VCT Investors Group

Update on latest news
– Report on 23 March 2021 Webinar – click here
https://www.sharesoc.org/seminar/campaign-update-vcts-23-march-2021/
– 16 March 2021 – Ventus and Ventus 2 VCT UPDATE – click here
https://www.sharesoc.org/blog/vcts/ventus-and-ventus-2-vct-update/
– Report on 26 Feb 2020 meeting and action plan click here
https://www.sharesoc.org/blog/vct-investors-group-action-plan/

Purpose

The Purpose of the Group is to improve the returns of investors in VCTs.

Goals

To provide guidelines of what Group members think is best practice, e.g. management fees, performance fees, directors’ tenure and independence.
To provide advice for investors on specific VCTs, by
1. Identifying investors who are interested in specific VCTs and willing to spend time in collaborating with others to share knowledge and identify areas of concern and to make recommendations
2. Providing mechanisms to exchange information
3. Publicising our views to the VCT Boards, investors and others who may be able to influence the Boards of specific VCTs
To have a VCT oversight committee of about 5 or 6 people who are willing to take an active role in respect of VCTs. Such committee will meet on days when larger VCTs have General Meetings or Investor days: Committee members will likely be in London on such days so the time commitment is minimised.
To provide a newsletter and/or blog to inform Group members and provide them with a web location to state their concerns and swap information.
To provide a forum (or questions and answers service) whereby investors can ask what they should do and we can respond or suggest they talk to an expert (Often the answer will be to talk to a tax expert).
To be effective, we will need to recruit significant numbers of VCT investors, and expense will be incurred to do this, and deliver the other services described above, which needs funding. Hence our final goal is to raise adequate funds to support this campaign.

Background

A meeting was held on 23 May 2017 between Mark Lauber, Roger Lawson, Tim Grattan and Cliff Weight to discuss VCT issues and agreed a way forward. The background issues discussed are summarised below:

There are lots of problems with VCTs. The two main ones are:
1. Management’s interests are not the same as shareholders, they are not aligned and managers too often act in their own interests.
2. Shareholders and the directors of VCTs are unable to exert control on VCTs. The corporate governance of VCTs is failing.
Guidelines would be useful on what we think is best practice. These would cover:
1. Management fees
2. Performance fees
3. Directors’ tenure
4. Directors independence
5. And possibly others
The history is of fund managers underperforming and directors not firing them. Some fund managers had badly drafted contracts, e.g. 5 year contracts, that meant they could not be fired without incurring large costs.
At launch the VCT directors are suggested by the fund managers. This is especially the case at launch and tends to happen on new appointments as well. Not enough directors are independent.
Chairs should be limited to 1 Chair and not more than 4 director roles (excluding charities and other roles which do not take up much time).
Some investors are not concerned about their VCT investment.
1. They put money in as a tax saving. They are recommended to do so by an adviser and don’t look at the details when they invest.
2. They don’t bother to monitor their investments.
3. CGT locks them in. If they sell they may get a tax liability, especially if they rolled over a CGT gain when they initially invested.
Our experience is that we can influence VCTs by campaigning. Oxford and Foresight 4 are examples of this. See https://www.sharesoc.org/campaigns/oxford-technology-vcts/ and https://www.sharesoc.org/campaigns/foresight-4-vct/ for more details of these successful campaigns. Alliance Trust, although not a VCT, is another example where we were able to influence NEDs to better manage their managers. See https://www.sharesoc.org/campaigns/alliance-trust-shareholder-action-group-atsag/ for details.
The astonishingly low voting turnout at AGMs (around 10% and trending down. 8% at Foresight 1 today!)
40% of ShareSoc members own VCTs.
No institutional shareholders in VCTs. So, they cannot override individual shareholders. However institutional shareholders often help to enforce good governance in companies and this mechanism is lacking in VCTs.
Foresight 3 and 4 have about 10,000 shareholders. They are not a big VCT. There could easily be 100,000+ VCT investors out there. I have searched the web and can find no estimate of the number of investors. To date £6 bn has been invested in VCTs with about £500 million last year.

Essential facts: see https://www.wealthclub.co.uk/venture-capital-trusts/essential-facts/

For further information contact Cliff Weight, here. Please reference his name and the VCT Group.

Last updated 23 June 2017

PLEASE SUPPORT THIS CAMPAIGN FINANCIALLY

Please use the form below to register your interest in this campaign. You will be given free Associate Membership of ShareSoc unless you opt not to receive it, if you are not already a Member. Note that you may omit your telephone number, if you prefer not to disclose it, but we do need a postal address as we may need to send you forms for signature if we requisition an EGM or resolutions.

You can also use the form below to make a voluntary contribution via any debit or credit cards. Note that any funds contributed specifically to this campaign will be recorded separately and will only be spent on this campaign. You can also donate by cheque or by other means if you prefer – call 0333 200 1595 (a national call rate number, not a premium number) for assistance on that.

Alternatively, we do recommend a paid subscription to ShareSoc which gives you many other benefits.

