Prospectus • Sep 2, 2021
Prospectus
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Tax Years: 2021/2022 2022/2023
Prospectus relating to an Offer for Subscription of Ordinary Shares in Hargreave Hale AIM VCT plc to raise up to £20 million, together with an Over-allotment Facility to raise up to a further £20 million.
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to what action you should take you are recommended to seek your own financial advice immediately from your stockbroker, bank, solicitor, accountant or other independent financial adviser who is authorised under the Financial Services and Markets Act 2000 (the "FSMA") if you are in the United Kingdom, or from another appropriately authorised independent financial adviser if you are in a territory outside the United Kingdom.
This document comprises a prospectus relating to Hargreave Hale AIM VCT plc (the "Company"). This document has been approved by the Financial Conduct Authority (the "FCA"), as competent authority under the UK version of Regulation (EU) 2017/1129 (the "Prospectus Regulation"). The FCA only approves this document as meeting the standards of completeness, comprehensibility and consistency imposed by the Prospectus Regulation. Such approval should not be considered as an endorsement of the Company that is, nor the quality of the Shares that are, the subject of this document. This document has been drawn up as part of a simplified prospectus in accordance with Article 14 of the Prospectus Regulation. Investors should make their own assessment as to the suitability of investing in the Shares. This document will be made available to the public in accordance with the Prospectus Regulation Rules by being made available at www.hargreaveaimvcts.co.uk.
The Directors of the Company, whose names appear on page 24 of this document, and the Company each accept responsibility for the information contained in this document. To the best of the knowledge of the Directors and the Company, the information contained in this document is in accordance with the facts and this document makes no omission likely to affect its import.
(Incorporated in England and Wales under the Companies Act 1985 with registered number 05206425)
Offer for Subscription of Ordinary Shares in Hargreave Hale AIM VCT plc to raise up to £20 million, together with an Over-allotment Facility to raise up to a further £20 million
Sponsored by
Dickson Minto W.S.
The existing Ordinary Shares issued by the Company are listed on the premium segment of the Official List and traded on the London Stock Exchange's main market for listed securities. Application will also be made to the FCA and the London Stock Exchange for the Offer Shares to be admitted to the premium segment of the Official List and to trading on the London Stock Exchange's main market for listed securities. It is expected that such admission will become effective and that dealings will commence within 5 Business Days of each allotment in respect of the Offer Shares. The Offer will open on 2 September 2021 and may be closed at any time thereafter but, in any event, not later than 12.00 p.m. on 1 April 2022 for the 2021/22 tax year and 12.00 p.m. on 12 August 2022 for the 2022/23 tax year, unless closed prior to that date. All subscription monies will be payable in full in cash on application.
The distribution of this document in jurisdictions other than the UK may be restricted by law and therefore persons into whose possession this document comes should inform themselves about and observe any of these restrictions. Any failure to comply with any of those restrictions may constitute a violation of the securities laws of any such jurisdiction. Accordingly, no person receiving a copy of this document in any territory other than the UK may treat the same as constituting an offer or invitation to them to subscribe for or purchase Offer Shares unless, in such territory, such offer or invitation could lawfully be made.
The offer and sale of the Offer Shares is not being made, directly or indirectly, in or into, or by the use of the mails, or by any means or instrumentality (including, without limitation, facsimile transmission, telex and telephone) of interstate or foreign commerce, or of any facility of a national securities exchange, of the United States, Canada, Australia, Japan, the Republic of South Africa or any other Restricted Jurisdiction. Accordingly, copies of this document are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from, or to any resident of, the United States, Canada, Australia, Japan, the Republic of South Africa or any other Restricted Jurisdiction and persons receiving this document (including custodians, nominees and trustees) must not mail or otherwise distribute or send it in, into or from such jurisdictions. The Offer Shares have not been, and will not be, registered under the US Securities Act or under any of the relevant securities laws of, or with any securities regulatory authority of, any state of the United States or of Canada, Australia, Japan or the Republic of South Africa. Accordingly, unless an exemption under such act or laws is applicable, the Offer Shares may not be offered, sold or delivered, directly or indirectly, in or into the United States, Canada, Australia, Japan or the Republic of South Africa or to, or for the account or benefit of, any resident of the United States, Canada, Australia, Japan or the Republic of South Africa. The Company has not been and will not be registered under the US Investment Company Act and recipients of this document and investors will not be entitled to the benefits of that Act.
Dickson Minto W.S., which is authorised and regulated in the United Kingdom by the FCA, is acting as the sponsor to the Company in relation to the Offer. Dickson Minto W.S. is not advising any other person or treating any other person as its client in relation to the Offer or the matters referred to in this document and will not be responsible to anyone other than the Company for providing the protections afforded to its clients nor for providing advice in relation to the Offer or the matters referred to in this document.
Apart from the responsibilities and liabilities, if any, which may be imposed on Dickson Minto W.S. under FSMA or the regulatory regime established thereunder, Dickson Minto W.S. does not make any representation, express or implied, or accept any responsibility whatsoever for the contents of this document or for any statement made or purported to be made by it or on its behalf in connection with the Company, the Investment Manager, the Ordinary Shares, the Offer Shares or the Offer. Accordingly, Dickson Minto W.S., to the fullest extent permitted by law, disclaims all and any responsibility and liability whether arising in tort, contract or otherwise (save as referred to above) which it might otherwise have in respect of this document or any such statement.
Prospective investors should consider carefully all of the information in this document, in particular the sections headed 'Risk Factors' (on pages 13 to 15) and 'Forward looking statements' (on page 19), before making any application for Offer Shares.
2 September 2021
| Summary | 5 |
|---|---|
| Risk factors | 13 |
| Important information | 16 |
| Highlights | 21 |
| Statistics of the Offer and dealing codes | 22 |
| Expected timetable | 23 |
| Directors, Investment Manager and advisers | 24 |
| Part 1 Letter from the Chairman | 26 |
| Part 2 The Company | 31 |
| 2.1 Investment objectives, key policies and investment process | 31 |
| 2.2 Dividends | 36 |
| 2.3 Shareholder returns | 38 |
| 2.4 The Investment Manager and Administrator | 40 |
| 2.5 The Directors | 43 |
| 2.6 Additional information | 44 |
| Part 3 The Offer | 47 |
| Part 4 Financial information | 52 |
| Part 5 Taxation | 58 |
| Part 6 Additional information | 62 |
| Part 7 Terms and conditions of the Offer | 78 |
| Part 8 Definitions | 87 |
| Guide to the Application Form | 95 |
| Terms and conditions of the Adviser Charges Agreement | 100 |
| Application form | 103 |
| DRIS mandate form | 113 |
This document relates to the issue of ordinary shares of 1 penny each (the "Ordinary Shares") in the capital of Hargreave Hale AIM VCT plc (the "Company") in connection with the offer for subscription to raise up to £20 million, together with an over-allotment facility to raise up to a further £20 million (the "Offer"). The ISIN for the Ordinary Shares is GB00B02WHS05. The Legal Entity Identifier code of the Company is 213800LRYA19A69SIT31 and its registered office is at Talisman House, Boardmans Way, Blackpool FY4 5FY.
This prospectus was approved by the Financial Conduct Authority (the "FCA") in the United Kingdom on 2 September 2021. The head office of the FCA is at 12 Endeavour Square, London E20 1JN (Tel: 020 7066 1000).
The following summary should be read as an introduction to this document. Any decision to invest in the Ordinary Shares should be based on a consideration of this document as a whole by the investor. An investor could lose all or part of the invested capital. Where a claim relating to the information contained in this document is brought before a court, the plaintiff investor might, under national law, have to bear the costs of translating this document before the legal proceedings are initiated. Civil liability attaches only to those persons who have tabled the summary, including any translation thereof, but only where the summary is misleading, inaccurate or inconsistent when read together with the other parts of this document or where it does not provide, when read together with the other parts of this document, key information in order to aid investors when considering whether to invest in such securities.
It should be remembered that the price of the Ordinary Shares, and the income from such Ordinary Shares (if any), may go down as well as up. An investment in the Company is only suitable for investors who are capable of evaluating the risks and merits of such investment and who understand the potential risk of capital loss (which may be equal to the whole amount invested).
Hargreave Hale AIM VCT was incorporated and registered in England and Wales on 16 August 2004 under the 1985 Act with registered number 05206425 as a public company limited by shares. It was incorporated with the name Keydata AIM VCT plc, which was changed to Hargreave Hale AIM VCT 1 plc on 7 October 2009 and Hargreave Hale AIM VCT plc on 6 September 2018. The Ordinary Shares were first admitted to listing on 29 October 2004. The Legal Entity Identifier code of the Company is 213800LRYA19A69SIT31. The principal legislation under which the Company operates is the Companies Act 2006 and regulations made thereunder.
The Company carries on business as a Venture Capital Trust. The investment objectives of the Company are to generate capital gains and income from its portfolio and to make distributions from capital or income to Shareholders whilst maintaining its status as a Venture Capital Trust.
The Company has registered as a small UK registered AIFM. The Company's investment manager is Hargreave Hale Limited (trading as Canaccord Genuity Fund Management) (the "Investment Manager"). The Directors of the Company are as follows:
All of the Directors are non-executive directors and, with the exception of Oliver Bedford, are independent of the Investment Manager.
David Brock was appointed as chairman of Honest Brew Ltd, which is an investee company of the Company, on 25 July 2019. David sits on the board of Honest Brew Ltd as the Company's representative. David is also a shareholder in Honest Brew Ltd but he does not control the entity.
The auditor of the Company is BDO LLP. BDO LLP is registered to carry on audit work by the Institute of Chartered Accountants in England and Wales.
As at 31 August 2021 (being the latest practical date prior to the publication of this document) and after the Offer has closed, the Company is aware of the following persons who hold or will hold directly or indirectly, voting rights representing 3 per cent. or more of the issued share capital of the Company to which voting rights are attached:
| As at 31 August 2021 | After the Offer has closed | |||
|---|---|---|---|---|
| Number of Ordinary Shares |
Percentage of voting rights |
Number of Ordinary Shares* |
Percentage of voting rights* |
|
| Hargreaves Lansdown (Nominees) Limited | 11,693,952 | 5.11% | 11,693,952 | 4.37% |
* Assuming that the Maximum Subscription is achieved in relation to the Offer Shares, taking into account the Over-allotment Facility and that all the allotments are made at an Offer Price based on the NAV per Share as at 31 July 2021. These figures assume that the Shareholders listed do not subscribe for any Offer Shares.
The Company is not aware of any person who, directly or indirectly, jointly or severally, exercises or could exercise control over the Company.
Selected audited financial information relating to the Company which summarises the financial condition of the Company for the financial year ended 30 September 2020 (audited) is set out in the following table.
| Share class | Total NAV (£'000) |
No. of Shares (excluding treasury shares) |
NAV per Share (p) |
Historical Performance (p) |
|---|---|---|---|---|
| Ordinary | 146,957 | 199,514,929 | 73.66 | 70.60 (NAV per Share as at 30 September 2019 (audited)) |
Selected financial information relating to the Company which summarises the financial condition of the Company for the financial year ended 30 September 2020 (audited) and the financial periods ended 31 March 2021 and 31 March 2020 (unaudited) is set out in the following tables.
| Year ended 30 September 2020 (audited) |
6 months ended 31 March 2021 (unaudited) |
6 months ended 31 March 2020 (unaudited) |
|||||||
|---|---|---|---|---|---|---|---|---|---|
| Revenue (£'000) |
Capital (£'000) |
Total (£'000) |
Revenue (£'000) |
Capital (£'000) |
Total (£'000) |
Revenue (£'000) |
Capital (£'000) |
Total (£'000) |
|
| Net gain/(loss) on investments held at fair value through profit or loss |
– | 18,308 | 18,308 | – | 54,987 | 54,987 | – | (18,938) | (18,938) |
| Total income before operating expenses |
731 | 70 | 801 | 391 | – | 391 | 418 | 65 | 483 |
| Investment management fee (accrued/paid) |
(573) | (1,721) | (2,294) | (417) | (1,252) | (1,669) | (275) | (824) | (1,099) |
| Other fees (accrued/paid) to service providers |
(698) | (184) | (882) | (498) | (12) | (510) | (355) | (117) | (472) |
| Profit/(loss) on ordinary activities before taxation |
(540) | 16,473 | 15,933 | (524) | 53,723 | 53,199 | (212) | (19,814) | (20,026) |
| Basic and diluted (loss)/ earnings per Share (p) |
(0.26) | 8.07 | 7.81 | (0.25) | 25.86 | 25.61 | (0.10) | (9.73) | (9.83) |
| Year ended 30 September 2020 (audited) |
6 months ended 31 March 2021 (unaudited) |
6 months ended 31 March 2020 (unaudited) |
|
|---|---|---|---|
| Total net assets (£'000) | 146,957 | 220,640 | 114,552 |
| NAV per Share (p) | 73.66 | 95.71 | 56.70 |
There is no pro forma financial information in the Prospectus.
There were no qualifications in the audit report for the Company in respect of the financial year ended 30 September 2020.
The following are brief descriptions of what the Directors believe, at the time of publication of this document, to be the key material risks specific to the Company.
The Ordinary Shares have a nominal value of 1 penny each and are denominated in Sterling. The ISIN of the Ordinary Shares is GB00B02WHS05 and the SEDOL number is B02WHS0. The ticker code for the Ordinary Shares is HHV.
As at 31 August 2021 (being the latest practicable date prior to the publication of this document) the issued share capital of the Company comprised 228,759,504 Ordinary Shares and no Ordinary Shares were held in treasury.
The Offer Shares will rank pari passu in all respects with the existing issued Ordinary Shares (save for any dividends or other distributions declared, made or paid on the Ordinary Shares by reference to a record date prior to the relevant Issue). Subject to any special rights, restrictions or prohibitions as regards voting for the time being attached to any Ordinary Shares, Shareholders have the right to receive notice of, attend and vote at general meetings of the Company. Each Shareholder present in person or by proxy or by a duly authorised representative (if a company) at a general meeting shall upon a show of hands have one vote and upon a poll all Shareholders have one vote for every Ordinary Share held. Subject to the provisions of the Act, the Company may from time to time declare dividends and make other distributions on the Ordinary Shares. Shareholders are entitled to participate in the net assets of the Company attributable to their Ordinary Shares on a winding up of the Company or other return of capital.
There are no restrictions on the transferability of the Ordinary Shares, subject to compliance with applicable securities laws and the Articles.
The Company's dividend policy is to target a tax free dividend yield equivalent to 5 per cent. of the year end Net Asset Value. The Company has a well-established track record of paying out tax free dividends to Shareholders. Whether a Shareholder qualifies to receive tax free dividends from the Company or not will depend on the personal circumstances of each individual Shareholder. If an Investor is uncertain as to their tax position they should consult their accountant or financial adviser.
The Company aims to pay an interim dividend in July each year and a final dividend in February. Special dividends may also be paid by the Company following significant realisations of investments.
The ability to pay dividends is dependent on the Company's available distributable reserves and cash resources, the Act, the Listing Rules and the VCT Rules. The policy is non-binding and at the discretion of the Board. Dividend payments may vary from year to year in both quantum and timing. The level of dividend paid each year will depend on the performance of the Company's portfolio. In years where there is strong investment performance, the Directors may consider a higher dividend payment, including the payment of special dividends. In years where investment performance is not as strong, the Directors may reduce the dividend or pay no dividend.
Applications will be made to the FCA for the Offer Shares to be admitted to the premium segment of the Official List and to the London Stock Exchange for the Offer Shares to be admitted to trading on the main market of the London Stock Exchange. It is expected that such admissions will become effective, and dealings in the Offer Shares will commence, during the period from 18 October 2021 to 25 August 2022.
The following is a brief description of what the Directors believe, at the time of publication of this document, to be the key material risks specific to the Ordinary Shares.
● It is likely that the price for an Ordinary Share which a Shareholder could achieve on the stock market will be significantly less than the NAV per Share. The market value of, and the returns derived from, the Ordinary Shares may go down as well as up and an investor may not get back the amount invested.
It is proposed that the Company raises up to £20 million by way of the Offer, with the availability of an Over-allotment Facility allowing the Company to raise up to a further £20 million at the Board's discretion. The issue of the Offer Shares is subject to Shareholders approving the necessary share issuance authority at a general meeting to be held on 6 October 2021.
The Offer will open on 2 September 2021. The first allotment under the Offer is expected to be on or around 11 October 2021. Thereafter, the Directors reserve the right to allot Offer Shares at any time whilst the Offer remains open. Following the first allotment of Offer Shares, allotments will take place on a monthly basis or at such other times as the Board, in its sole discretion, may determine.
Offer Shares will be issued at a 3.5 per cent. premium to the last published NAV per Share to offset the costs of the Offer. The price of the Offer Shares will be calculated in pence to two decimal places by reference to the Pricing Formula:
| Last Published NAV per Share | |
|---|---|
| Price of Offer Shares = | 0.965 |
The NAV per Share will be the last published by the Company prior to the date of allotment, adjusted as necessary for dividends declared but not yet paid if the allotment occurs whilst the Shares are classified as ex-dividend. The relevant Offer Price in respect of each allotment will be announced through a Regulatory Information Service following the relevant allotment of Offer Shares. Dealings in Offer Shares are expected to commence within 5 Business Days of the relevant allotments.
The closing date for the Offer in respect of the 2021/22 tax year will be at 12.00 p.m. on 1 April 2022 (unless fully subscribed earlier, in which case the Board may close the Offer earlier than this date). If the Offer is not fully subscribed at that time, the Directors reserve the right to allow the Offer to remain open for at least part of the 2022/23 tax year, but not beyond 12.00 p.m. on 12 August 2022.
Applications under the Offer will normally be accepted on a first-come-first-served basis (provided cheques are not post-dated and with priority being given to applications with cleared funds), subject always to the discretion of the Board. The Board cannot guarantee a specific allotment date during the relevant tax year and applications which cannot be satisfied at one allotment date will be held for processing until a later allotment date in the relevant tax year.
The minimum subscription per Investor under the Offer is £5,000 in aggregate across both the 2021/2022 and 2022/2023 tax years. Applications in respect of less than £5,000 in aggregate will not be accepted. Multiple applications under the Offer from the same Investor in the same tax year will not be accepted as a means to achieving the minimum subscription.
