The VCT season is properly in full swing, with Octopus, Albion and now Mobeus all announcing multi-million-pound fundraising initiatives within days of one another.
After a two-year long hiatus, VCT specialist Mobeus announced it intends to raise up to £80m across its four vehicles, a more modest figure than Octopus’ £200m target but higher than Albion’s £38m fundraise.
The offer from Mobeus, which includes an aggregate subscription of up to £50m, with over-allotment facilities to raise an additional £30m, comes in a year in which VCTs are expected to raise up to £1bn, nearly double last year’s record raise of £542m.
Notably, this is the first time Mobeus has commenced a fundraising since 2015 when rule changes introduced by the government’s Finance Bill forced VCTs to focus on funding fledgling companies and prohibited them from investing in management buyouts (MBO).
For Mobeus, whose specialism was MBO deals, this meant revamping its entire investment strategy to comply with the new rules.
Though Wealth Club founder and CEO Alex Davies predicts “this year seems set to be the biggest VCT year ever,” he cautions this could be the last big fundraising year for some time.
Mobeus, for one, notified investors that this could be its last fundraising initiative for the next three years.
“It could be now or never – or at least not in quite some time – for VCT investors,” said Davies.
“These VCTs have been thumping out exceptional dividends year after year. Someone who invested £10,000 in 2010/11 in a linked offer would have received £7,983 in dividends so far. Quite remarkable when you consider the effective cost of the investment would have been just £7,000 after VCT income tax relief (currently 30%).”
Mobeus is no exception, paying investors a total dividend of 311.5p per share across its four VCTs between 2012 and 2017, an average of 12.97p per share per VCT.
“If you want to combine the excitement of growth investing with the invaluable ‘safety net’ of an established portfolio of profitable and cash-generative companies, the Mobeus VCTs could be the ticket for new and seasoned VCT investors alike,” said Davies.
