Mobeus Equity Partners today (19 June) proposed the merger of four of its venture capital trusts (VCTs) into two new funds.
Under the plan, its Income and Growth VCT and Mobeus Income and Growth VCT will be merged into a new ‘Acquirer VCT’ worth a combined £190.8m in assets under management (AUM).
Likewise, the Mobeus Income and Growth 2 and Mobeus Income and Growth 4 funds will be merged into a singular ‘Target VCT’ with £128.8m in AUM.
The proposed plans – which aim to create greater cost savings, administration efficiency and simplicity – will be discussed with shareholders at their upcoming general meetings on 18 and 26 July.
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Fees and taxes during the process are expected to cost Mobeus £1.1m, but the mergers could ultimately save shareholders £798,387 a year moving forward.
These cost savings, paired with the enlarged assets of each new funds, are hoped to provide greater liquidity which can be returned to shareholders through dividend payments.
Each of the VCTs share the goal of generating a regular income stream by investing in “young unquoted UK companies for the purpose of their growth and development”.
They were launched in the early 2000s and made returns upwards of 173.2% over the past decade. The best performer – Mobeus Income and Growth 4 – was up 245.5% over the period, far in excess of the FTSE All Share’s 77.7% return.
The current arrangement with investment adviser Gresham House will be revised if the proposed mergers are passed, with the new terms being fixed for an initial one year contract.
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