The Offer Shares will be available to be issued in either registered form (i.e. certificated) or electronic form (i.e. via CREST). Offer Shares issued close to the end of the tax year may need to be issued in certificated form to allow the investment to be made within the required tax year. Definitive share certificates and income tax certificates
are expected to be despatched by post within 15 Business Days of each allotment of Offer Shares. Temporary documents of title will not be issued in connection with the Offer.
In the event that the Offer is fully subscribed (but assuming that the Over-allotment Facility is not used) and assuming an Offer Price of 103.35p per Offer Share (based on the NAV per Share as at 31 July 2021), the percentage of the Company owned by existing Shareholders (assuming they do not subscribe for additional Ordinary Shares under the Offer or otherwise acquire further Ordinary Shares) will decrease to 92 per cent. through the issue of the Offer Shares. In the event the Maximum Subscription is achieved (i.e. including the Overallotment Facility) and assuming an Offer Price of 103.35p per Offer Share (based on the NAV per Share as at 31 July 2021), the percentage of the Company owned by existing Shareholders (assuming they do not subscribe for additional Ordinary Shares under the Offer or otherwise acquire further Ordinary Shares) will decrease to 85 per cent. through the issue of the Offer Shares.
Investors under the Offer will indirectly bear the costs of the Offer through the application of the Pricing Formula which determines the Offer Price to be paid for the Offer Shares and includes an allowance for issue costs of 3.5 per cent. The costs of the Offer will be paid by the Administrator out of its fee of 3.5 per cent. of the gross proceeds of the Offer. To the extent that the expenses of the Offer exceed 3.5 per cent. of the gross proceeds of the Offer, the Administrator will bear the excess.
Commission is available to Financial Intermediaries: (i) acting on behalf of "execution only", non-advised UK retail clients; and (ii) following the provision of restricted advice to an Investor that is a Professional Client (as defined in COBS 3.5) of the Financial Intermediary, on the following basis:
All commissions to be paid to Financial Intermediaries will be paid by Canaccord Genuity Wealth Limited.
The introductory commission may be rebated by Financial Intermediaries and reinvested by them on behalf of their clients through additional Offer Shares (the rebate in each case may be in part or in whole in 25 per cent. increments).
The Company is not permitted to pay commission to Financial Advisers where advice has been given to UK retail investors in relation to their Subscription under the Offer. However, the Company can facilitate the payment of initial Adviser Charges on behalf of an Investor in relation to their subscription under the Offer. Any amount of initial Adviser Charges agreed to be facilitated is paid by the Subscriber from the monies received with their Subscription and is not paid by the Company.
The Company is seeking to raise further funds under the Offer primarily to allow it to take advantage of attractive investment opportunities in accordance with its investment policy. The net proceeds of the Offer will be pooled with the existing cash resources of the Company and utilised (i) to make new and follow-on investments in accordance with its investment policy and (ii) to help meet annual outgoings (including running costs, directors' fees and market purchases of Ordinary Shares).
The Offer is not underwritten. The total expenses payable by the Company in connection with the Offer (assuming the Offer is fully subscribed and no Offer Shares are issued under the Over-allotment Facility) are expected to be around £0.7 million (including amounts paid by way of fees and irrecoverable VAT where applicable) and the net proceeds of the Offer will amount to £19.3 million. If the Maximum Subscription is achieved, the total expenses payable by the Company in connection with the Offer are expected to be around £1.3 million (including amounts paid by way of fees and irrecoverable VAT where applicable) and the net proceeds of the Offer will amount to £38.7 million.
Oliver Bedford is an employee of Canaccord Genuity Fund Management and therefore has an interest in the arrangements between the Company and the Investment Manager. Oliver Bedford is also a Director of the Company and as such there may be a potential conflict of interest between his duties owed to the Company and to the Investment Manager in relation to these arrangements.
David Brock was appointed as chairman of Honest Brew Ltd, which is an investee company of the Company, on 25 July 2019. David sits on the board of Honest Brew Ltd as the Company's representative. David is also a shareholder in Honest Brew Ltd, however he does not control the entity.
The Investment Manager and its officers and employees may be involved in other financial, investment or professional activities that may on occasion give rise to conflicts of interest with the Company. In particular, the Investment Manager may provide investment management or other services in relation to a number of funds that may have similar investment policies to that of the Company.
The risk factors set out below are those which the Directors consider to be material but are not the only risks relating to the Company or the Ordinary Shares. There may be additional risks that the Directors do not currently consider to be material, or which are not presently known to the Directors. Before investing in the Ordinary Shares, potential investors should consult their stockbroker, bank manager, solicitor, accountant or other suitably qualified and independent financial adviser authorised under the FSMA if they are in the United Kingdom or, in the case of a potential investor who is located outside the United Kingdom, another appropriately authorised financial adviser.
An investment in the Company should not be regarded as short-term in nature and involves risks that could lead to the loss of all or part of that investment. An investment in the Company is only suitable for investors who are capable of evaluating the merits and risks of such an investment and who have sufficient resources to bear any loss which might result from such an investment.
The Directors believe that the risks described below are the material risks relating to an investment in the Ordinary Shares at the date of this document. If any of the adverse events described below occur, the financial condition, performance and prospects of the Company and the market price of the Ordinary Shares could be materially adversely affected and Shareholders may lose all or part of their investment. Additional risks which were not known to the Directors at the date of this Prospectus, or that the Directors considered to be immaterial at the date of this Prospectus, may also have an adverse effect on the financial condition, performance and prospects of the Company and the market price of the Ordinary Shares. Further, as required by the UK Prospectus Regulation, the risks that the Directors consider to be the most material risk in each category, taking into account the negative impact on the Company and the probability of its occurrence, have been set out first. Given the forward-looking nature of the risks, there can be no guarantee that such risk is, in fact, the most material or the most likely to occur. Prospective investors should, therefore, review and consider each risk.
Potential investors should carefully consider all the information in this document, including the following material risk factors in relation to the Company and the Ordinary Shares, before deciding to invest in the Company.
Any change of governmental, economic, fiscal, monetary or political policy, in particular any changes to taxation, tax reliefs and changes to the VCT Rules, could materially affect, directly or indirectly, the operation and/or the performance of the Company (and the portfolio companies in which it invests), the value of and returns from the Ordinary Shares and/ or the ability of the Company to achieve or maintain VCT status.
The information, including references to tax rules, contained in this document is based on existing legislation. The tax rules or their interpretation in relation to an investment in the Company and/or the rates of tax, or other statutory provisions to which the Company is subject, may change during the life of the Company and such changes could be retrospective. While it is the intention of the Directors that the Company will be managed so as to continue to qualify as a VCT, there can be no guarantee that this status will be maintained. A failure to meet the qualifying requirements could
result in the loss of tax reliefs previously obtained, resulting in adverse tax consequences for investors, including a requirement to repay the income tax relief obtained, and could also cause the Company to lose its exemption from corporation tax on capital gains.
A Shareholder who disposes of Ordinary Shares within five years of issue will be subject to clawback by HMRC of any income tax reliefs originally claimed on subscription. Any realised losses on a disposal of Ordinary Shares cannot be used to create an allowable loss for capital gains tax purposes.
As a result of the tax status of VCTs, investments by VCTs in underlying portfolio companies are regarded as state aided investments. Where the European Commission believes that state aid has been provided prior to 1 January 2021 which is not in accordance with the Risk Finance Guidelines, it may require that the UK government recovers that state aid. This may have an adverse effect on Shareholder returns. From 1 January 2021, the requirements to recover unlawful state aid is the remit of the UK Government (in compliance with its ongoing arrangements with the EU). On 30 June 2021, the Government introduced the Subsidy Control Bill
to Parliament and published its response to the consultation on the topic of subsidy control in a paper entitled 'Government response to the consultation on subsidy control'. As at the date of this Prospectus, it is unclear whether and how the proposals, if made into law, will affect the Company and VCTs in general.
A condition of the European Commission's State Aid approval of the UK's VCT and EIS schemes in 2015 was the introduction of a retirement date for the current schemes at midnight on 5 April 2025. This was passed into UK law through the Finance (No 2) Act 2015. If the relevant legislation is not renewed or replaced with similar or equivalent legislation, new investors will not be able to claim income tax relief for investments into new shares issued by VCTs after 5 April 2025, making it more difficult for the Company to attract new capital whilst continuing to operate under its current investment policy.
It is likely that the price for an Ordinary Share which a Shareholder could achieve on the stock market will be less than the prevailing NAV per Share. The Ordinary Shares may trade at a discount to the NAV per Share for a variety of reasons including as a consequence of general market conditions, concerns regarding the general liquidity or marketability of the Ordinary Shares or the actual or expected performance of the Company. The market value of, and the returns derived from, the Ordinary Shares may go down as well as up and an investor may not get back the amount invested.
The Company is a closed-ended investment company. Shareholders will have no right to have their Ordinary Shares redeemed or repurchased by the Company at any time. Shareholders wishing to realise their investment will be required to dispose of their Ordinary Shares on the stock market. Accordingly, the ability of Shareholders to realise the NAV per Share of, or any value in respect of, their Ordinary Shares is dependent on the existence of a liquid market in the Ordinary Shares and the market price of such Ordinary Shares.
Although the existing Ordinary Shares issued by the Company have been (and it is anticipated that the Offer Shares will be) admitted to the premium segment of the Official List and traded on the main market of the London Stock Exchange, if the Company is unable to maintain its share buyback policy (which has been put in place in order to enhance liquidity in the Ordinary Shares), there may not be a liquid market for the Ordinary Shares. Given that there is a limited secondary market for VCT shares (primarily because initial VCT income tax relief is only available to individuals subscribing for newly issued shares), Investors may find it difficult to realise their investments.
The primary focus of the Company's qualifying portfolio is on investments in AIM-traded companies. Investment in AIM-traded companies, by its nature, may involve a higher degree of risk than investment in companies traded on the main market of the London Stock Exchange. The valuation of the portfolio and opportunities for the Company to realise AIM-traded investments within the portfolio may also depend on market conditions. The fact that a share is traded on AIM does not guarantee its liquidity.
Although the primary focus of the Company's qualifying portfolio is on investments in AIM-traded companies, the Company has built a portfolio of investments in unlisted private companies and will make further investments in unlisted private companies if the Investment Manager identifies attractive investment opportunities. It is unlikely that there will be a liquid market for the shares and other securities that the Company holds in unlisted investee companies and, therefore, it may be difficult for the Company to realise such investments. The value of unlisted stock is often more difficult to determine than the value of stock in listed companies. In addition, valuations of the unquoted investments may be based on unaudited information and may be subject to limited verification or other due diligence. If the realised value of an unquoted investment or other asset held by the Company is less than its valuation, this may have a material adverse effect on future Shareholder returns.
At the point of investment, Qualifying Companies are often small companies which lack commercial maturity and carry high levels of investment risk. These Qualifying Companies may have limited product service lines and markets. They may also have limited financial resources, negative cash flows and require further funding in time. Qualifying Companies can be dependent for their management on a smaller number of key individuals, over-exposed to a small number of dominant customers, and more vulnerable to exogenous risks such as disruption to supply chains.
As a consequence of these risks, it may take time for new investments in Qualifying Companies to contribute to Shareholder returns and dividends payable by the Company and the levels of those returns may be volatile due to the nature of investing in earlier stage companies. The past performance of the Company or other funds managed or advised by the Investment Manager is not a guide to the future performance of the Company.
Investments in AIM-traded companies are likely to be more illiquid than investments in companies traded on the main market of the London Stock Exchange. Investments may not be able to be realised within a reasonable timeframe or at all. Such illiquidity may affect the ability of the Company to vary its portfolio or dispose of investments in a timely fashion and at satisfactory prices in response to changes in economic or other conditions. This could have an adverse effect on the financial condition and results of operations of the Company as it could reduce the profits and proceeds expected to be realised from such investments by the Company.
The Company has no employees and all of the Directors have been appointed on a non-executive basis. The Company relies upon third party service providers to perform certain functions. In particular, the Investment Manager, Administrator and Registrar will perform services that are integral to the Company's operations and financial performance.
The Company is dependent on the skills of the Investment Manager to manage its investments. If the Investment Manager ceases to act as investment manager or if key personnel cease to be employed by the Investment Manager or be involved in the management of the Company's portfolio, there is no assurance that suitable replacements will be found. If this occurs, there may be an adverse effect on the performance of the Company and the value of the Ordinary Shares.
The Company is also dependent on those service providers to protect against breaches of the Company's legal and regulatory obligations, including those in relation to data protection. Failure by any service provider to carry out its obligations to the Company in accordance with the terms of its appointment, to exercise due care and skill, or to perform its obligations to the Company at all as a result of insolvency, fraud, breaches of cybersecurity, failures in business continuity plans or other causes, could have a material adverse effect on the Company's operations and performance and on returns to Shareholders. The termination of the Company's relationship with any third party service provider, or any delay in appointing a replacement for any such service provider, could materially disrupt the business of the Company and could have a material adverse effect on the Company's performance and returns to Shareholders.
The COVID-19 pandemic and the measures taken to control the outbreak led to volatility in global equity markets and a substantial downturn in the UK's economy and the economies of many overseas countries. There remains considerable uncertainty about the future path of the pandemic and the longterm impacts. New variants of the virus may emerge over time that could result in the introduction of new restrictions, depress economic activity and lead to falls in equity markets in the UK and elsewhere, all of which could have a material adverse impact on the future investment returns of the Company, the price of the Ordinary Shares and the ability of the Investment Manager to find and realise suitable investments.
No person has been authorised to give any information or make any representations in connection with the Offer other than the information contained in, or incorporated by reference into, this document and, if given or made, such information or representations must not be relied on as having been authorised by or on behalf of the Company, the Investment Manager, the Sponsor or any of their respective affiliates, officers, directors, members, employees or agents.
Without prejudice to the obligations of the Company under applicable law and regulations, neither the delivery of this document nor any subscription for or purchase of Offer Shares made pursuant to the Offer shall, under any circumstances, create any implication that there has been no change in the business or affairs of the Company since the date of this document or that the information contained in this document, including any forward looking statements, is correct as at any time subsequent to the date of this document.
Prospective investors should consider carefully all of the information contained in, or incorporated by reference into, this document before making any application for Ordinary Shares and should rely only on that information when considering an investment in the Company. However, prospective investors should not treat the contents of this document or any subsequent communication from the Company, the Investment Manager, the Sponsor or any of their respective affiliates, officers, directors, members, employees or agents as advice relating to legal, financial, taxation, accounting, regulatory, investment or any other related matters. Prospective investors should inform themselves as to:
Prospective investors must rely on their own advisers as to legal, financial, taxation, accounting, regulatory, investment or any other related matters concerning the Company and an investment in the Ordinary Shares.
Apart from the responsibilities and liabilities, if any, which may be imposed on Dickson Minto W.S. by FSMA or the regulatory regime established thereunder, Dickson Minto W.S. makes no representation, express or implied, or accepts any responsibility whatsoever for the contents of this document or for any statement made or purported to be made by it or on its behalf in connection with the Company, the Investment Manager, the Offer Shares or the Offer. Accordingly, Dickson Minto W.S., to the fullest extent permitted by law, disclaims all and any responsibility and liability whether arising in tort, contract or otherwise (save as referred to above) which it might otherwise have in respect of this document or any such statement.
All Shareholders are entitled to the benefit of, and are bound by and are deemed to have notice of, the provisions of the Articles which prospective investors should review. A summary of the Articles is contained in paragraph 5 of Part 6 of this document.
This document does not constitute, and may not be used for the purposes of, an offer or solicitation to anyone in any jurisdiction: (i) in which such offer or solicitation is not authorised; or (ii) in which the person making such offer or invitation is not qualified to do so; or (iii) to whom it is unlawful to make such offer or solicitation. The distribution of this document and the offering of Ordinary Shares in certain jurisdictions may be restricted and accordingly persons into whose possession this document comes are required to inform themselves about and to observe such restrictions.
If you are in any doubt about the contents of this document you should consult your stockbroker, bank manager, solicitor, accountant or other professional or financial adviser.
Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("Directive 2014/65/EU"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing Directive 2014/65/EU; (c) local implementing measures; and/or (d) (where applicable to UK investors or UK firms) the relevant provisions of the UK MiFID Laws (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect
thereto, the Ordinary Shares have been subject to a product approval process, which has determined that the Ordinary Shares to be issued pursuant to the Offer are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties each as defined in Directive 2014/65/EU or the UK MiFID Laws, as applicable; and (ii) eligible for distribution through all distribution channels as are permitted by Directive 2014/65/EU or the UK MiFID Laws, as applicable (the "Target Market Assessment").
Notwithstanding the Target Market Assessment, distributors should note that: the price of the Ordinary Shares may decline and investors could lose all or part of their investment; the Ordinary Shares offer no guaranteed income and no capital protection; and an investment in the Ordinary Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Offer.
For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of Directive 2014/65/EU, or the UK MiFID Laws, as applicable; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Ordinary Shares.
Each distributor is responsible for undertaking its own target market assessment in respect of the Ordinary Shares and determining appropriate distribution channels.
As the Company is a Venture Capital Trust, the Ordinary Shares will be "excluded securities" under the FCA's rules on non-mainstream pooled investments. Accordingly, the promotion of the Ordinary Shares is not subject to the FCA's restriction on the promotion of non-mainstream pooled investments. The Company intends to conduct its affairs so that its Ordinary Shares can be recommended by financial advisers to retail investors in accordance with the rules on the distribution of financial instruments under UK MiFID Laws. The Directors consider that the requirements of Article
57 of the EU MiFID II delegated regulation of 25 April 2016 (and the equivalent provision of the UK MiFID Laws) are met in relation to the Ordinary Shares and that, accordingly, the Ordinary Shares should be considered "non-complex" for the purposes of EU MiFID II and the UK MiFID Laws.
In accordance with the UK PRIIPs Laws, a Key Information Document in respect of the Ordinary Shares has been prepared by the Company and is available to investors at www.hargreaveaimvcts.co.uk. If you are distributing the Ordinary Shares, it is your responsibility to ensure that the relevant Key Information Document is provided to any clients that are "retail clients". Investors should note that the procedures for calculating the risks, costs and potential returns disclosed in the KID are prescribed by the law. The figures in the KID may not reflect the expected returns for the Company and projected performance returns cannot be guaranteed.
