in earlier stage private companies, Maven has been one
of the most active managers in the industry, completing 80 new investments in
high growth businesses active in a range of sectors such as software, cyber
security, data analytics, healthcare, fintech/regtech and specialist
engineering.

·    Depth of resource. Maven is one of the few VCT fund managers with
experience of both AIM and private capital investment and an experienced
in-house support team with decades of experience in fund accounting, company
secretariat and compliance. Maven's investment management and support teams
are significantly larger than those of the current manager.

·   Strong track record. Maven has a history of achieving positive
shareholder returns via profitable private company realisations, including the
exits announced in 2024 from Quorum Cyber (8.2x cost), Novatus Global (4.7x
cost), MirrorWeb (up to 4.5x cost) and CB Technology (2.9x cost).

·    Rigorous approach to asset selection and active portfolio
management. Maven has a strong hands on investment aftercare culture that
actively engages with all portfolio companies to help protect and drive
shareholder value, including exit planning.

·   Broad marketing support. Maven brings with them a broad contact base
throughout the IFA and wealth management industry, including the use of
LightTower Partners, as specialist promotor of tax-advantaged investment
products, which are expected to assist in raising awareness and appeal of the
Company.

Investment Objectives and Policy

The Board expects to provide shareholders with further details of any proposed
changes to the investment objectives and policy, and the resulting "AIM Plus"
strategy, in or alongside the notice relating to the Company's annual general
meeting to be held in 2025 (the "2025 AGM").

It is anticipated that shareholders will be asked to approve the changes to
the Company's investment objectives and policy at or around the time of the
2025 AGM.

Board Change

In anticipation of the proposals described in this announcement becoming
effective, the Board has reviewed the composition of the Board and is
delighted to announce the Board's intention to appoint Neeta Patel CBE as a
new independent, non-executive Director of the Company.

 

Ms. Patel CBE brings 35 years' experience in technology, media, insurance and
educational sectors, including experience advising start-ups and scaling
companies, which the Board believes will be invaluable to the Company in the
forthcoming move to Maven. More recently, Ms. Patel CBE was a director of
Albion Venture Trust VCT plc and she is currently a non-executive director of
Allianz Technology Trust plc and European Opportunities Trust plc. She was the
founding CEO of the Centre for Entrepreneurs, a board advisor at Tech London
Advocates, a member of the advisory board at City University Ventures and an
entrepreneur mentor-in-residence at London Business School.

 

The appointment of Ms. Patel CBE is expected to become effective prior to the
2025 AGM, with Ms Patel CBE then seeking election at the 2025 AGM in
accordance with the Company's articles of association. The Company will
release a further announcement when the appointment has become effective.

Enquiries:

 

Fiona Wollocombe, Chair

Amati AIM VCT plc

Email: AmatiAIMVCTChair@amatiglobal.com
(mailto:AmatiAIMVCTChair@amatiglobal.com)

 

Douglas Armstrong

Dickson Minto Advisers

Financial Adviser to the Company

Telephone: 020 7649 6823

 

Important Information

This announcement is released by the Company and the information contained
within this announcement is deemed by the Company to constitute inside
information for the purposes of Article 7 of the UK version of the EU Market
Abuse Regulation (Regulation (EU) No.596/2014) which forms part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended. Upon the
publication of this announcement via a Regulatory Information Service, such
information is now considered to be in the public domain.

Legal Entity Identifier (LEI): 213800HAEDBBK9RWCD25

 

 

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