TIME:REBOOT VCT will be run by TIME Investments, part of the Alpha Real Capital Group, with investment advice by Reboot Ventures.
With a targeted internal rate of return of 11.8% over five years and a minimum investment of £3,000, the product plans to raise up to £20m by end of April 2014.
Reboot founder, former Army officer and fund manager Stuart Nicol said: “We estimate that there are over two million veterans in the UK of working age, resulting in many potential qualifying investee companies. There are numerous examples of great businesses that have been created by veterans including Mergermarket, Trailfinders and Go Ape in the UK, and FedEx, Digital Equipment Corporation, Walmart and Enterprise Rental in the US.
“Ex-military entrepreneurs have a number of qualities that make them stand out in the business world. These include resilience under pressure, determination, discipline and adaptability.”
The VCT will typically invest between £500,000 to £3m per company.At least half of qualifying investments will be in established, profitable companies with the aim of maximising capital security while the remainder will be in businesses with strong revenues and expected future growth, with the potential for recurring profits within three years.
Businesses involved in the production or sale of weapons, or companies whose staff carry weapons, will be avoided.
TIME:REBOOT recently conducted some research with 304 IFAs, almost half of whom expected their sophisticated clients to increase their exposure to VCTs over the next 12 months.
According to the respondents, the VCT market was expected to grow to more than £3bn of assets under management by the end of the 2014 tax year.
As well as enjoying 30% initial income tax relief and tax-free capital growth and dividends, investors in the trust will gain exposure to high growth small and medium-sized companies.
TIME Investments will charge an ongoing AMC of 2.15%. It will also donate 0.1% of its annual net assets to Heropreneurs, a charity that provides assistance to former members of the Armed Forces and their spouses to enable the realisation of their potential to set up, run and grow their own businesses. This donation will be capped at £30,000 annually.
After five years, TIME:REBOOT VCT will make further donations, subject to outperformance of shareholder returns.