The information that an investor (or any third party on behalf of an investor) provides to the Company or its agents in relation to a subscription for or purchase of Offer Shares or subsequently, by whatever means, which relates to the investor (if the investor is an individual) or a third party individual ("personal data") will be held and processed by the Company (and any third party, functionary or agent in the United Kingdom to whom the Company may delegate certain administrative or other functions in relation to the Company, including the Registrar) in compliance with (a) the relevant data protection legislation and regulatory requirements of the United Kingdom (the "Data Protection Legislation") and (b) the Company's privacy notice, a copy of which is available for consultation on the Company's website at www.hargreaveaimvcts.co.uk ("Privacy Notice") (and, if applicable, any other third party delegate's privacy notice).
Without limitation to the foregoing, each prospective investor (and any third party acting on behalf of a prospective investor) acknowledges that it has been informed that such information will be held and processed by the Company (or any third party, functionary, or agent appointed by the Company, which may include, without limitation, the Registrar) in accordance with and for the purposes set out in the Company's Privacy Notice which include:
● verifying the identity of the prospective investor to comply with statutory and regulatory requirements in relation to anti-money laundering procedures;
Where necessary to fulfil the purposes set out above and in the Privacy Notice, the Company (or any third party, functionary, or agent appointed by the Company, which may include, without limitation, the Registrar) will:
The foregoing processing of personal data is required in order to perform the contract with the prospective investor, to comply with the legal and regulatory obligations of the Company or otherwise is necessary for the legitimate interests of the Company.
If the Company (or any third party, functionary or agent appointed by the Company, which may include, without limitation, the Registrar) discloses personal data to such a third party, functionary or agent and/ or makes such a transfer of personal data, it will ensure that adequate safeguards are in place for the protection of such personal data, details of which shall be set out in the Privacy Notice or otherwise notified from time to time.
Prospective investors and any third parties acting on behalf of prospective investors, are responsible for informing any third party individual to whom the personal data relates of the disclosure and use of such data in accordance with these provisions. Individuals have certain rights in relation to their personal data; such rights and the manner in which they can be exercised are set out in the Company's Privacy Notice.
Certain financial and statistical information contained in this document has been rounded to the nearest whole number or the nearest decimal place.
Therefore, the actual arithmetic total of the numbers in a column or row in a table may not conform exactly to the total figure given for that column or row. In addition, certain percentages presented in the tables in this document reflect calculations based upon the underlying information prior to rounding, and, accordingly, may not conform exactly to the percentages that would be derived if the relevant calculations were based upon the rounded numbers.
Market, economic and industry data used throughout this document is sourced from various industry and other independent sources. The Company and the Directors confirm that such data has been accurately reproduced and, so far as they are aware and are able to ascertain from information published from such sources, no facts have been omitted which would render the reproduced information inaccurate or misleading.
Unless otherwise indicated, all references in this document to "£", "Sterling", "penny", "pence" or "p" are to the lawful currency of the UK.
Statements made in this document are based on the law and practice in force in England and Wales as at the date of this document and are subject to changes therein.
In this document, any reference to any EU directive, EU regulation, EU tertiary legislation or provision of the EEA agreement (an "EU Matter") which is to form part of UK law by application of section 3 of the European Union (Withdrawal) Act 2018 (as amended) ("EUWA") shall be read as a reference to that EU Matter as it forms (by virtue of section 3 of the EUWA) part of UK law and as modified by UK law from time to time, and the words and expressions used in this paragraph shall have the meanings given to them respectively in the EUWA.
The contents of the Company's website (www.hargreaveaimvcts.co.uk), or the contents of any website accessible from hyperlinks on the Company's website or any other website referred to in this document, do not form part of this document. Investors should base their decision whether or not to invest in the Ordinary Shares on the contents of this document alone.
Shareholders should furnish any information and documents the Company may from time to time request, including but not limited to information required under FATCA or CRS. Shareholders may be subject to tax reporting under applicable laws. FATCA and CRS documentation and reporting obligations can also arise in respect of Shareholders where third parties hold shares or act on their behalf. The Company's Registrar will request such information from certain Shareholders.
This document includes forward looking statements concerning the Company that are based on the current expectations of the Board and are naturally subject to uncertainty and changes in circumstances. Forward looking statements include, without limitation, statements containing the words "believes", "intends", "expects", "anticipates", "targets", "estimates" or their negative or other similar expressions.
Such forward looking statements involve risks, uncertainties and other factors which may cause the actual results, financial condition, performance or achievements of the Company, or industry results, to be materially different from future results, financial condition, performance or achievements expressed or implied by such forward looking statements. Given these risks and uncertainties, prospective investors should not place undue reliance on such forward looking statements as a prediction of actual results.
Such forward looking statements speak only as at the date of this document. Subject to its legal and regulatory obligations, the Company expressly disclaims any obligation to update or revise any forward looking statement contained in this document to reflect any change in expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. Information in this document will be updated as required under the Prospectus Regulation Rules, the Listing Rules and/or the Disclosure Guidance and Transparency Rules.
Nothing in the preceding three paragraphs seeks to limit or qualify in any way the working capital statement in relation to the Company included in the section titled 'Working Capital' in Part 4 of this document.
The distribution of this document and the offering of Offer Shares in jurisdictions other than the United Kingdom may be restricted by law or regulation and accordingly persons into whose possession this document comes are required to inform themselves about and observe any such restrictions. No action has been taken to permit the distribution of this document and the offering of Offer Shares in any jurisdiction outside the United Kingdom where such action is required to be taken.
This document does not constitute, and may not be used for the purposes of, an offer to sell, or the solicitation of an offer to acquire or subscribe for, Offer Shares in any jurisdiction in which such offer or solicitation is unlawful or would impose any unfulfilled registration, qualification, publication or approval requirements on the Company, the Sponsor, or the Investment Manager or to any person to whom it is unlawful to make such offer or solicitation. If you receive a copy of this document in any territory other than the United Kingdom, you may not treat it as constituting an invitation or offer to you. It is your responsibility, if you are outside the United Kingdom, to satisfy yourself that you have fully observed the laws of any relevant territory in connection with your receipt of this document and/or Offer Shares, including obtaining any requisite governmental or other consents, observing any other formalities requiring to be observed in such territory and paying any issue, transfer or other taxes required to be paid in such territory.
Without limiting the above, the Offer Shares have not been, and will not be, registered under the US Securities Act or under any of the relevant securities laws of, or with any securities regulatory authority of, any state of the United States or of Canada, Australia, Japan, New Zealand or the Republic of South Africa. Accordingly, unless an exemption under such act or laws is applicable, the Offer Shares may not be offered, sold or delivered, directly or indirectly, in or into the United States, Canada, Australia, Japan, New Zealand or the Republic of South Africa or to, or for the account or benefit of, any resident of the United States, Canada, Australia, Japan, New Zealand or the Republic of South Africa. The Company has not been and will not be registered under the US Investment Company Act and recipients of this document and investors will not be entitled to the benefits of that Act.
In this document, where the context requires, references to 31 August 2021 should be treated as being references to the latest practicable date prior to the publication of this document.
Hargreave Hale AIM VCT is an established Venture Capital Trust that aims to generate capital gains and income from its portfolio and to make distributions to Shareholders from capital or income whilst maintaining its status as a Venture Capital Trust. Although the Company's Qualifying Investments are primarily in companies that are listed on AIM, it also makes investments in private companies. The Company may also make Non-Qualifying Investments in equities and exchange traded funds listed on the main market of the London Stock Exchange, fixed income securities, bank deposits and the Marlborough Special Situations Fund.
The Company was approved as a VCT by HMRC at launch in 2004. It has at all times satisfied the various tests required to maintain its status as a VCT.
The HMRC investment tests are set out in Chapter 3 of Part 6 of the Income Tax Act 2007. Funds raised by VCTs are first included in the investment tests from the start of the accounting period containing the third anniversary of the date on which the funds were raised. Therefore, the allocation of Qualifying Investments as defined by the legislation can be different to the portfolio weighting as measured by market value relative to the net assets of the Company.
Hargreave Hale was founded in 1897. It has been part of the Canaccord Genuity Wealth group of companies since September 2017. The Investment Manager is a leading UK small cap fund manager with more than £6.3bn of funds under management across eight unit trusts/OEICs and the Company, including approximately £4.4bn invested in small UK companies (all as at 31 July 2021).
As at 2 September 2021, the fund management team consisted of 18 fund managers and analysts.
Canaccord Genuity Wealth Limited ("CGWL") is a subsidiary of Canaccord Genuity Inc., a financial services company listed on the Toronto Stock Exchange. CGWL has provided administration and custodian services to the Company since June 2019.
(1)The boxes above set out key figures relating to the Investment Manager's fund management business as at 31 July 2021
| Number of Offer Shares | The number of Offer Shares to be allotted under the Offer will be determined by the Offer Price in respect of each allotment and the amounts applied for under the Offer by investors1 |
|---|---|
| Offer Price | The last published NAV per Share prior to the date of the relevant allotment (adjusted as necessary for dividends declared but not yet paid if the allotment occurs whilst the existing Ordinary Shares are classified as ex-dividend) plus a premium of 3.5 per cent. to such last published NAV per Share |
| Maximum gross proceeds of the Offer |
£20 milion (with an over-allotment facility to raise up to a further £20 million) |
| Minimum Subscription per Investor under the Offer2 |
£5,000 |
1 Details on how the Offer Price will be calculated, together with details relating to Financial Intermediary commission and facilitation of Adviser Charges, are set out in Part 3 of this document.
2 In aggregate if an application is for both tax years.
| ISIN | GB00B02WHS05 |
|---|---|
| SEDOL | B02WHS0 |
| Ticker code | HHV |
| LEI | 213800LRYA19A69SIT31 |
| Offer opens | 2 September 2021 |
|---|---|
| First allotment under the Offer | On or around 11 October 2021 |
| Subsequent allotments | Monthly (or at such other times as the Board, in its sole discretion, may determine) |
| Closing date for the 2021/2022 tax year | 12.00 p.m. on 1 April 2022 |
| Offer closes | 12.00 p.m. on 12 August 2022 (unless the Offer is fully subscribed or otherwise closes earlier) |
| Dealings in New Shares commence | within 5 Business Days after the relevant allotment |
| CREST accounts credited | within 10 Business Days after the relevant allotment |
| Definitive share certificates and income tax relief certificates despatched |
within 15 Business Days after the relevant allotment |
Notes:
| Directors | David Brock, Chairman Oliver Bedford Ashton Bradbury Angela Henderson Justin Ward |
|---|---|
| All Directors are non-executive and in all cases of: Talisman House, Boardmans Way, Blackpool FY4 5FY |
|
| Investment Manager | Hargreave Hale Limited (trading as Canaccord Genuity Fund Management) 41 Lothbury London EC2R 7AE |
| Administrator, Custodian and Receiving Agent |
Canaccord Genuity Wealth Limited c/o Talisman House Boardmans Way Blackpool FY4 5FY |
| Sponsor and solicitor to the Offer | Dickson Minto W.S. Broadgate Tower 20 Primrose Street London EC2A 2EW |
| Company Secretary | JTC (UK) Limited The Scalpel 18th Floor 52 Lime Street London EC3M 7AF |
| Registrars | Equiniti Limited Aspect House Spencer Road Lancing West Sussex BN99 6DA |
| VCT taxation advisers | Philip Hare & Associates LLP Hamilton House 1 Temple Avenue London EC4Y 0HA |
| Brokers to the Company | Singer Capital Markets Advisory LLP 1 Bartholomew Lane London EC2N 2AX |
| Distributor | Portunus Investment Solutions Limited Suite 416 83 Victoria Street London SW1H 0HW |
| Auditors | BDO LLP 55 Baker Street London W1U 7EU |
(Incorporated in England and Wales under the Companies Act 1985 with registered number 05206425)
Directors David Brock (Chairman) Oliver Bedford Ashton Bradbury Angela Henderson Justin Ward
Registered Office Talisman House Boardmans Way Blackpool FY4 5FY
2 September 2021
Dear Investor,
Further to the announcement released by the Company on 22 June 2021, the Board is pleased to launch a new offer for subscription (the "Offer") to raise up to £20 million, together with an Over-allotment Facility which will allow the Company to raise up to an additional £20 million. This follows the success of the Company's previous offer for subscription, which closed on 15 April 2021, under which the Company raised £30 million gross.
The Investment Manager has made good progress deploying the proceeds of the 2020/2021 offer with the Company expecting to return to full investment in the early part of the next financial year. The Offer will provide the Company with additional capital for further investment in accordance with its investment policy, in many cases in support of existing portfolio companies as they continue to grow and invest. At the same time, the Offer will allow new and existing investors to gain or add to their exposure to public companies traded on AIM and to private companies through an investment company listed on the premium segment of the London Stock Exchange, whilst benefitting from a tax efficient structure and an award-winning fund management team.
The Offer will remain open until 12.00 p.m. on 1 April 2022 for Investors seeking tax relief in the 2021/22 tax year and 12.00 p.m. on 12 August 2022 for Investors seeking tax relief in the 2022/23 tax year, unless the Offer is fully subscribed at an earlier date.
In line with previous offers, Canaccord Genuity Wealth Limited will offer an 'early bird discount' of up to two per cent. on the initial fee for those applications received by CGWL by 5.00 p.m. on Friday, 29 October 2021, subject to a maximum aggregate subscription under the 'early bird offer' of £15 million. The two per cent. discount (to the standard 3.5 per cent. initial fee) will only apply to applications which do not trigger the payment of introductory commission to a Financial Intermediary. In such cases, the available discount will fall to one per cent. Discounts are paid through the allotment of additional Offer Shares to the subscriber. CGWL reserves the right to vary the terms of the 'early bird offer', including to revoke such offer, at any time and in its sole discretion.
The Company is an established Venture Capital Trust that aims to generate capital gains and income from its portfolio and to make distributions to Shareholders from capital or income whilst maintaining its status as a Venture Capital Trust. Although the Company's Qualifying Investments are primarily in companies that are listed on AIM, it also has investments in private companies. The Company may also make Non-Qualifying Investments in equities and exchange traded funds listed on the main market of the London Stock Exchange, fixed income securities, bank deposits and the Marlborough Special Situations Fund.
The Company offers investors exposure to a mature and well-diversified portfolio of small companies managed by Hargreave Hale (trading as Canaccord Genuity Fund Management). As at 31 July 2021, of the 76 Qualifying Companies in the Company's portfolio, 68 are listed on AIM and represent 61.5 per cent. of the Company's NAV by market value. The portfolio of Qualifying Investments also includes 8 investments in private companies, which represent 13.3 per cent. of the Company's NAV by market value. Evidence of the Company's commitment to diversification can be found in the top 10 investments, which are all Qualifying Investments and represent 31.6 per cent. of the Company's NAV as at 31 July 2021. In keeping with the investment policy, as at 31 July 2021 the Company has a focused portfolio of 28 main market listed Non-Qualifying Investments which the Investment Manager believes balances the desire to drive Shareholder returns with the need to support portfolio liquidity.
The balance of the portfolio comprises readily realisable bank deposits and a small investment in the Marlborough Special Situations Fund.
The portfolio of Qualifying Investments has been built steadily since launch in 2004. The Investment Manager's preference for long term investment has allowed these investments to mature over time with 14 companies now held for more than 10 years. Consistent with the VCT Rules, Qualifying Companies are often very small at the point of investment; however, the passage of time means that the market capitalisation of Qualifying Companies within the Company's portfolio varies from less than £10 million to greater than £1,000 million, with a weighted average of £386.3 million. Revenues and profits vary significantly, too. Some companies are pre-revenue whilst others have revenues in the hundreds of millions, the weighted average being £72.5 million. Whilst many Qualifying Companies are loss making at the point of investment, the increasing levels of maturity within the portfolio means that many Qualifying Companies are profitable. The weighted average profit before tax across the Company's portfolio of Qualifying Companies is £2.2 million, all as at 31 July 2021.
The Company invests across all available investment sectors, although the VCT Rules tend to promote investment into sectors such as technology, healthcare and consumer discretionary. The sector exposures are well balanced and represent 30.6 per cent., 28.7 per cent. and 21.5 per cent. of the Company's NAV respectively as at 31 July 2021.
Further information on the Company's investment portfolio can be found on page 52 in this document.
Whilst passage through the Government's four stage roadmap out of lockdown has not been without its challenges, significant progress has been made and much of the UK economy is once again operating without restriction. Despite setbacks, the economy has recovered more quickly than many had anticipated. Household wealth is high as a consequence of Government support and employment is strong. Companies are trading well, in many cases ahead of expectations.
Some sectors are reporting both demand and supply shocks. A squeeze on the labour market is another area of concern and inflationary pressures are building. The expectation is that these will ease next year as supply chains recover, labour market liquidity improves and we settle into life outside of the European Union; however, this is not a universally held view. Despite the success of the UK vaccine programme, we should also acknowledge that there remains considerable uncertainty about the future path of the pandemic. New variants of the virus may emerge that could result in the introduction of new restrictions, depress economic activity and negatively impact portfolio companies and the performance of the Company.
In the ten months to 31 July 2021, the unaudited NAV per share increased from 73.66 pence to 99.73 pence. A final dividend of 2.65 pence was paid on 11 February 2021 and an interim dividend of 1.75 pence was paid on 30 July 2021, giving a NAV total return to investors of +30.47 pence per Ordinary Share, which translates to a gain of +41.37 per cent. as at 31 July 2021. The NAV total return (dividends reinvested) for the period was +42.10 per cent. compared with +31.36 per cent. for the FTSE AIM All-share Index Total Return and +25.78 per cent. for the FTSE All-Share Index Total Return.
The Board believes that the Offer is an attractive investment opportunity for both existing Shareholders and new investors for the following reasons:
The Investment Manager's experienced investment team continues to see a steady flow of VCT qualifying opportunities from companies in the AIM market and also in the unquoted sector, which may need capital in the medium term.
