Press Releases
Matrix' double VCT launch
Press Release
14 Sep 2005
Matrix launches 2 new VCT Offers - Over the last five days Matrix has received stock exchange approval for two fresh VCT Share offers.
Matrix Income & Growth VCT 3
Matrix is aiming to raise £20m in a new VCT managed by Matrix Private Equity Partners. This VCT, like the original Matrix Income & Growth VCT which closed in June, is specifically designed for investors who want a regular and growing stream of dividends.
Income stream
The VCT will invest primarily in yield-bearing instruments such as loan stock or preference shares, as well as valuable ordinary share holdings. The Matrix investment team negotiates the interest paid from these yield-bearing investments at a higher rate than a commercial bank loan, generating a good stream of income for the fund. The VCT will aim to invest in established, profitable companies that are able to deliver this income stream.
Capital growth
As well as aiming to secure a good income stream for the fund, the Matrix team will only invest in companies where there is clear potential for making a capital gain. The valuable ordinary share holdings should enable the fund to generate good capital gains when investments are realised at a profit. In a VCT, any such capital gains can be converted into income and paid out as a tax free dividend.
Focus on MBOs
A particular focus will be on management buy-outs (MBOs), where the incumbent management team invests alongside at the same time as the VCT and therefore has its interests precisely aligned with the VCT.
Matrix will focus on established, robust companies with credible plans and solid profit growth prospects. Typically, these are companies that make or supply the products we see around us in our daily lives.
Commenting on the new Matrix Income & Growth 3 VCT, Mark Wignall, Chief Executive at Matrix Private Equity Partners, says:
“This is again a no nonsense generalist VCT with a strong income focus. Our experience has taught us that targeting established profitable companies with a strong position in their sector is a good way of generating attractive returns without taking on as high a level of risk as is found elsewhere in the venture capital world. We have found in particular that MBOs make for attractive and solid investment opportunities, as the incumbent management team know their business inside-out and has its interests precisely aligned with us.”
Foresight 3 & 4 VCT Offer
Foresight Venture Partners, managers of the best performing VCT ever launched, are offering a new packaged Share Offer for their Foresight 3 and Foresight 4 VCTs.
This offer is unusual because the existing £22m combined portfolios are already mature and yielding profitable exits. In fact Foresight has achieved four exits since taking over the VCTs last year, cashing in on investments such as INCA Digital Printers and DNA Research International. “With more of these to come, our objective is to pay annual tax-free dividends from the start” commented Matt Taylor, Partner at Foresight Venture Partners.
Investors will invest at the latest available net asset value per share plus costs, so if the value of the assets in the portfolio rises, so will the price of investing. In that case, investors who subscribe early will reap the rewards.
The package of two existing VCTs enables investors to benefit from a large diversified pool of assets with a minimum investment of only £5,000.
Foresight will invest the offer proceeds into established UK technology companies that are already demonstrating clear growth patterns. Successful technology companies have the potential to deliver large capital profits by way of a future trade sale or stock market flotation. This investment strategy has made Foresight’s first VCT the biggest dividend payer in the VCT industry and allowed the firm to pay out £4 on every £1 of capital invested in its first institutional fund.
Overall
Bridget Guerin, a director of Matrix Group, the Promoter, adds:
“We think that this will be a very busy VCT season with several of the more popular offers closing well before the end of this tax year. As this is likely to be the last year of the generous 40% income tax relief, it may well be the biggest year ever for VCT sales. We have brought out these two VCTs early this year, both run by popular managers, and will be launching a further C Share issue for Unicorn AIM VCT II in October.”