The trusts – Northern VCT, Northern 2 and Northern 3 – are looking to raise £42m with an overallotment option of £18m, for a total of £60m.
Octopus Investments launches joint £20m fundraise for two AIM VCTs
The three VCTs have combined net assets of £343m and a portfolio comprising around 62 companies.
According to Nicholas Hyett, investment manager at Wealth Club, the fundraise was due to the Northern VCTs achieving a “raft of exits”, with proceeds of more than £154.6m in around two years.
He added: “Exiting more mature businesses leaves behind a portfolio that is younger on average. That could mean fewer exits in the near term, and means support for existing companies is likely to account for a greater share of new investments.
“Fortunately, new investors can afford to be patient, as VCT shares must be held for at least five years to qualify for tax relief. In Mercia, the funds benefit from an experienced manager, with a national presence that should provide access to a wide selection of new investment opportunities. That is a strength that should pay off in the long term.”
Hargreave Hale AIM VCT launches £20m fundraise
Over five years, Northern VCT produced NAV total returns of 26.1%, while Northern 2 and 3 achieved NAV total return of 28.6% and 27.7%, respectively, Wealth Club noted.
All three venture capital trusts target annual dividends of between 4.5% and 5% of NAV.