The Company has a well-established track record of paying out tax free dividends to Shareholders and its dividend policy is to target a tax free dividend yield equivalent to 5 per cent. of the Company's year end Net Asset Value subject to performance, the availability of distributable reserves, cash resources and the VCT rules.
Investors who pay income tax in the United Kingdom should be able to claim up to 30 per cent. income tax relief at the point of investment provided they pay sufficient income tax to offset against the claim for income tax relief and commit to holding their Ordinary Shares for at least 5 years. Other tax reliefs available to Investors include an exemption from income tax on any dividend distributions made by the Company and an exemption from capital gains tax on disposal of their Ordinary Shares. Investors should note that VCT investments are not loss allowable for the purposes of capital gains tax. Tax reliefs can be subject to change and are dependent on an individual's circumstances, and we encourage Investors to consult their accountant or financial adviser and confirm their suitability before proceeding with an investment in the Company. Please see Part 5 of this document for further information on the tax implications of an investment in the Company.
Information on the Dividend Reinvestment Scheme operated by the Company is set out in paragraph 2.2 of Part 2 of this document. Investors may elect to participate in the DRIS when applying for Offer Shares by completing the DRIS Mandate Form set out at the end of this document. Investors should read the DRIS terms and conditions before completing the DRIS Mandate Form. These can be downloaded from the Company's website at www. hargreaveaimvcts.co.uk or by contacting the Company's Registrar, Equiniti Limited on 0371 384 2714 (+44 121 415 7047 from overseas). Lines are open Monday to Friday, 8:30 a.m. to 5:30 p.m. (excluding public holidays in England and Wales).
Investors' attention is drawn to the consultation currently being undertaken by the FCA in relation to amendments to the Key Information Document produced by VCTs in accordance with UK PRIIPS Laws. In Consultation Paper CP21/23 (published on 1 July 2021), the FCA proposes to require that Key Information Documents issued by VCTs must be assigned a summary risk indicator (SRI) of no lower than 6. The FCA states that this change should ensure investors will be better informed of the nature of the risk of investing in VCTs. If this proposal is made into law, the Company's SRI will increase as a result of the mandatory minimum SRI prescribed. The Board wishes to make prospective investors aware of this potential change and also draws investors' attention to the 'Risk Factors' set out on pages 13 to 15 of this Prospectus.
Before making a decision to invest in the Company under the Offer, it is recommended that prospective investors seek advice from a financial adviser authorised under the FSMA. If you have any questions about the Offer application process, please contact Canaccord Genuity Wealth Limited on 01253 376 622 or email [email protected]. The suitability (or otherwise) of any investment in the Company will depend on your individual circumstances and neither the Investment Manager nor CGWL will be able to provide investment advice in connection with the Company or the Offer.
Persons wishing to participate in the Offer should complete the Application Form that accompanies this document in accordance with the instructions printed thereon. The completed Application Form together with your cheque or banker's draft should be sent by post, or delivered by hand (during normal business hours only), to Canaccord Genuity Wealth Limited, c/o Talisman House, Boardmans Way, Blackpool FY4 5FY so as to be received no later than 12.00 p.m. on 1 April 2022 for investment in the 2021/22 tax year and no later than 12.00 p.m. on 12 August 2022 for investment in the 2022/23 tax year (unless the Offer is closed prior to those dates). If you post your Application Form you are recommended to use first class post and to allow at least two Business Days for delivery.
CGWL will confirm receipt of valid applications once it has reviewed each application to confirm it is valid and completed mandatory anti-money laundering checks, which are based on information provided within the Application Form. Ordinary Shares are typically allotted on a monthly basis, although the board has discretion to vary this.
The Company's registrars, Equiniti, will send out share certificates within 15 Business Days along with an introduction to the services they provide, including their online portal through which Shareholders can access a range of information about their shareholding, the Company and dividend payment profiles, elect to receive electronic communications and join the Dividend Reinvestment Scheme.
If you have any queries on the procedure for application and payment, you should contact CGWL (telephone 01253 376 622) or your normal financial adviser.
Yours sincerely, David Brock, Chairman Hargreave Hale AIM VCT plc
The investment objectives of the Company are to generate capital gains and income from its portfolio and to make distributions from capital or income to Shareholders whilst maintaining its status as a Venture Capital Trust.
The Company intends to achieve its investment objectives by making Qualifying Investments in companies listed on AIM, private companies and companies listed on the AQSE Growth Market, as well as Non-Qualifying Investments as allowed by the VCT Rules.
The Investment Manager will maintain a diversified portfolio of Qualifying Investments which may include equities and fixed interest securities as permitted by the VCT Rules. Investments will primarily be made in companies listed on AIM but may also include private companies that meet the Investment Manager's criteria and companies listed on the AQSE Growth Market. These small companies will be UK based or have a UK presence and, whilst of high risk, will have the potential for significant capital appreciation.
To maintain its status as a VCT, the Company must have 80 per cent. by value as measured by the VCT Rules of all of its investments in Qualifying Investments throughout accounting periods of the VCT beginning no later than three years after the date on which those Shares are issued. To provide some protection against an inadvertent breach of this rule, the Investment Manager targets a threshold of approximately 85 per cent.
The Non-Qualifying Investments must be permitted by the VCT Rules and may include equities and exchange traded funds listed on the main market of the London Stock Exchange, fixed income securities, bank deposits that are readily realisable and the Marlborough Special Situations Fund. Subject to the investment controls below, the allocation to each of these investment classes will vary to reflect the Investment Manager's view of the market environment and the deployment of funds into Qualifying Companies. The market value of the Non-Qualifying Investments (excluding bank deposits) will vary between nil and 50 per cent. of the net assets of the Company. The value of funds held in bank deposits will vary between nil and 30 per cent. of the net assets of the Company.
The Company may make co-investments in investee companies alongside other funds, including other funds managed by the Investment Manager.
Other than bank deposits, no individual investment shall exceed 10 per cent. of the Company's net assets at the time of investment.
The Articles permit the Company to borrow up to 15 per cent. of its adjusted share capital and reserves (as defined in the Articles). However, it is not anticipated that the Company will have any borrowings in place and the Directors do not intend to utilise this authority.
To the extent that any future changes to the Company's investment policy are considered to be material, Shareholder consent to such changes will be sought. Such consent applies to the formal investment policy described above and not the investment process set out below.
The Investment Manager follows a stock specific investment approach based on fundamental analysis of the investee company.
The Hargreave Hale fund management team has significant reach into the market and meets with a large number of companies each week. These meetings provide insight into investee companies, their end markets, products and services, or their competition. Investments are monitored closely and the Investment Manager usually meets or engages with their senior leadership team at least twice each year. Where appropriate, the Company may coinvest alongside the other funds managed by the Investment Manager.
The key selection criteria used in deciding which investments to make include, inter alia:
Investments are made to support the growth and development of a Qualifying Company. The Investment Manager will maintain a diversified portfolio that balances opportunity with risk and liquidity. Qualifying Investments will primarily be made in companies listed on AIM but may also include private companies and companies listed on the AQSE Growth Market. Seed funding is rarely provided and only when the senior leadership team includes proven business leaders known to the Investment Manager.
Working with advisers, the Investment Manager will screen opportunities, often meeting management teams several times prior to investment to gain a detailed understanding of the company. Investments will be sized to reflect the risk and opportunity over the medium and long term. In many cases, the Investment Manager will provide further funding as the need arises and the investment matures. When investing in private companies, the Investment Manager will shape the investment to meet the investee company's needs whilst balancing the potential for capital appreciation with risk management.
Investments will be held for the long term unless there is a material adverse change, evidence of structural weakness, or poor governance and leadership. Partial realisations will be made where necessary to balance the portfolio or, on occasion, to capitalise on significant mispricing within the stock market.
The Hargreave Hale VCT team works closely with the wider Hargreave Hale fund management team to deliver the investment strategy when making Non-Qualifying Investments, as permitted by the VCT Rules. The Investment Manager will vary the exposure to the available asset classes to reflect its view of the equity markets, balancing the potential for capital appreciation with risk management, liquidity and income.
The Non-Qualifying Investments will typically include a focused portfolio of direct investments in companies listed on the main market of the London Stock Exchange. The portfolio will mix long term structural growth with more tactical investment to exploit short term mispricing within the market.
The use of the Marlborough Special Situations Fund enables the Company to maintain its exposure to small UK companies whilst the Investment Manager identifies opportunities to invest the proceeds of fundraisings into Qualifying Companies.
The Investment Manager may use certain exchange traded funds listed on the main market of the London Stock Exchange to gain exposure to asset classes not otherwise accessible to the Company.
The Investment Manager has strengthened its approach to environmental, social and governance ("ESG") issues. It has integrated a review of ESG issues as part of its investment decision-making process for investments in Qualifying Companies that seeks to identify material issues in the following areas:
The Investment Manager will seek to engage and influence companies on any areas of improvement identified through due diligence and material ESG issues that arise during the term of the investment.
The Investment Manager has published its stewardship policy in accordance with the requirements of the UK Stewardship Code 2020, which has introduced a requirement to take ESG factors (including climate change) into account in the investment process and for ongoing engagement with investee companies.
The structure of the Company's investment portfolio and its investment strategy, has been developed to mitigate risk where possible. Key risk mitigation strategies are as follows.
The Investment Manager manages other funds that can invest in the same companies as the Company, including the Marlborough Special Situations Fund, the Marlborough UK Micro Cap Growth Fund and the Marlborough Nano-Cap Growth Fund. Therefore, in appropriate circumstances, the Company will invest alongside other funds managed by the Investment Manager. Where the Company is co-investing alongside other funds managed by the Investment Manager, the Investment Manager will take into account factors such as the risk profile and investment strategy of the participating funds when deciding how much each fund will invest.
Investments through a new issue of shares or securities must be made on the same terms as any other fund(s) managed by the Investment Manager unless the investment is approved by the Board. Subject to any constraints relating to the availability of VCT qualifying shares, any scaling back of applications made by the Investment Manager on behalf of the different funds it manages will be on a pro rata basis to the amount originally requested for each fund.
If the Investment Manager intends to invest through a new issue of shares or securities in a company in which another fund managed by the Investment Manager has an existing position, but is not intending to participate in the issue, then the Investment Manager must give due consideration to any potential conflict of interest and, where necessary, refer the matter to the Board for approval.
The Investment Manager provides details of all co-investments made by the Company to the Board on a quarterly basis.
The Company aims to improve liquidity and to maintain a discount of approximately 5 per cent. to the last published NAV per Share (as measured against the mid-price) by making secondary market purchases of its Ordinary Shares in accordance with parameters set by the Board.
This policy is non-binding and at the discretion of the Board. Its operation depends on a range of factors including the Company's liquidity, Shareholder permissions, market conditions and compliance with all laws and regulations. These factors may restrict the effective operation of the policy and prevent the Company from achieving its objectives.
- - - Hargreave Hale AIM VCT plc Source: Bloomberg and Hargreave Hale Ltd
Description: Creo is a medical device company focused on the emerging field of surgical endoscopy. FY20 revenue: £9m Market cap: £330m
Description: Ilika is a leading authority for the design and manufacture of solid state batteries. Ilika is commercialising its Stereax®️ miniature batteries for powering implantable medical devices and industrial wireless sensors. It is also developing large format Goliath cells for electric vehicles and cordless appliances.
FY21 revenue £2m Market cap: £205m
Description: Escape Hunt is a global leader in escape-theroom experiences delivered through a network of owned sites in the UK and an international network of franchised outlets.
FY20 revenue: £3m
Market cap: £31m
Description: Learning Technologies Group (LTG) provides a range of market-leading content and platform solutions for digital learning in the workplace and talent management. FY20 revenue: £132m Market cap: £1,688m
The Company's dividend policy is to target a tax free dividend yield equivalent to 5 per cent. of the year end Net Asset Value.
The Company has a well-established track record of paying out tax free dividends to Shareholders. Whether a Shareholder qualifies to receive tax free dividends from the Company or not will depend on the personal circumstances of each individual Shareholder. If an Investor is uncertain as to their tax position they should consult their accountant or financial adviser.
The Company aims to pay an interim dividend in July each year and a final dividend in February. Special dividends may also be paid by the Company following significant realisations of investments.
The ability to pay dividends is also dependent on the Company's available reserves and cash resources, the Act, the Listing Rules and the VCT Rules. The policy is non-binding and at the discretion of the Board. Dividend payments may vary from year to year in both quantum and timing. The level of dividend paid each year will depend on the performance of the Company's portfolio. In years where there is strong investment performance, the Directors may consider a higher dividend payment, including the payment of special dividends. In years where investment performance is not as strong, the Directors may reduce or even pay no dividend.
In common with many other VCTs and in accordance with the terms of the Articles, the Company has revoked its status as an investment company to allow it to pay dividends out of capital profits.
VCTs can distribute realised capital profits from the sale of underlying investments and income by way of dividends, which are free of income tax to Investors (subject to each individual Investor's personal circumstances). The Directors intend that the Company will take advantage of this by distributing some or all of its realised capital profits from time to time. The distribution of realised capital profits will have a negative impact on the Company's NAV per Share.
Dividends are paid after the period end to which they relate. The Company made dividend payments to shareholders equal to 5.00p per Ordinary Share in the financial year to 30 September 2020 comprising a special dividend of 1.75p paid on 28 November 2019, a final dividend of 2.25p for the year to 30 September 2019 paid on 11 February 2020 and an interim dividend of 1.00p for the six months to 31 March 2020 paid on 24 July 2020. Including the special dividend of 1.75p per Ordinary Share, there were three dividends payable in relation to the year to 30 September 2020 giving a total distribution of 5.40p per Ordinary Share, with the final dividend paid within the current financial year. The dividends payable for the year gave a yield of 5.0% excluding the special dividend and 7.3% including the special dividend.
The chart below shows the annual dividends payable in relation to the last five full financial years to holders of Ordinary Shares. The dividend yield is the dividends payable in relation to a financial year expressed as a percentage of the relevant closing NAV per Share.
Annual dividends payable by �nancial year(including special dividends) Dividend yield (excluding special dividends)
1. Total dividends distributed to Shareholders since launch
Source: Canaccord Genuity Wealth Limited
The Company operates a dividend reinvestment scheme through the Company's Registrar. The continued operation of the DRIS is conditional on Shareholders passing Resolution 2 and Resolution 4 at the General Meeting. Under the DRIS, Shareholders may elect to re-invest dividends that they are due to receive from the Company in new Ordinary Shares allotted for that purpose. This provides the Company with additional funds for investment. As new Ordinary Shares will be issued, Shareholders are also able to claim tax reliefs on the Ordinary Shares issued under the DRIS, including 30 per cent. income tax relief on their investment (subject to the terms of the VCT Rules and the personal circumstances of the Shareholder). Please note, however, that Ordinary Shares issued under the DRIS count towards the annual limit for tax reliefs granted to VCT investors.
Under the DRIS, Shareholders can elect, by completing the DRIS Mandate Form set out at the end of this document, to re-invest all future dividends in new Ordinary Shares. If Shareholders complete the DRIS Mandate Form, thereby confirming that they want to receive new Ordinary Shares in respect of the full number of Ordinary Shares in their holding, the dividends that they would be entitled to receive on Ordinary Shares issued under the DRIS will also be re-invested.
Where a valid election is in place, new Ordinary Shares will be issued under the DRIS at a price equivalent to the greatest of:
each as at the close of business on the tenth Business Day preceding the date of issue of such Ordinary Shares.
The Company will not issue more than 10 per cent. of the Company's issued share capital in any 12 month period under the DRIS. If this limit is reached, the entitlements of each DRIS participant will be scaled back on a pro-rata basis.
If required, additional Shareholder authority to issue Ordinary Shares under the DRIS may be sought by the Company at further general meetings if deemed appropriate by the Board.
| 1Y | 2Y | 3Y | 4Y | 5Y | 10Y | |
|---|---|---|---|---|---|---|
| NAV total return (1)(2) | 54.34% | 53.08% | 32.84% | 49.04% | 67.94% | 117.78% |
| Share price total return (3) | 52.19% | 53.98% | 30.76% | 49.73% | 69.93% | 124.25% |
| NAV total return (dividends reinvested) (1)(4) | 55.14% | 57.76% | 39.93% | 59.18% | 82.71% | 171.87% |
| Share price total return (dividends reinvested) (5) | 53.11% | 59.03% | 38.12% | 60.46% | 85.66% | 178.20% |
| FTSE AIM All-Share Total Return | 42.59% | 37.03% | 18.40% | 33.23% | 76.00% | 62.19% |
| FTSE All-Share Total Return | 26.64% | 4.15% | 5.48% | 15.13% | 32.28% | 90.66% |
Source: Canaccord Genuity Fund Management and Bloomberg. Past performance is not a guide to future performance.
(1) Returns based on unaudited NAV as at 31 July 2021, excluding any income tax relief, offer costs or reduction in value that might occur if the achieved sale price of the Shares was lower than the published NAV.
(2) The NAV total return is calculated by adding the dividends paid in the period to the closing NAV per share and measuring the percentage change relative to the opening NAV per share.
(3) The share price total return is calculated by adding the dividends paid in the period to the closing mid price and measuring the percentage change relative to the opening mid price.
(4) The NAV total return (dividends reinvested) shows the percentage movement in the NAV total return per share over time taking into account both capital returns and dividends paid assuming dividends are re-invested into new shares.
(5) The performance of the Company's share price on a total return basis assuming dividends are reinvested in new shares at the mid-price of the shares on the ex-dividend date.
| 07/2020 to 07/2021 |
07/2019 to 07/2020 |
07/2018 to 07/2019 |
07/2017 to 07/2018 |
07/2016 to 07/2017 |
|
|---|---|---|---|---|---|
| NAV total return (dividends reinvested) (1) | 55.14% | 1.69% | -11.30% | 13.76% | 14.78% |
| Share price total return (dividends reinvested) | 53.11% | 3.86% | -13.14% | 16.17% | 15.70% |
| FTSE AIM All-Share Total Return | 42.59% | -3.90% | -13.60% | 12.53% | 32.10% |
| FTSE All-Share Total Return | 26.64% | -17.76% | 1.27% | 9.15% | 14.90% |
Source: Canaccord Genuity Fund Management and Bloomberg. Past performance is not a guide to future performance.