Post Date: June 28, 2017

VCT Investors Group

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Group description:	Our group is interested in sustainable investing and our goal is to identify and evaluate businesses that will thrive through innovation and their transition to a ‘One Planet Economy’. By leveraging the skills of group members, we aim to deeply understand these businesses, particularly focusing on how they develop long-term valuable benefits for their customers. Each year, we plan to evaluate around seven businesses to identify opportunities where our valuation exceeds the market price. A successful outcome is defined as achieving a compound annual growth rate (CAGR), including dividends, of 10% over a decade.
Meeting Type/Venue:	Meetings are in-person in a pub near to Waterloo station in London.
Meeting Frequency/Timing:	Meetings are bi-monthly on a Monday from 10:45am to 4:30pm. Members are expected to also pay for their own lunch which secures the group free use of a private room in the pub. The cost is expected to be £35-40 per person, per meeting, in addition to your SIGnet membership fee.

Group description:	SIGnet Taunton is a new group with around 10 keen members at present, with a range of investment styles and experience. We welcome new members.
Meeting Type/Venue:	In person meetings at a golf club near to the centre of Taunton.
Meeting Frequency/Timing:	We meet on the first Monday of every month at a golf club near to the centre of Taunton, 11am until 3pm with a lunch break.

Group description:	An online group for those who are new to investing, or have only been investing for a few years. Including topics such as: – What is a share or a bond, why and how to buy them. – Comparing funds, unit trusts, Investment trusts and exchange traded funds. – Portfolio management and diversification. – ISAs, pensions, SIPPS and how to save tax. – How terms such as PE ratio and dividend yield are used to value a share. – How to use technical analysis or charting.
Meeting Type/Venue:	Online using Zoom.
Meeting Frequency/Timing:	Meetings are usually held on the last Monday of the month at 7:00pm.

Group description:	An online group for those who already have some experience in investing. Covering topics such as finding companies to invest in, financial statements and ratios, valuation / margin of safety, analysis of companies and investment trusts and exchange traded funds.
Meeting Type/Venue:	Online using Zoom.
Meeting Frequency/Timing:	Meetings are usually held on the last Wednesday of the month at 7:00pm.

Group description:	The Equity Income Group welcomes investors of all levels of experience, from beginners to advanced. The focus of meetings is on dividend paying Investment Trusts, though there is also discussion around individual shares.
Meeting Type/Venue:	Meetings are held online.
Meeting Frequency/Timing:	Meetings are held every 6 weeks on a weekday between 7 and 8:30pm.

Group description:	A welcoming group open to all types of investors. Typical meeting content is to have a deep dive presentation on a topic selected by the participants and a session on buy/ sell/ key lessons learnt last month.
Meeting Type/Venue:	In person at a friendly pub close to Piccadilly Circus
Meeting Frequency/Timing:	Monthly during the evening on the first Wednesday of the month.

Group description:	All levels of experience welcome. A typical meeting agenda includes: – Macro Environment – Trades: Members review existing positions and identify securities with promising TA entry patterns or setups and with suitable risk/reward. Any security, long, short, futures, options may be considered. The convener takes actual positions in trades and maintains his own detailed ledger, accurately measuring performance of individual securities and cumulative activity. Members are notified by e-mail prior to the entries or exits that are decided upon. Following each meeting an updated copy of the ledger is circulated together with the next meeting agenda. Members may wish to maintain similar ledgers of their own but there is no obligation to do so. – Technical Analysis: Techniques and systems used in trades. Members can request discussion of particular aspects of TA.
Meeting Type/Venue:	Online via Zoom
Meeting Frequency/Timing:	The first Tuesday of every month from 7 to 9pm

Group description:	Open to all investors / people with an interest in investing. Typical meeting will involve members talking about recent purchases, successes, failures and possible future purchases. Also with occasional visiting speakers or members making presentations on a topic of interest.
Meeting Type/Venue:	We aim to meet on the last Tuesday of each month in a private room at a pub in Playhatch. Start time 7pm with members encouraged to meet up around 6pm for a bite to eat / drink before hand, if their diaries allow.
Meeting Frequency/Timing:	7pm on the last Tuesday of the month. Meetings likely to last about two hours but with informal ‘overspill’ before / after.

Group description:	Our group members have wide ranging investment experience and work backgrounds. Discussion topics include reviewing our recent stock or collective investment buying and selling activity, plus what we are considering buying or selling and the reasons for our decisions. We also have a wider discussion on where we think opportunities might arise in the next few months and what we think needs to be avoided. Members occasionally lead discussions on specific topics such as recent events attended, articles or books of interest and sources of investment ideas and information.
Meeting Type/Venue:	During the pandemic our meetings were held on Zoom, but we have now resumed meeting in person at a location a few miles to the west of Colchester. Most meetings will now be in person, but it is possible that occasional meetings will be held on Zoom in special circumstances.
Meeting Frequency/Timing:	We meet midweek every two months. Zoom meetings run for about two hours from 10.30am and in person meetings from 11am until about 3pm, including a break for lunch.