Molten Ventures VCT, a London-listed venture capital investor, has recently announced the launch of an offer for up to £30 million (£10 million + £20 million overallotment). This comes as the VCT has reported total net assets of £117.8 million and a portfolio of approximately 40 companies.
Managed by one of the largest and most established venture capital teams in the UK, Molten Ventures VCT invests alongside its parent in all VCT qualifying deals, giving it a significant advantage in accessing some of the UK’s fastest-growing companies. Over the past five years, the VCT has delivered a NAV total return of 19.9% and targets an average annual dividend equal to 5% of NAV.
According to Nicholas Hyett, Investment Manager at Wealth Club, “Molten Ventures VCT is managed by a highly experienced team with a proven track record in the venture capital market. With nearly ten years since taking over the management of the VCT, we are now starting to see the results of their investment strategy.”
In the last 18 months, the VCT has reported four successful exits, including the sale of breast cancer scanner Endomag to US listed Hologic, fraud detection business Ravelin to Worldpay, and retail investment platform Freetrade to IG Group. While the portfolio still includes a few legacy holdings, the majority of the VCT’s investments are now in high-growth tech companies, typical of Molten Ventures.
However, Molten’s high-tech, high-growth investee companies may be considered riskier than the average VCT investment and often take longer to mature. This may deter some investors from considering Molten as a “core holding,” but its potential for outsized returns makes it an attractive option for experienced investors.
Venture Capital Trusts (VCTs) are not just a tax planning tool but also an excellent way for UK investors to access fast-growing smaller companies. These investments offer generous tax breaks, including up to 30% back in income tax relief, tax-free dividends, and capital gains tax-free growth. Additionally, VCTs provide exposure to high-growth, smaller companies, which can diversify a conventional portfolio and potentially offer attractive returns over the long term.
VCTs are considered higher risk investments, and investors must hold the shares for at least five years before selling to qualify for tax relief. As such, they are best suited for wealthier or more sophisticated investors. These investments are popular with two groups in particular – higher earners or wealthier investors who are limited in what they can put into more mainstream tax wrappers, and those in or near retirement who use VCTs’ tax-free dividends to supplement income from other sources.
Some tips for investing in VCTs include seeking diversification by investing in multiple managers, reinvesting tax-free dividends to receive an additional 30% initial income tax relief, being aware of discounts on VCT shares, and acting quickly as these investments have limited capacity and popular offers can quickly reach their limit.
The offer by Molten Ventures VCT is set to close soon, and those interested are advised to act swiftly to secure their investment. For more information on this offer and other VCT opportunities, please visit the pressat.co.uk website.
Ends.