(1) Returns based on unaudited NAV as at 31 July 2021, excluding any income tax relief, offer costs or reduction in value that might occur if the achieved sale price of the Shares was lower than the published NAV.
Based on historical NAV performance, a shareholder who held Ordinary Shares for the 5 years to 31 July 2021 could have achieved an illustrative shareholder total return of 120.0 per cent. and 136.7 per cent. on a total return dividends reinvested basis. If achieved, this would equate to illustrative 5-year annualised returns of 17.1 per cent. and 18.8 per cent. respectively.
Calculated on the same basis, the illustrative shareholder total returns over 5 years without income tax relief would be 54.0 per cent. and 65.7 per cent. on a total return dividends reinvested basis. If achieved, this would equate to illustrative 5-year annualised returns of 9.0 per cent. and 10.6 per cent. respectively.
Investors should note that there were no offer shares issued in August 2016 and that this illustration highlights an illustrative return using published NAV per Share information and other relevant inputs. The illustration assumes the shares were issued at a 3.5 per cent. premium to the 31 July 2016 NAV per Share in accordance with the Company's pricing formula and then sold at the mid-price of the Company's Ordinary Shares on 3 August 2021, which represented a discount of 5.7 per cent. to the 31 July 2021 NAV per Share as published on 3 August 2021.
The illustrative return is calculated by expressing the illustrative shareholder total return, with and without dividends reinvested, as a percentage of the net book cost, being the subscription amount less the 30 per cent. income tax relief. The illustrated return also assumes an Investor is able to claim the 30 per cent. income tax relief in full. Past performance is not a guide to future performance.
(1) Past performance is not a guide to future performance.
Hargreave Hale Limited (now trading as Canaccord Genuity Fund Management) which was founded in 1897, is a wholly owned subsidiary of Canaccord Genuity Wealth Group Limited. The Investment Manager is a leading small cap UK fund manager with a team of 18 fund managers and analysts. As at 31 July 2021, the Investment Manager had more than £6.3 billion of funds under management across eight unit trusts/OEICS and the Company, including approximately £4.4 billion invested in small UK companies.
The Investment Manager's VCT fund management team is led by Oliver Bedford with support from Lucy Bloomfield, Anna Salim and Barbara Walshe. The VCT fund management team is expected to further expand with the addition of a second investment analyst, taking the team to five. The VCT fund management team is also supported by the wider Hargreave Hale fund management team, mainly in the delivery of the Non-Qualifying Investment Strategy through the direct investment of the Company's capital into companies listed on the main market of the London Stock Exchange, as permitted by the VCT rules.
A short biography on the members of the VCT management team is set out below.
Lucy Bloomfield
Oliver Bedford graduated from Durham University with a degree in Chemistry. He served in the British Army for 9 years before joining the Investment Manager in 2004. After initially working as an analyst in support of the VCT, Oliver was appointed as co-manager in 2011 and then lead manager in 2019.
Lucy Bloomfield joined the Investment Manager in August 2018. Prior to this she spent eight years as an analyst and UK Small & Mid cap fund manager at BlackRock before her most recent role as a European Small & Mid-cap fund manager with Ennismore Fund Management. Lucy graduated from Durham University in 2007 with a degree in Economics and is a CFA charterholder.
Anna Salim joined the Investment Manager in April 2018. Her prior experience includes European lower mid-market private equity investments at Revolution Capital Group and equity research at Cormark Securities. Anna graduated from the University of Toronto and holds an MBA from University of Western Ontario. She is a CFA charterholder.
Anna Salim
Barbara Walshe joined the Investment Manager as legal counsel in May 2020. She graduated from Oxford University and, following qualification as a solicitor in 2010, worked at Ashurst LLP and Linklaters LLP before her most recent role as chief legal officer at a VCT-backed sustainable recycling company.
Other members of the wider fund management team at Hargreave Hale include David Walton, Siddarth Chand Lall, Richard Hallett, George Finlay, Guy Feld and Eustace Santa Barbara (all pictured from left to right below), supported by a further seven analysts.
CGWL is a subsidiary of Canaccord Genuity Group Inc., a financial services company listed on the Toronto Stock Exchange. CGWL has provided administration and custodian services to the Company since June 2019.
The Administrator also acts as custodian to the Company and, in that capacity, is responsible for ensuring safe custody and dealing with settlement arrangements in respect of the Company's equity and fixed income assets, and certain cash deposits. All other assets, including cash, are held by the Company directly.
The Annual Running Costs of the Company are capped at 3.5 per cent. of the net assets of the Company. The Investment Manager has agreed to indemnify the Company in relation to all costs that exceed this cap (such costs excluding any VAT payable on the Annual Running Costs of the Company). As at the end of the Company's last financial year, being 30 September 2020, the Company's running costs were 2.35 per cent. of the net assets of the Company (including irrecoverable VAT).
Under the Management Agreement, the Investment Manager receives an annual management fee of 1.7 per cent. of the Net Asset Value of the Company. A maximum of 75 per cent. of the annual management charge will be chargeable against capital reserves, with the remainder being chargeable against revenue. The Company does not pay the Investment Manager a performance fee. As the Investment Manager to the Company and investment advisor to the Marlborough Special Situations Fund (in which the Company may invest), the Investment Manager adjusts the fee it receives under the Management Agreement to ensure that the Company is not charged twice for its services.
The Investment Manager carries out due diligence and transactional services on potential investments internally. Upon completion of an investment, the Investment Manager is permitted under the Management Agreement to charge private investee companies a fee equal to 1.5 per cent. of the investment amount. This fee is subject to a cap of £40,000 per investment and is payable directly from the investee company to the Investment Manager. The Investment Manager may recover due diligence and transactional services costs directly from private investee companies.
The Administrator charges the Company an annual aggregate fee of £195,000 (plus VAT) in relation to the provision of administration services. In addition, the Administrator receives a fee of £30,000 per annum in relation to its appointment as the Company's custodian.
Any initial or trail commissions paid to Financial Intermediaries are paid by CGWL.
Description: MaxCyte is a leading provider of cell-engineering platform technologies to advance innovative cell-based research, development and potential commercialization of next-generation cell therapies. FY20 revenue: US\$26m* Market cap: £821m
Description: Polarean Imaging specialises in the use of hyperpolarised Xenon gas as an imaging agent and has developed equipment that enables existing medical imaging systems to achieve improved imaging of pulmonary function. FY20 revenue: US\$1m* Market cap: £180m
Description: Science in Sport is a leading sports nutrition business that develops, manufactures and markets innovative nutrition products for professional athletes, sports and fitness enthusiasts and the active lifestyle community.
FY20 revenue: £50m Market cap: £99m
Surface Transforms
FY21 revenue: £2m
* MaxCyte and Polarean use US\$ as their functional currency.
Description: Surface Transforms develops and produces carbon‐ceramic material automotive brake discs.
The Company has an experienced board consisting of five non-executive directors, four of whom are independent of the Investment Manager. Although the management of the Company's portfolio has been delegated to the Investment Manager, the Directors retain overall responsibility for the Company's affairs. The duties of the Board include:
At the annual general meeting of the Company held on 4 February 2021, Sir Aubrey Brocklebank retired from his role as non-executive director and Chairman of the Audit Committee. Justin Ward was appointed to the Board on 1 November 2020 and assumed the role of Chairman of the Audit Committee on 4 February 2021, following the retirement of Sir Aubrey Brocklebank.
A short biography on each of the Directors is set out below.
An experienced company chairman in both private and public companies and a former main board director of MFI Furniture Group plc, David joined the Board in September 2010. David is chairman of Draper Esprit VCT plc, Episys Group Ltd and Honest Brew Ltd and a non- executive director of Puma VCT 12 plc.
Oliver sits on the Board as Part of his role as lead manager at the Investment
Oliver Bedford
Ashton Bradbury
Manager in relation to the Company.
Ashton Bradbury has previously held roles at Charterhouse Tilney, Hill Samuel Investment Management and HSBC Asset Management Europe and was, until 2014, a fund manager with Old Mutual Global Investors where he established its UK small and mid-cap equities team. Ashton is currently a non-executive director of Standard Life UK Smaller Companies Trust PLC and is nonexecutive chairman of Golf Union of Wales Limited and a director of British Golf Association Limited.
Angela Henderson is a non-executive director at Credit Suisse Asset Management Limited and Macquarie Capital (Europe) Limited following an executive career in financial services. She has invested in and held nonexecutive board seats at small UK companies in the technology and asset management sectors and has previously served on the governing body of a London hospital foundation trust. She currently serves on the board of a healthcare charity and a school.
Justin Ward was appointed in November 2020 and assumed the role of chairman of the Audit Committee at the AGM in February 2021. Justin is a qualified Chartered Accountant and is a non-executive director and chairman of the Audit Committee of The Income and Growth VCT PLC and Roehampton Club Members Limited. He is also a non-executive director of School Explained Limited and has previously served on the board of a number of private companies. Justin formerly led growth equity and private equity buyout transactions at CVC Capital Partners, Hermes Private Equity and Bridgepoint Development Capital.
The Board is accountable to Shareholders for the governance of the Company's affairs and is committed to maintaining the highest standards of corporate governance. Accordingly, the Board has considered the principles and recommendations of the UK Corporate Governance Code published by the Financial Reporting Council in July 2018 (the "UK Code") and the AIC Code of Corporate Governance published in January 2019 (the "AIC Code") and put in place arrangements which it considers appropriate for the Company to ensure proper corporate governance. Considering the principles applicable to the Company, the Board believes that the Company as at the date of this document complies, save as disclosed below, with the provisions of the UK Code and the AIC Code.
The UK Code includes provisions relating to:
For the reasons set out in the AIC Code and as explained in the UK Code, the Board considers these provisions are not relevant to the position of the Company, as all of the Company's day-to-day management and administrative functions are outsourced to external service providers. As a result, the Company has no executive directors, employees or internal operations.
Due to the size of the Board, it has not set up separate nomination and remuneration committees on the grounds that the Board as a whole considers these matters and it has not appointed a senior independent non-executive director.
The annual report and accounts of the Company are made up to 30 September in each year and are normally published in December of each year. The Company also publishes unaudited half yearly financial statements for the period to 31 March in each year.
Although the Company is an 'evergreen' VCT, the Articles provide that at the annual general meeting of the Company to be held in 2027 a vote on the continuation of the Company for a further five years will be put to Shareholders. Under the Articles, if the continuation of the Company is not approved, the Directors must put forward proposals for the liquidation, reorganisation or reconstruction of the Company as soon as possible, but in any event no later than nine months following the date of the annual general meeting at which the continuation vote was proposed and failed.
At the General Meeting, Shareholders will be asked to approve a resolution extending the date of the next continuation vote to the annual general meeting of the Company to be held in 2028 in order to seek to protect the VCT tax relief for investors participating in the Offer.
On 4 February 2021, by ordinary resolution, the Directors were granted authority to allot up to 25 million Ordinary Shares. On the same date, by special resolution, the Directors were empowered to make such allotments without application of pre-emption rights. On the same date, the Company was authorised to make market purchases of up to 33,082,092 Ordinary Shares.
At the General Meeting to be held on 6 October 2021, in order to ensure the Directors have authority to issue the Offer Shares, Shareholders will be asked to approve resolutions increasing the number of Ordinary Shares the Directors may allot on a non pre-emptive basis in connection with the Offer and the DRIS.
The Investment Manager and its officers and employees may be involved in other financial, investment or professional activities that may on occasion give rise to conflicts of interest with the Company. In particular, the Investment Manager may provide investment management, investment advice or other services in relation to a number of funds that may have similar investment policies to that of the Company.
The Investment Manager will have regard to its obligations under the Management Agreement or otherwise to act in the best interests of the Company, so far as is practicable having regard to its obligations to other clients or funds, should potential conflicts of interest arise.
Both the Investment Manager and the Administrator have established internal control frameworks to provide reasonable assurances as to the effectiveness of the internal control systems operated on behalf of their respective clients. The Administrator reports to the Board, on an annual basis, with regard to the compliance oversight reviews that have taken place in the previous year so far as they affect the Company.
The Administrator also reports, on a quarterly basis, any breaches of law and regulation and any operational errors. This enables the Board to address any issues with regard to the management of the Company as and when they arise and to identify any known internal control failures.
Oliver Bedford is an employee of the Investment Manager and therefore has an interest in the arrangements between the Company and the Investment Manager. Oliver Bedford is also a Director of the Company and as such there may be a potential conflict of interest between his duties owed to the Company and to the Investment Manager in relation to these arrangements.
David Brock was appointed as chairman of Honest Brew Ltd, which is an investee company of the Company, on 25 July 2019. David sits on the board of Honest Brew Ltd as the Company's representative. David is also a shareholder in Honest Brew Ltd, however he does not control the entity.
The Company has appointed Philip Hare & Associates LLP to advise on tax matters generally and, in particular, on the maintenance of VCT status. HMRC has confirmed that the Company qualifies as a VCT. Philip Hare & Associates LLP will assist the Investment Manager in establishing the status of investments as Qualifying Investments and monitoring these investments and will report directly to the Board twice a year. In order to continue to comply with VCT requirements, the Company must have 80 per cent. of all net funds raised from the issue of shares invested in Qualifying Investments throughout accounting periods beginning no later than three years after the date on which those shares are issued. The Company must also invest at least 30 per cent. of the gross funds raised in Qualifying Investments by the anniversary of the end of the accounting period in which the funds were raised.
As at 31 July 2021, the Company was 99.61 per cent. invested in Qualifying Investments (as defined in the ITA).
It is proposed that the Company raises up to £20 million by way of an offer for subscription for Offer Shares, with the availability of an Over-allotment Facility allowing the Company to raise up to a further £20 million at the Board's discretion. The Over-allotment Facility may be utilised for the duration of the Offer. The issue of the Offer Shares is subject to Shareholders approving the necessary share issuance authority at a general meeting to be held on 6 October 2021 and on the Offer Agreement becoming unconditional and not being terminated in accordance with its terms.
The Offer will open on 2 September 2021 and will close at 12.00 p.m. on 1 April 2022 in respect of the 2021/22 tax year (unless fully subscribed earlier, in which case the Board may close the Offer earlier than this date). If the Offer is not fully subscribed at that time, the Directors reserve the right to allow the Offer to remain open for at least part of the 2022/23 tax year, but not beyond 12.00 p.m. on 12 August 2022.
The first allotment of Offer Shares under the Offer is expected to be on or around 11 October 2021. Thereafter, the Directors reserve the right to allot Offer Shares at any time whilst the Offer remains open. Following the first allotment of Offer Shares, allotments will take place on a monthly basis or at such other times as the Board, in its sole discretion, may determine. Following each allotment, an announcement will be released through a Regulatory Information Service, including details of the relevant Offer Price and total number of Offer Shares allotted. The Directors reserve the right to accept Applications and to allot and arrange for the listing of Offer Shares in respect of Applications received under the Offer on or prior to the closing date of the Offer as the Directors see fit. An announcement will be released stating that the Offer has closed and with a summary of the results of the Offer.
Under the terms of the Offer, Offer Shares are being offered to the public. Investors are invited to subscribe an amount in Sterling rather than apply for a particular number of Offer Shares. Offer Shares will be issued at a 3.5 per cent. premium to the last published NAV per Share to offset the costs of the Offer. The price of the Offer Shares will be calculated in pence to two decimal places by reference to the Pricing Formula:
Price of Offer Shares = Last Published NAV per Ordinary Share
0.965
The NAV per Share will be the last published by the Company prior to the date of allotment, adjusted as necessary for dividends declared but not yet paid if the allotment occurs whilst the Ordinary Shares are classified as ex-dividend. The relevant Offer Price in respect of each allotment will be announced through a Regulatory Information Service following the relevant allotment of Offer Shares. Dealings in Offer Shares are expected to commence within 5 business days of the relevant allotments.
The number of Offer Shares to be issued under each allotment will be rounded down to the nearest whole number and fractions of Offer Shares will not be allotted. If there is a surplus of funds from an Investor's Subscription, the balance will be returned (without interest) in the form of a cheque, save where the surplus amount under the Offer is less than £3.00, in which case such surplus will be retained by the Company. The Offer is not underwritten.
The Offer Shares will rank pari passu with the existing Ordinary Shares (save for any dividends or other distributions declared, made or paid on the existing Ordinary Shares by reference to a record date prior to the issue of the relevant Offer Shares).
The net proceeds of the Offer will be pooled with the existing cash resources of the Company and utilised (i) to make new and follow-on investments in accordance with its investment policy and (ii) to help meet annual outgoings (including running costs, directors' fees and market purchases of Shares).
Application Forms and cleared funds must be received by the Receiving Agent by 12.00 p.m. on 1 April 2022 to be included in the final allotment of the 2021/2022 tax year (unless fully subscribed earlier), and not later than 12.00 p.m. on 12 August 2022 to be included in the final allotment of the 2022/2023 tax year (unless fully subscribed earlier). The Offer will close at 12.00 p.m. on 12 August 2022, unless the Offer is fully subscribed before this time and/or the Board decides, in its sole discretion, to close the Offer earlier.
Applications under the Offer will normally be accepted on a first-come-first-served basis (provided cheques are not post-dated and with priority being given to Applications with cleared funds), subject always to the discretion of the Board. The Board cannot guarantee a specific allotment date during the relevant tax year and applications which cannot be satisfied at one allotment date will be held for processing until a later allotment date in the relevant tax year.
The minimum subscription per Investor under the Offer is £5,000. Applications in respect of less than £5,000 will not be accepted. Multiple applications under the Offer from the same Investor in the same tax year will not be accepted as a means to achieving the minimum subscription. Investors should note that the maximum aggregate subscription by an individual in VCTs in any tax year which will be eligible for the full tax relief is £200,000 (which includes shares in VCTs subscribed for under dividend reinvestment schemes). Each person in a marriage or civil partnership may be eligible to obtain individual tax relief in respect of £200,000 in each tax year under the Offer.
Persons wishing to participate in the Offer should complete the Application Form that accompanies this document in accordance with the instructions printed thereon. The completed Application Form together with your cheque or banker's draft should be sent by post, or delivered by hand (during normal business hours only), to Canaccord Genuity Wealth Limited, c/o Talisman House, Boardmans Way, Blackpool FY4 5FY so as to be received no later than 12.00 p.m. on 1 April 2022 for investment in the 2021/22 tax year and no later than 12.00 p.m. on 12 August 2022 for investment in the 2022/23 tax year (unless the Offer is closed prior to those dates). If you post your Application Form you are recommended to use first class post and to allow at least two Business Days for delivery. All payments are subject to the anti-money laundering and identity verification requirements of the Receiving Agent.
The full terms and conditions of subscription are set out in Part 7 of this document.
In the event that the Offer is fully subscribed (but assuming that the Over-allotment Facility is not used) and assuming an Offer Price of 103.35p per Offer Share (based on the NAV per Share as at 31 July 2021), the percentage of the Company owned by Existing Shareholders (assuming they do not subscribe for additional Ordinary Shares under the Offer or otherwise acquire further Ordinary Shares) will decrease to 92 per cent. through the issue of the Offer Shares. In the event the Maximum Subscription is achieved (i.e. including the Overallotment Facility) and assuming an Offer Price of 103.35p per Offer Share (based on the NAV per Share as at 31 July 2021, the percentage of the Company owned by Existing Shareholders (assuming they do not subscribe for additional Ordinary Shares under the Offer or otherwise acquire further Ordinary Shares) will decrease to 85 per cent. through the issue of the Offer Shares.
Investors under the Offer will indirectly bear the costs of the Offer through the application of the Pricing Formula which determines the offer price to be paid for the Offer Shares and includes an allowance for issue costs of 3.5 per cent. The costs of the Offer will be paid by the Administrator out of its fee of 3.5 per cent. of the gross proceeds of the Offer. To the extent that the expenses of the Offer exceed 3.5 per cent. of the gross proceeds of the Offer, the Administrator will bear the excess.
The maximum gross proceeds of the Offer (assuming the Offer is fully subscribed and the Over-allotment Facility is not used) will be £20 million. The total expenses payable by the Company in connection with the Offer (assuming the Offer is fully subscribed and no Offer Shares are issued under the Over-allotment Facility) are expected to be around £0.7 million (including amounts paid by way of fees and irrecoverable VAT where applicable) and the net proceeds of the Offer will amount to £19.3 million. If the Maximum Subscription is achieved, the total expenses payable by the Company in connection with the Offer are expected to be around £1.3 million (including amounts paid by way of fees and irrecoverable VAT where applicable) and the net proceeds of the Offer will amount to £38.7 million.
Commission is available to Financial Intermediaries: (i) acting on behalf of 'execution only', non-advised UK retail clients; and (ii) following the provision of restricted advice to an Investor that is a Professional Client (as defined in COBS 3.5) of the Financial Intermediary, on the following basis:
All commissions to be paid to Financial Intermediaries will be paid by Canaccord Genuity Wealth Limited.
The introductory commission may be rebated by Financial Intermediaries and reinvested by them on behalf of their clients through additional Offer Shares (the rebate in each case may be in Part or in whole in 25 per cent. increments).
Commissions will only be paid if, and to the extent, they are permitted under legislation and regulations. Annual trail commission will be paid on or around the annual anniversary date of allotment.
Should an 'execution-only' Investor subsequently decide to seek financial advice from their execution-only Financial Intermediary in respect of their holding in the Company, any annual trail commission in respect of an investment under the Offer must cease and either the Company or CGWL must be notified accordingly.
The Company is not permitted to pay commission to Financial Advisers where advice has been given to UK retail investors in relation to their Applications under the Offer. Investors will be separately liable for any Adviser Charges that they have agreed with their Financial Intermediary and the Company shall have no responsibility to any Investor or Financial Intermediary in respect of any such Adviser Charges. However, the Company can facilitate the payment of Adviser Charges on behalf of an Investor in relation to their subscription under the Offer. Any facilitation of the payment of such Adviser Charges by the Company shall be subject to the Terms and Conditions of the Adviser Charges Agreement set out on pages 100 to 101 of this document. To the extent that an Investor wishes the Company to facilitate the payment of any Adviser Charges, such Investor should complete the relevant sections of the Application Form. Any applicable tax relief for Investors will only be available on the actual subscription amount which is applied to subscribe for Offer Shares on behalf of such Investor and will not be available in respect of any Adviser Charges that are paid by or on behalf of an Investor.
It should be noted that any amount of Adviser Charges which may be facilitated as outlined above should not be considered as implying an appropriate level of Adviser Charges. Adviser Charges are for the Investor and the Financial Intermediary to agree, depending on the level of advice and service being provided.
The Offer Shares will be available to be issued in either registered form (i.e. certificated) or electronic form (i.e. via CREST). Offer Shares issued close to the end of the tax year may need to be issued in certificated form to allow the investment to be made within the required tax year. Definitive share certificates and income tax certificates are expected to be despatched by post within 15 Business Days of each allotment of Offer Shares. Temporary documents of title will not be issued in connection with the Offer.
Offer Shares will be capable of being transferred by means of the CREST system. Those successful Investors who wish to take advantage of the ability to trade in Ordinary Shares in uncertificated form, and who have access to a CREST account, may arrange with their CREST operator to convert their holdings into dematerialised form. Shareholders should be aware that Offer Shares delivered in certificated form are likely to incur higher dealing costs than those in respect of Offer Shares held in CREST.
Application has been made to the FCA and the London Stock Exchange for the Offer Shares to be admitted to the premium segment of the Official List and to trading on the London Stock Exchange's main market for listed securities. The Offer Shares will be in registered form and will be transferable. The ISIN code of the Ordinary Shares is GB00B02WHS05, the SEDOL number is B02WHS0 and the LEI code for the Company is 213800LRYA19A69SIT31.
A typical investor for whom the Offer is designed is an individual who is a UK income tax payer over 18 years of age with an investment range of between £5,000 and £200,000 per tax year who considers the investment policy as detailed in paragraph 2.1 of Part 2 of this document to be attractive and can accept the high level of risk associated with an investment into a VCT. Investment in a VCT will not be suitable for every type of investor and should be considered as a medium to long term investment with a minimum holding period of five years.
Before deciding whether to subscribe for Offer Shares, Investors are strongly encouraged to consult an independent adviser authorised under FSMA and to carefully consider the suitability of an investment in the Company in the light of their personal circumstances.
Investors should be aware of the tax implications of investing under the Offer and holding the Ordinary Shares. Further information in relation to taxation is set out in Part 5 of this document.
Description: ZOO Digital provides dubbing, subtitling and media services for the global entertainment industry. FY21 revenue: US\$30m(*) Market cap: £113m
Description: Gousto is a data-driven recipe box company, offering the most meal choice in the market and delivering precise ingredients and easy-to-follow recipe cards direct to doorsteps across the UK.
FY20 revenue: £189m
Description: KIDLY is an online retailer of design-led, parent-approved products for children aged 0-5 years. FY21 revenue: £11m
Description: Mexican Grill operates Tortilla, a national Mexican restaurant chain. FY20 revenue: £27m
As at 31 July 2021, the unaudited NAV per Share was 99.73 pence.
Set out below are those investments of the Company as at the date of this document (the values being at 31 July 2021) which have an aggregate value of at least 50 per cent. of the Company's net assets (all of which information is unaudited). There has been no material change to the aggregate value of the Company's investment portfolio since 31 July 2021. All of the Qualifying Investments are UK based or have a UK presence.
| Qualifying Investments | Sector | Cost £000 |
Valuation £000 |
% of NAV |
|---|---|---|---|---|
| SCA Investments Ltd (Gousto)(1) | Consumer Discretionary | 2,484 | 12,715 | 5.56% |
| Learning Technologies Group plc | Information Technology | 2,238 | 9,657 | 4.22% |
| Maxcyte Inc | Health Care | 1,270 | 8,100 | 3.54% |
| Ideagen plc | Information Technology | 1,992 | 7,616 | 3.33% |
| Zoo Digital Group plc | Information Technology | 2,266 | 6,236 | 2.73% |
| Polarean Imaging plc | Health Care | 2,081 | 5,903 | 2.58% |
| PCI-PAL plc | Information Technology | 2,280 | 5,883 | 2.57% |
| Surface Transforms plc | Industrials | 1,745 | 5,842 | 2.56% |
| Ilika plc | Industrials | 1,636 | 5,363 | 2.34% |
| Kidly Ltd(1) | Consumer Discretionary | 2,500 | 5,059 | 2.21% |
| Creo Medical Group plc | Health Care | 2,329 | 4,600 | 2.01% |
| Eagle Eye Solutions Group plc | Information Technology | 1,642 | 4,415 | 1.93% |
| Blackbird plc | Information Technology | 615 | 4,305 | 1.88% |
| Infinity Reliance Ltd (My 1st Years) (1) | Consumer Discretionary | 2,500 | 3,894 | 1.70% |
| Aquis Exchange plc | Financials | 765 | 3,081 | 1.35% |
| Mexican Grill Ltd (1) | Consumer Discretionary | 1,125 | 3,015 | 1.32% |
| Zappar Ltd (1) | Information Technology | 1,600 | 2,781 | 1.22% |
| Cohort plc | Industrials | 619 | 2,708 | 1.18% |
| Verici DX plc | Health Care | 700 | 2,520 | 1.10% |
| Angle plc | Health Care | 1,158 | 2,478 | 1.08% |
| C4X Discovery Holdings plc | Health Care | 1,550 | 2,401 | 1.05% |
| Abcam plc | Health Care | 55 | 2,239 | 0.98% |
| Diaceutics plc | Health Care | 1,550 | 2,202 | 0.96% |
| EKF Diagnostics Holdings plc | Health Care | 565 | 2,160 | 0.94% |
| Eden Research plc | Materials | 1,355 | 2,146 | 0.94% |
| 38,620 | 117,319 | 51.28% | ||
| Other Qualifying Investments | 53,206 | 53,864 | 23.55% | |
| Non Qualifying Investments (direct) | 22,618 | 31,852 | 13.92% | |
| Marlborough Special Situations Fund | 2,862 | 3,624 | 1.59% | |
| Cash at bank | 22,278 | 22,278 | 9.74% | |
| Prepayments / Accruals | (175) | -0.08% | ||
| Net Assets | 139,584 | 228,762 | 100.00% |
(1) Private Companies
Investments in shares quoted on AIM, the AQSE Growth Market and the main market of the London Stock Exchange (including ETFs) will be valued at the prevailing bid price. All unquoted investments will be valued in accordance with IPEV Guidelines.
Fixed income securities are valued at the closing bid on the valuation date with income accrued according to the convention specified in the loan instrument. In order of preference, the price should be set according to the following:
In the absence of any third-party pricing information, the Investment Manager will use a valuation model that includes as input variables the time to maturity, the coupon and accrual convention and the required rate of return within the market. The valuation of fixed income securities that are valued in this way will be reviewed by the Board at least quarterly.
If no clear market data on the required rate of return for fixed income securities is available, the Investment Manager will assume the required rate of return is the highest permissible under the VCT Rules or use best practice if otherwise advised by a suitably knowledgeable person.
Where the fixed income security has an option to convert into an equity, the Investment Manager will separately value the option to convert by applying the Black Scholes option pricing model to each of the different conversion scenarios with the option then priced using a probability based weighted average.
The Company's auditors are BDO LLP, 55 Baker Street, London W1U 7EU. BDO LLP is regulated by the Institute of Chartered Accountants in England and Wales.
The financial information contained in the sections titled "Historical Financial Information", "Operating and Financial Review" and "Selected Financial Information" of this Part 4 has been extracted without material adjustment from (i) the audited statutory accounts of the Company for the financial year ended 30 September 2020, in respect of which the Company's auditors made an unqualified report under sections 495 to 497 of the 2006 Act, and which have been delivered to the Registrar of Companies and (ii) the unaudited interim reports of the Company for the periods ended 31 March 2021 and 31 March 2020. The annual report for the year ended 30 September 2020 did not contain any statements under section 498(2 or (3) of the 2006 Act and was prepared in accordance with UK Generally Accepted Accounting Practice ("UK GAAP"), including Financial Reporting Standard 102 ("FRS 102") and the Statement of Recommended Practice for "Financial Statements of Investment Trust Companies and Venture Capital Trusts" October 2019 ("SORP").
Full audited financial information on the Company for the financial year ended 30 September 2020 and unaudited information for the six month periods ended 31 March 2021 and 31 March 2020 are available free of charge at the Company's registered office or can be downloaded at www.hargreaveaimvcts.co.uk.
Historical financial information relating to the Company on the matters referred to below is included in the published audited annual report and accounts of the Company for the financial year ended 30 September 2020 and the interim reports of the Company for the six month periods ended 31 March 2021 and 31 March 2020 and is expressly incorporated by reference into this document. The non-incorporated parts of these reports of the Company are either not relevant to investors or covered elsewhere in this document.
| Annual report for the year ended 30 September 2020 |
Interim Report to 31 March 2021 |
Interim Report to 31 March 2020 |
|
|---|---|---|---|
| Nature of information | Page numbers | Page numbers | Page numbers |
| Financial highlights | 3 | 5 | 4 |
| Independent auditor's report | 52 | - | - |
| Income statement | 58 | 33 | 26 |
| Balance sheet | 59 | 35 | 28 |
| Statement of changes in equity | 60 | 36 | 29 |
| Statement of cash flows | 62 | 39 | 32 |
| Notes to the financial statements | 63 | 40 | 33 |
The Strategic Report (including the Chairman's Statement and the Investment Manager's Review) and the Directors' Report in respect of the Company for the financial year ended 30 September 2020 and the six month periods ended 31 March 2021 and 31 March 2020 are set out on those pages (specified in the table below) of the historical financial information referred to in the section titled "Introduction" on page 53 of this Part 4, such reports being expressly incorporated into this document by reference:
| Annual report for the year ended 30 September 2020 |
Interim Report to 31 March 2021 |
Interim Report to 31 March 2020 |
|
|---|---|---|---|
| Nature of information | Page numbers | Page numbers | Page numbers |
| Chairman's statement | 4 | 6 | 5 |
| Investment manager's report | 23 | 12 | 9 |
The information in this paragraph titled "Selected financial information"has been extracted directly from the financial information referred to in the section titled "Introduction" of this Part 4. Selected historical financial information relating to the Company which summarises the financial condition of the Company for the financial year ended 30 September 2020 and the six month periods ended 31 March 2021 and 31 March 2020 is set out in the following table and is expressly incorporated into this document by reference :
| Year ended 30 September 2020 (audited) |
6 months ended 31 March 2021 (unaudited) |
6 months ended 31 March 2020 (unaudited) |
|||||||
|---|---|---|---|---|---|---|---|---|---|
| Revenue (£'000) |
Capital (£'000) |
Total (£'000) |
Revenue (£'000) |
Capital (£'000) |
Total (£'000 |
Revenue (£'000) |
Capital (£'000) |
Total (£'000) |
|
| Net gain/(loss) on investments held at fair value through profit or loss |
– | 18,308 | 18,308 | – | 54,987 | 54,987 | – | (18,938) | (18,938) |
| Total income before operating expenses |
731 | 70 | 801 | 391 | – | 391 | 418 | 65 | 483 |
| Investment management fee (accrued/ paid) |
(573) | (1,721) | (2,294) | (417) | (1,252) | (1,669) | (275) | (824) | (1,099) |
| Other fees (accrued/paid) to service providers |
(698) | (184) | (882) | (498) | (12) | (510) | (355) | (117) | (472) |
| Profit/(loss) on ordinary activities before taxation |
(540) | 16,473 | 15,933 | (524) | 53,723 | 53,199 | (212) | (19,814) | (20,026) |
| Basic and diluted (loss)/earnings per Share (p) |
(0.26) | 8.07 | 7.81 | (0.25) | 25.86 | 25.61 | (0.10) | (9.73) | (9.83) |
| Year ended 30 September 2020 (audited) |
6 months ended 31 March 2021 (unaudited) |
6 months ended 31 March 2020 (unaudited) |
|
|---|---|---|---|
| Total net assets (£'000) | 146,957 | 220,640 | 114,552 |
| NAV per Share (p) | 73.66 | 95.71 | 56.70 |
There is no pro forma financial information contained in this Prospectus.
The Board has set a policy in relation to the treasury activities of the Company which is implemented by the Investment Manager, subject always to the direction and supervision of the Board. Cash and cash equivalents are held only in Sterling and no other currencies. The Company does not have any borrowing and does not use any financial instruments for hedging purposes. The Company requires liquidity in order to meet its operating costs of which the most significant is the investment management fee. The Company maintains cash reserves suitable to meet its operating commitments.
As at the date of this document, there has been no significant change in the financial position of the Company since 31 March 2021 (being the date on which unaudited financial information was last published).
The Company is of the opinion that it has sufficient working capital for its present requirements, that is for at least 12 months from the date of this document.
The unaudited NAV per Share as at 27 August 2021 (being the latest date in respect of which the Company has published its NAV per Share) was 101.27 pence.
The following material investments have been made by the Company since 31 March 2021 (being the date on which unaudited financial information was last published).
● £1.8m invested in Seraphine Group plc.
Save as set out above, there have been no material investments made by the Company since 31 March 2021. In the ordinary course, there are a number of potential investments which are in progress, but no firm commitments have been made in respect of these.
The following table sets out the capitalisation of the Company (distinguishing between guaranteed and unguaranteed, and secured and unsecured indebtedness) as at 31 July 2021.
| 31 July 2021 (£'000) |
|
|---|---|
| Total current debt | |
| – Guaranteed |
– |
| – Secured |
– |
| – Unguaranteed/unsecured |
– |
| Total non-current debt | |
| – Guaranteed |
– |
| – Secured |
– |
| – Unguaranteed/unsecured |
– |
| Shareholders' equity | |
| – Share capital |
2,294 |
| – Share premium account |
53,802 |
| – Special reserve |
85,261 |
| – Other reserves |
87,405 |
| Total | 228,762 |
The information in the table above is unaudited financial information extracted from internal management accounting records as at 31 July 2021.
The following table shows the Company's net indebtedness as at 31 July 2021. The information in the following table is unaudited financial information extracted from internal management accounting records as at 31 July 2021.
| £ | ||
|---|---|---|
| A. | Cash | 22,278 |
| B. | Cash equivalent | – |
| C. | Trading securities | – |
| D. | Liquidity (A+B+C) | 22,278 |
| E. | Current financial receivable | 294 |
| F. | Current bank debt | – |
| G. | Current portion of non-current debt | – |
| H. | Other current financial debt | 469 |
| I. | Current financial debt (F+G+H) | 469 |
| J. | Net current financial indebtedness (I-E-D) | (22,103) |
| K. | Non-current bank loans | – |
| L. | Bonds issued | – |
| M. | Other non-current loans | – |
| N. | Non-current financial indebtedness (K+L+M) | – |
| O. | Net financial indebtedness (J+N) | (22,103) |
A Venture Capital Trust is a company, broadly similar to an investment trust, which has been approved by HMRC and which subscribes for shares in (or lends money to) small unquoted companies, including those traded on AIM. VCTs and their investors enjoy certain tax reliefs. In return for these tax reliefs, HMRC requires each VCT to comply with complex legislation that restricts the Company's investment activity to a tightly defined group of small UK companies.
The following paragraphs, which are intended as a general guide only and are based on current legislation and HMRC practice, summarise advice received by the Directors as to the position of the Shareholders who hold Ordinary Shares other than for trading purposes. Investors should note that the tax legislation of an investor's country of residence for tax purposes (if not the UK, being the Company's country of incorporation) may have an impact on the income received from the securities.
The tax position of individual investors, resident in the UK, in VCTs is summarised below. Investors should take their own tax advice from a professional adviser ahead of making an investment in the Company. The tax reliefs are restricted to a maximum investment of £200,000 in any single tax year.
Investors who subscribe for new shares can claim income tax relief at the rate of 30 per cent. of their investment, subject to the £200,000 maximum or that amount that reduces their income tax liability to nil.
Income tax relief is restricted if, within 6 months of the subscription for shares in a VCT (before or after), the investor has disposed of shares in that VCT or in a VCT that merges with the VCT, if the merger was known about at the time the shares were issued. Investors who hold their VCT shares for less than 5 years may have to repay some or all of their 30 per cent. income tax relief.
Investors will not be liable for income tax on dividends paid by the VCT. Dividend tax relief can be claimed on VCT shares purchased through the secondary market as well as through a new share issue.
Relief from income tax on a subscription for VCT shares will be withdrawn if the VCT shares are disposed of (other than between spouses or in the event of death) within five years of issue or if the VCT loses its approval within this period.
A disposal by an Investor of Offer Shares will give rise to neither a chargeable gain nor an allowable loss for the purposes of UK capital gains tax.
Capital gains tax relief can be claimed on VCT shares purchased through the secondary market.
Notwithstanding a clear intention that VCTs are intended to be a tax free investment, Investors can be subject to income tax when their shares are purchased by the Company. Where an Investor sells shares back directly to the Company any gain made on those shares could be treated as a taxable distribution, and become subject to income tax. However, the Directors have been advised that this does not apply in respect of shares sold to a third party, such as a market maker, through the market, having been held for the requisite holding period. Whilst it is hoped that this anomaly will at some point be ironed out in the legislation, Investors who consider selling shares directly to the Company for a higher price than they paid originally, should seek advice in this regard. The Company will also seek to inform Investors of any developments on this point.
The Company will issue tax relief certificates to Investors. These can be used to claim income tax relief through an immediate adjustment to an Investor's tax coding from HMRC or through the end of year tax return.
VCTs are not suitable for every category of investor. The Offer is designed for individuals over 18 years of age who:
Before deciding whether to subscribe for Offer Shares, Investors are strongly encouraged to consult an independent adviser authorised under FSMA and to carefully consider the suitability of an investment into the Company in light of their personal circumstances.
A Qualifying Investment consists of new shares or securities issued directly to the VCT by a Qualifying Company that at the point of investment:
will deploy the money raised for the purposes of a Qualifying Trade within 2 years;
has less than 250 employees (or less than 500 employees in the case of certain Knowledge Intensive Companies); and
The Finance Act 2018 introduced a principles based approach known as the risk to capital condition to establish whether the activities or investments of an investee company can qualify for VCT tax reliefs. This condition has two parts:
A VCT must be approved at all times by HMRC.
A VCT cannot be approved unless the tests detailed above are met throughout the most recent complete accounting period of the VCT and HMRC is satisfied that they will be met in relation to the accounting period of the VCT which is current when the application is made.
The Directors intend to conduct the affairs of the Company so that it satisfies the conditions for approval as a VCT and that such approval will be maintained. HMRC has granted the Company approval under section 274 ITA as a VCT. The Company intends to comply with section 274 ITA and has retained Philip Hare & Associates LLP to advise it on VCT taxation matters.
Approval of a VCT may be withdrawn by HMRC if the various tests set out above are not satisfied.
Withdrawal of approval generally has effect from the time when notice is given to the VCT but, in relation to capital gains of the VCT only, can be backdated to not earlier than the first day of the accounting period commencing immediately after the last accounting period of the VCT in which all of the tests were satisfied.
The above is only a summary of the conditions to be satisfied for a company to be treated as a VCT.
CGWL acts as custodian to the Company. CGWL is a company incorporated with limited liability in England and Wales under the Act with registered number 03739694 having its registered office at 41 Lothbury, London, EC2R 7AE and telephone number 0207 523 4500. CGWL is authorised and regulated by the FCA.
4.1 As at 31 August 2021 (being the latest practical date prior to the publication of this document) the issued fully paid share capital of the Company is as follows:
| Issued (fully paid) | |||
|---|---|---|---|
| Class of shares | Nominal value per Share |
Aggregate nominal value |
No. of Ordinary Shares |
| Ordinary | £0.01 | £2,287,595 | 228,759,504 |
4.2 If the Offer Shares had been issued at an Offer Price of 103.35 pence per Offer Share (being the Offer Price calculated based on the NAV per share as at 31 July 2021), the issued fully paid share capital of the Company immediately after the Offer has closed (assuming the Offer is fully subscribed and the Over-Allotment Facility is utilised in full) will be as follows:
| Issued (fully paid) | |||
|---|---|---|---|
| Class of shares | Nominal value per Share |
Aggregate nominal value |
No. of Ordinary Shares |
| Ordinary | £0.01 | £2,674,629 | 267,462,938 |
As at 1 October 2019, the Company had 204,014,367 Ordinary Shares in issue and, as at 31 March 2021, the Company had 230,520,864 Ordinary Shares in issue. Since 1 April 2021, the Company has issued 951,474 Ordinary Shares for an aggregate consideration of £928,316 and has bought back 2,911,741 Ordinary Shares for an aggregate consideration of £2,781,754. Since 1 April 2021, the Company has also issued 203,313 shares under the DRIS scheme.
4.7.3 in addition to all existing authorities and subject to the passing of the resolution set out in 4.7.1 above, the Directors be generally empowered, pursuant to sections 570 and 573 of the Act to allot equity securities (within the meaning of section 560 of the Act) for cash pursuant to the authority to allot Ordinary Shares as set out in paragraph 4.7.1 above, and to sell shares held by the Company in treasury, wholly for cash, as if section 561(1) of the Act did not apply to any such allotment or sale, provided that this power:
(a) shall be limited to the allotment of equity securities and the sale of treasury shares for cash, up to an aggregate nominal amount of £514,668 (representing approximately 22.5 per cent. of the issued share capital of the Company, as at 31 August 2021); and
The memorandum of association of the Company, which by virtue of Section 28 of the Act is now treated as being part of the Articles of Association of the Company, provides that the Company's principal object is to carry on the business of a VCT.
The Articles, contain, inter alia, provisions to the following effect:
Subject to any special terms as to voting on which any Shares may be issued, on a show of hands every member present in person (or being a corporation, present by authorised representative) shall have one vote and, on a poll, every member who is present in person or by proxy shall have one vote for every Share of which he is the holder. The Shares shall rank pari passu as to rights to attend and vote at any general meeting of the Company.
The Shares are in registered form and will be freely transferable. All transfers of Shares must be effected by a transfer in any usual form or any other form approved by the Directors. The instrument of transfer of a Share shall be executed by or on behalf of the transferor and, in the case of a partly paid share by or on behalf of the transferee. The Directors may refuse to register any instrument of transfer unless: it is in respect of a fully paid share; it is in respect of shares on which the Company does not have a lien; it is in respect of only one class of share; and the transferees do not exceed four in number.
The Company may in general meeting declare dividends in accordance with the respective rights of the members, provided that no dividend shall be payable in excess of the amount recommended by the Directors. The Directors may pay such interim dividends as appear to them to be justified. No dividend or other monies payable in respect of a Share shall bear interest as against the Company. There are no fixed dates on which entitlement to a dividend arises.
All dividends unclaimed for a period of twelve years after being declared or becoming due for payment shall be forfeited and shall revert to the Company.
If any member or other person appearing to be interested in Shares of the Company is in default in supplying within 42 days (or 28 days where the Shares represent at least 0.25 per cent. of the Company's share capital) after the date of service of a notice requiring such member or other person to supply to the Company in writing all or any such information as is referred to in section 793 of the Act, the Directors may, for such period as the default shall continue, impose restrictions upon the relevant shares.
The restrictions available are the suspension of voting or other rights conferred by membership in relation to meetings of the Company in respect of the relevant shares and additionally in the case of a shareholder representing at least 0.25 per cent. by nominal value of any class of shares of the Company then in issue, the withholding of payment of any dividends on, and the restriction of transfer of, the relevant shares.
On a winding-up, any surplus assets of the Company will be divided amongst the holders of its Shares according to the respective numbers of Shares held by them in the Company and in accordance with the provisions of the Act, subject to the rights of any shares which may be issued with special rights or privileges. The Articles of Association provide that the liquidator may, with the sanction of a resolution and any other sanction required by the Act, divide amongst the members in specie the whole or any part of the assets of the Company in such manner as he may determine.
5.6.1 Without prejudice to any rights attaching to any existing shares, any share may be issued with such rights or restrictions as the Company may by ordinary resolution determine or, in the absence of such determination, as the Directors may determine. Subject to the Act, the Company may issue shares which are, or at the option of the Company or the holder are, liable to be redeemed.
Whenever the capital of the Company is divided into different classes of shares, the rights attached to any class may (unless otherwise provided by the terms of issue of that class) be varied or abrogated either with the consent in writing of the holders of not less than 75 per cent. of the nominal amount of the issued shares of the class or with the sanction of a special resolution passed at a separate meeting of such holders.
Unless and until otherwise determined by the Company in general meeting, the number of Directors shall not be less than two. The continuing Directors may act notwithstanding any vacancy in their body, provided that if the number of the Directors be less than the prescribed minimum the remaining Director or Directors shall forthwith appoint an additional Director or additional Directors to make up such minimum or shall convene a general meeting of the Company for the purpose of making such appointment.
Any Director may in writing under their hand appoint (a) any other Director, or (b) any other person who is approved by the Board of Directors as hereinafter provided to be their alternate. A Director may at any time revoke the appointment of an alternate appointed by them. Every person acting as an alternate Director shall be an officer of the Company, and shall alone be responsible to the Company for their own acts and defaults, and they shall not be deemed to be the agent of or for the Director appointing them.
Subject to the provisions of the Act, the Directors may from time to time appoint one or more of their body to be Managing Director or Joint Managing Directors of the Company or to hold such other executive office in relation to the management of the business of the Company as they may decide.
A Director of the Company may continue or become a Director or other officer, servant or member or any company promoted by the Company or in which it may be interested as a vendor, shareholder, or otherwise, and no such Director shall be accountable for any remuneration or other benefits derived as director or other officer, servant or member of such company.
The Directors may from time to time appoint a President of the Company (who need not be a Director of the Company) and may determine their duties and remuneration and the period for which he is to hold office.
The Directors may from time to time provide for the management and transaction of the affairs of the Company in any specified locality, whether at home or abroad, in such manner as they think fit.
5.9.2 Provided the Director has declared their interest, a Director may be a party to or otherwise interested in any transaction or arrangement with the Company or in which the Company is otherwise interested. No Director so interested shall be accountable to the Company, by reason of being a Director, for any benefit that they derive from such office or interest or any such transaction or arrangement.
5.9.3 A Director shall not vote nor be counted in the quorum at a meeting of the Directors in respect of a matter in which they have any material interest otherwise than by virtue of their interest in shares, debentures or other securities of, or otherwise in or through the Company, unless their interest arises only because the case falls within one or more of the following paragraphs:
When proposals are under consideration concerning the appointment of two or more Directors to offices or employment with the Company or any company in which the Company is interested the proposals may be divided and considered in relation to each Director separately and (if not otherwise precluded from voting) each of the Directors concerned shall be entitled to vote and be counted in the quorum in respect of each resolution except that concerning their own appointment.
A Director shall retire from office at or before the third annual general meeting following the annual general meeting at which he last retired and was re-elected. A retiring Director shall be eligible for re-election. A Director shall be capable of being appointed or re-appointed as a Director despite having attained any particular age.
Subject to the restrictions set out in this paragraph, the Directors may exercise all the powers of the Company to borrow money and to mortgage or charge its undertaking, property and uncalled capital. The Directors shall restrict the borrowings of the Company and exercise all voting and other rights or powers of control over its subsidiary undertakings (if any) so as to secure that the aggregate amount at any time outstanding in respect of money borrowed by the group, being the Company and its subsidiary undertakings for the time being (excluding intra-group borrowings), shall not without the previous sanction of an ordinary resolution of the Company exceed a sum equal to 15 per cent. of the Adjusted Capital and Reserves, as defined in the Articles.
At any time when the Company has given notice in the prescribed form (which has not been revoked) to the Registrar of Companies of its intention to carry on business as an investment company ("a Relevant Period") the distribution of the Company's capital profits (within the meaning of section 833 of the Act) shall be prohibited. The Board shall establish a reserve to be called the capital reserve. During a Relevant Period, all surpluses arising from the realisation or revaluation of investments and all other monies realised on or derived from the realisation, payment or other dealing with any capital asset in excess of the book value thereof and all other monies which are considered by the Board to be in the nature of accretion to capital shall be credited to the capital reserve. Subject to the Act, the Board may determine whether any amount received by the Company is to be dealt with as income or capital or partly one way and partly the other. During a Relevant Period, any loss realised on the realisation or payment or other dealing with investments, or other capital losses, and, subject to the Act, any expenses, loss or liability (or provision therefore) which the Board considers to relate to a capital item or which the Board otherwise considers appropriate to be debited to the capital reserve shall be carried to the debit of the capital reserve. During a Relevant Period, all sums carried and standing to the credit of the capital reserve may be applied for any of the purposes for which sums standing to any revenue reserve are applicable except and provided that during a Relevant Period no part of the capital reserve or any other money in the nature of accretion to capital shall be transferred to the revenue reserves of the Company or be regarded or treated as profits of the Company available for distribution (as defined in section 829 of the Act) or be applied in paying dividends on any shares in the Company. In periods other than a Relevant Period, any amount standing to the credit of the capital reserve may be transferred to the revenue reserves of the Company or be regarded or treated as profits of the Company available for distribution (as defined by section 829 of the Act) or applied in paying dividends on any shares in the Company.
Annual general meetings shall be held at such time and place as may be determined by the Directors and within a period of six months beginning on the day following the Company's accounting reference date. The Directors may, whenever they think fit, convene a general meeting of the Company, and general meetings shall also be convened on such requisition or in default may be convened by such requisitionists as are provided by the Act. Any meeting convened under this paragraph by requisitionists shall be convened in the same manner as near to as possible as that in which meetings are to be convened by the Directors.
An annual general meeting shall be called by not less than twenty-one days' notice in writing, and all other general meetings of the Company shall be called by not less than fourteen days' notice in writing unless it is proposed to pass a resolution of which special notice is required by the Act, in which case 28 days notice is required. The notice shall be exclusive of the day on which it is given and of the day of the meeting and shall specify the place, the day and hour of meeting, and in case of special business the general nature of such business. The notice shall be given to the members, other than those who, under the provisions of the Articles or the terms of issue of the shares they hold, are not entitled to receive notice from the Company, to the Directors and to the Auditors. A notice calling an annual general meeting shall specify the meeting as such and the notice convening a meeting to pass a special resolution or an ordinary resolution as the case may be shall specify the intention to propose the resolution as such.
In every notice calling a meeting of the Company or any class of the members of the Company there shall appear with reasonable prominence a statement that a member entitled to attend and vote is entitled to appoint one or more proxies to attend and vote instead of them, and that a proxy need not also be a member.
If within half an hour from the time appointed for the meeting a quorum is not present, the meeting, if convened by or upon the requisition of members, shall be dissolved. In any other case it shall stand adjourned to such time and at such place as the Chairman shall appoint. At any such adjourned meeting the member or members present in person or by proxy and entitled to vote shall have power to decide upon all matters which could properly have been disposed of at the meeting from which the adjournment took place. The Company shall give not less than seven clear days' notice of any meeting adjourned for the want of a quorum and the notice shall state that the member or members present as aforesaid shall form a quorum.
The Chairman may, with the consent of the meeting (and shall, if so directed by the meeting) adjourn any meeting from time to time and from place to place. No business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.
The Directors shall put an ordinary resolution to the annual general meeting of the Company in 2027 and, if passed, to every fifth subsequent annual general meeting, proposing that the Company should continue as a Venture Capital Trust for a further five year period. If any such resolution is not passed, the Directors shall draw up proposals for the reorganisation, reconstruction or voluntary winding-up of the Company for submission to Shareholders at a general meeting to be convened by the Directors for a date not more than nine months after the date of the annual general meeting at which the continuation vote was proposed and failed. For these purposes, an ordinary resolution will not have been carried only if those members in person or by proxy who vote against the resolution hold in aggregate not less that twenty-five per cent. of the issued capital of the Company at such time entitled to attend and vote at such a meeting.
At the General Meeting, Shareholders will be asked to approve a resolution amending the date of the next continuation vote to the annual general meeting of the Company to be held in 2028 in order to seek to protect the VCT tax relief of investors participating in the Offer.
The capital and assets of the Company attributable to the Ordinary Shares shall on a winding up or on a return of capital be distributed amongst the Ordinary Shareholders pro rata according to the nominal capital paid up on their holdings of Ordinary Shares.
6.1 As at 31 August 2021 (being the latest practical date prior to the publication of this document), the interests of the Directors and their immediate families (all of which are beneficial) in the share capital of the Company which (i) are or will be notified to the Company in accordance with rule 3 of the Disclosure Guidance and Transparency Rules ("DTR 3") by each Director; or (ii) are interests of a connected person (within the meaning in DTR 3) of a Director which are or will be required to be disclosed under DTR 3 and the existence of which is known to or could with reasonable diligence be ascertained by that Director are or are expected to be as follows:
| As at 31 August 2021 | After the Offer has closed* | |||
|---|---|---|---|---|
| Director | Number of Ordinary Shares |
Percentage of issued share capital |
Number of Ordinary Shares |
Percentage of issued share capital |
| David Brock (Chairman) | 42,170 | 0.02% | 42,170 | 0.02% |
| Oliver Bedford | 58,335 | 0.03% | 83,007 | 0.03% |
| Ashton Bradbury | 43,223 | 0.02% | 43,223 | 0.02% |
| Angela Henderson | – | – | – | – |
| Justin Ward | 15,786 | 0.01% | 23,187 | 0.01% |
* Assuming that the Maximum Subscription is achieved in relation to the Offer Shares (i.e. including the Over-allotment Facility) and that all the allotments are made at an Offer Price based on the NAV per Share as at 31 July 2021.
6.2 As at 31 August 2021 (being the latest practical date prior to the publication of this document) and after the Offer has closed, the Company is aware of the following persons who hold or will hold, directly or indirectly, voting rights representing 3 per cent. or more of the issued share capital of the Company to which voting rights are attached (assuming that the Offer is fully subscribed):
| Name | As at 31 August 2021 | After the Offer has closed* | ||
|---|---|---|---|---|
| Number of Ordinary Shares |
Percentage of voting rights |
Number of Ordinary Shares |
Percentage of voting right* |
|
| Hargreaves Lansdown (Nominees) Limited |
11,693,952 | 5.11% | 11,693,952 | 4.37% |
* Assuming that the Maximum Subscription is achieved in relation to the Offer Shares (i.e. including the Over-allotment Facility) and that all the allotments are made at an Offer Price based on the NAV per Share as at 31 July 2021.
6.8 Details of those companies (other than the Company) and partnerships of which the Directors have been a member of the administrative, management or supervisory body or a partner at any time in the five years preceding the date of this document are as follows:
| Director | Current Directorships/ Partnerships |
Past Directorships/ Partnerships |
|---|---|---|
| David Brock | Draper Esprit VCT plc ECS Global Group Ltd Honest Brew Ltd Leeson Limited Park Regis Birmingham LLP Puma VCT 12 plc |
Kitwave Limited Primrose Group Limited Puma VCT 8 plc |
| Oliver Bedford | – | Hargreave Hale AIM VCT 2 plc |
| Ashton Bradbury | British Golf Association Limited Golf Union of Wales Limited Standard Life UK Smaller Companies Trust PLC |
– |
| Angela Henderson | Credit Suisse Asset Management Limited CWPLUS MacQuarie Capital (Europe) Limited PharmaSys S.A. |
PharmaSys Limited Qube Research & Technologies Limited |
| Justin Ward | Roehampton Club Limited Roehampton Club Members Limited School Explained Limited The Income & Growth VCT plc |
– |
The business address of all the Directors is: Talisman House, Boardmans Way, Blackpool FY4 5FY.
The following are the only contracts (not being contracts entered into in the ordinary course of business) which have been entered into by the Company in the 2 years immediately preceding the date of this document or which are expected to be entered into prior to Admission and which are, or may be, material or which have been entered into at any time by the Company and which contain any provision under which either Company has any obligation or entitlement which is, or may be, material to the Company as at the date of this document:
Under the terms of the Management Agreement, the Investment Manager is entitled to a management fee equal to 1.7 per cent. of the Net Asset Value of the Company as at the last business day immediately preceding the relevant payment date. The management fee is payable quarterly in arrears. The Management Agreement may be terminated by either party on not less than 12 months' notice in writing.
Other than the agreements, deeds and shareholdings referred to in paragraph 8 above, there have been no related party transactions relating to the Company between 1 October 2020 and the date of this document.
10.1 The Company is not regulated to conduct investment business under the FSMA, nor authorised by the FCA although it is registered with the FCA as a small UK registered AIFM.
The Company will not conduct any trading activity which is significant in the context of its group (if any) as a whole. No more than 10 per cent., in aggregate, of the value of the total assets of the Company at the time an investment is made may be invested in other listed closed-ended investment funds, except where those funds themselves have published investment policies which permit them to invest no more than 15 per cent. of their total assets in other listed closed-ended investment funds. The Company will, at all times, invest and manage its assets in a way which is consistent with its objectives of spreading investment risk and in accordance with its published investment policy. The Company will also invest and manage its assets to ensure compliance with the Listing Rules, the Prospectus Regulation Rules and the VCT Rules and restrictions.
The Company is subject to the City Code on Takeovers and Mergers (the "Code"). Under Rule 9 of the Code, if:
● any person acquires, whether by a series of transactions over a period of time or not, an interest in shares which (taken together with shares in which persons acting in concert with him are interested) carry 30 per cent. or more of the voting rights of a company; or
● any person, together with persons acting in concert with him, is interested in shares which in the aggregate carry not less than 30 per cent. of the voting rights of a company but does not hold shares carrying more than 50 per cent. of such voting rights and such person, or any person acting in concert with him, acquires an interest in any other shares which increases the percentage of shares carrying voting rights in which he is interested,
then, unless that person, and where appropriate any concert parties, have obtained the consent of the Panel on Takeovers and Mergers (the "Panel"), the acquirer will be required to make a cash offer for the outstanding shares of the company at a price not less than the highest price paid by the acquirer, or a concert party, for shares in the company in the preceding 12 month period.
The Company is also subject to sections 974-991 of the Act. Under these sections, where a takeover offer is made, and the offeror acquires or contracts to acquire, not less than 90 per cent. of the shares to which the offer relates (where the 90 per cent. is both value of shares and voting rights) then the offeror is entitled to require the holders of any shares who have not accepted the offer to compulsorily transfer those shares to the offeror. The consideration offered to those who have not accepted any offer and whose shares are being compulsorily acquired must, generally, be the same as that offered under the earlier offer.
In addition to the above, under sections 983-985 of the Act, where a successful takeover offer is made, or the offeror acquires or contracts to acquire 90 per cent. of the shares (both as to value and voting rights) then a holder of shares to which the offer relates who has not accepted the offer may require the offeror to acquire those shares on the terms of the offer or on such other terms as may be agreed. The offeror is required within one month of such right arising to notify a shareholder who has not accepted the offer notice in the prescribed manner.
Other than as provided for by the Act and the Code, the Company is not subject to any other rules relating to mandatory takeover bids and/or squeeze-out and sell-out rules in relation to the Shares.
As at the date of this document, the Company is not aware of the existence of any mandatory take-over bids or any attempt to acquire Shares under any squeeze-out or sell-out rules.
The table below sets out a summary of the information disclosed by the Company under the Market Abuse Regulation over the 12 month period preceding the date of this document and which is relevant as at the date of this document.
| Date | Title of Announcement | Disclosure |
|---|---|---|
| 22 June 2021 | Intention to launch an offer for subscription | The Company announced its intention to launch the Offer. |
13.1 The Investment Manager is regulated and authorised by the Financial Conduct Authority. It was incorporated as a private limited company in England and Wales on 16 January 1996 under number 03146580 and operates under the Act and the regulations made under the Act. The Investment Manager is domiciled in the UK. Its registered office is at 41 Lothbury, London, EC2R 7AE. The telephone number is 0207 523 4500.
In the 12 months preceding the date of this document there has been no governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Company is aware), which may have, or have had in the recent past, significant effects on the Company's financial position or profitability.
15.1 The statements attributed to the Investment Manager in this document have been included in the form and context in which they appear with the consent and authorisation of the Investment Manager. The
Investment Manager accepts responsibility for those statements, and to the best of the knowledge of the Investment Manager (which has taken all reasonable care to ensure that such is the case) those statements are in accordance with the facts and contains no omission likely to affect its import.
In the event of an offer being made by a financial intermediary, the financial intermediary must give investors information on the terms and conditions of the offer being made by the financial intermediary at the time they introduce such offer to investors. Any financial intermediary using this document has to state on its website that it uses this document in accordance with the consent and the terms and conditions of the Offer at the time they introduce the Offer to investors. Any application made by investors to any intermediary is subject to the terms and conditions imposed by each intermediary.
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Copies of the following documents will be available for inspection at any time on the Company's website at www.hargreaveaimvcts.co.uk or in person during normal business hours on any Business Day (Saturdays, Sundays and public holidays excepted) at the registered office of the Company at Talisman House, Boardmans Way, Blackpool FY4 5FY whilst the Offer remains open:
The documents set out above are available at the Company's website, www.hargreaveaimvcts.co.uk.
This Prospectus is available for inspection at www.hargreaveaimvcts.co.uk and https://data.fca.org. uk/#/nsm/nationalstoragemechanism and, whilst the Offer remains open, copies are available for collection, free of charge, from the registered office of the Company at Talisman House, Boardmans Way, Blackpool FY4 5FY on any Business Day.
Dated: 2 September 2021
The following terms and conditions apply to the Offer.
Save where the context otherwise requires, words and expressions defined in this document have the same meanings when used in these terms and conditions and in the Application Form set out at the end of this document. Words importing one gender (where appropriate) include any other gender and words importing the singular shall (where appropriate) include the plural and vice versa.
The Application Form forms part of these terms and conditions of the Offer.
8.4. agree that if, following the issue of all or any Offer Shares applied for pursuant to the Offer your remittance is not honoured on first presentation, the Offer Shares may, subject to the Articles and forthwith upon payment by CGWL of the Offer Price of the Offer Shares to the Company, be transferred to CGWL at the relevant Offer Price per Offer Share and any director of CGWL is hereby irrevocably appointed and instructed to complete and execute all or any form(s) of transfer and/or any other documents in relation to the transfer of the Offer Shares to CGWL or such other person as CGWL may direct and to do all such other acts and things as may be necessary or expedient, for the purpose of or in connection with, transferring title to the Offer Shares to CGWL or such other person, in which case you will not be entitled to any payment in respect of such Offer Shares;
8.5. agree that, in respect of those Offer Shares for which your application has been received and is not rejected, acceptance of your application shall be constituted, at the election of the Company either (i) by notification to the London Stock Exchange of the basis of allocation (in which case acceptance shall be on that basis) or (ii) by notification of acceptance thereof to CGWL;
8.14. agree to CGWL carrying out the necessary enquiries to verify your identity (including an electronic identity check) to ensure compliance with the UK Money Laundering Regulations, the Common Reporting Standard or FATCA;
8.15. confirm that you are not applying on behalf of a person engaged in money laundering, drug crimes, terrorist financing or terrorism;
for Ordinary Shares shall be deemed, and (unless the Company is satisfied that their respective Ordinary Shares can be allotted without breach of United States securities laws) shall be required, to represent and warrant to the Company that they are not a US Person, being a person in the United States ("US Person") and that they are not subscribing for such Ordinary Shares for the account of any such person and will not offer, sell, renounce, transfer or deliver, directly or indirectly, such Ordinary Shares in the United States or to any such person. As used herein, ''United States'' means the United States of America (including each of the States and the District of Columbia), its territories or possessions or other areas subject to its jurisdiction. In addition, the Company has not been and will not be registered under the US Investment Company Act, as amended. The Investment Manager is not registered under the United States Investment Advisers Act of 1940, as amended.
Such commissions will only be paid if, and to the extent, it is permitted under legislation and regulations and will be paid by CGWL. 'Execution only' financial intermediaries should keep a record of Application Forms submitted bearing their FCA number to substantiate any claim for commission.
Annual trail commission will be paid annually by CGWL on or around the annual anniversary date of allotment and further provided that no personal recommendation or financial advice is provided by the Financial Intermediary to the client (where the client is a UK retail investor). The administration of annual trail commission will be managed by CGWL which will maintain a register of financial intermediaries entitled to trail commission.
For the avoidance of doubt, should an existing Shareholder decide to seek financial advice from their existing 'execution only' Financial Intermediary in respect of participating in the Offer or otherwise, any trail commission which is currently being paid to that Shareholder's Financial Intermediary pursuant to an existing holding in the Company must cease and either the Company, the Investment Manager or CGWL must be notified accordingly.
reserve the right to cease payments if they believe advice may have been given or for any other reason in their absolute discretion).
In respect of existing trail commission arrangements with Financial Intermediaries, such payments will continue (to the extent permitted under legislation and regulations), but not if (in the case of UK retail clients) subsequent financial advice or personal recommendations in respect of the holding is given. As a result, should an existing Shareholder decide to seek financial advice from their existing 'execution only' Financial Intermediary in respect of participating in the Offer, any annual trail commission which is currently being paid to that Financial Intermediary in respect of an existing holding by that Shareholder in the Company must cease and either the Company, the Investment Manager or CGWL should be notified accordingly (though the Company and CGWL also reserve the right to cease payments if they believe advice may have been given or for any other reason in their absolute discretion).
If a Shareholder ceases to be a client of an 'execution only' Financial Intermediary and becomes a client of another 'execution only' intermediary, the new 'execution only' intermediary firm will not be entitled to receive trail commission in respect of the client's shareholding, except where the new intermediary has undertaken a business acquisition of the original intermediary firm and a novation agreement (or agreement of similar effect) is in place in respect of the client.
Personal data held by the Receiving Agent and/or the Registrar may be used to process basic changes to shareholder records, process bank account information for processing dividend payments, and to carry out other ancillary processing functions in order to ensure that the Receiving Agent and/or Registrar is able to discharge its obligations under the Offer Agreement or Registrar Agreement respectively; and may be disclosed to any person with legal, administrative or regulatory power over the Receiving Agent and/ or Registrar in respect of the services provided by the Receiving Agent and/or Registrar under the Offer Agreement or Registrar Agreement respectively, the Receiving Agent's or Registrar's affiliates, including such affiliates which are outside of the UK and the EEA in countries which do not have similar protections in place regarding the information and its use (provided that the Receiving Agent and/or Registrar shall ensure that any affiliates outside the UK and the EEA to whom personal data is disclosed have put in place proper security measures to ensure at least the same level of protection of the personal data as is required under the data
protection laws) and to any third parties who are involved in carrying out functions related to the services provided under the Offer Agreement and/or Registrar Agreement.
By becoming registered as a holder of Ordinary Shares, a person becomes a data subject (as defined in the data protection laws) and acknowledges that the processing by the Receiving Agent and/or the Registrar of any personal data relating to them will take place in the manner described above. Processing by the Company of any personal data relating to such data subjects will be undertaken in accordance with the Company's privacy policy. Please refer to the Company's website (www.hargreaveaimvcts.co.uk) for a copy of the privacy policy. You have certain rights in relation to your personal information, including the right to receive a copy of the information that is held about you. For more details, please see the privacy notice referred to above.
Investors who wish to take advantage of the ability to trade in Offer Shares in uncertificated form, and who have access to a CREST account, may arrange to have their Offer Shares allotted directly to their CREST account, or subsequently to convert their holdings into dematerialised form in CREST. Share certificates may be registered directly to an Investor's nominee company and deposited to CREST, however, applications must be made in the name of the Investor, rather than that of the nominee company. Investors should be aware that Offer Shares delivered in certificated form are likely to incur higher dealing costs when sold than those in respect of Offer Shares held in CREST. The Company's share register will be kept by Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA. Share issues made close to the end of the tax year may need to be in certificated form to allow the investment to be made within the required tax year.
In order to comply with the UK Money Laundering Regulations, CGWL will conduct an electronic identity check on all Investors, regardless of the size of the consideration or payment method. The identity of the Investor will need to be verified in accordance with the UK Money Laundering Regulations.
In addition, the Company reserves the right to request that an Investor provides any documentary evidence required for the Company to verify the identity of the Investor. The Company may reject the application of any Investor on the basis of the results of any electronic identity check or if it is not satisfied that the necessary documentation has been provided, where requested, to allow it to verify the identity of the Investor.
Copies of this document and the Application Form are available until the close of the Offer from the Company's website at www.hargreaveaimvcts.co.uk.
| "Act" | the Companies Act 2006, as amended |
|---|---|
| "Admission" | the admission of any Offer Shares to the premium listing segment of the Official List of the FCA and to trading on the main market of the London Stock Exchange becoming effective in accordance with the Listing Rules and the admission and disclosure standards of the London Stock Exchange respectively |
| "Adviser Charges" | a charge due to a Financial Intermediary from an Investor in relation to the provision of advice and/or related services provided or to be provided by the Financial Intermediary to such Investor in connection with an investment in the Company which is agreed between the Financial Intermediary and the Investor in accordance with applicable laws |
| "AIC" | the Association of Investment Companies |
| "AIC Code" | the AIC's Code of Corporate Governance for investment companies (February 2019), as amended from time to time |
| "AIFM" | an alternative investment fund manager, within the meaning of the UK AIFMD Laws (as applicable) |
| "AIM" | the AIM Market operated by the London Stock Exchange |
| "Annual Running Costs" | the running costs of the Company, including the management fees payable to the Investment Manager, accounting and administration fees, directors' fees, other professional adviser fees such as those of the auditors, taxation advisers, sponsor and registrar, and the costs of communicating with Shareholders; however, such costs shall exclude any VAT payable thereon (the payment of which is the responsibility of the Company) |
| "Application Form" | the application form for the Offer set out at the end of this Prospectus |
| "AQSE Growth Market" | the Growth Market of the Aquis Stock Exchange, a recognised investment exchange for growth companies operated by Aquis Exchange PLC |
| "Articles of Association" or "Articles" |
the articles of association of the Company, as amended from time to time |
| "Auditors" | BDO LLP |
| "Board" | the board of directors of the Company |
| "Business Day" | a day (excluding Saturdays, Sundays and public holidays in England and Wales) on which banks generally are open for business in London for the transaction of normal business |
| "certificated" or "in certificated form" |
a share or other security which is not in uncertificated form |
| "CGWL" or "Administrator" or "Custodian" or "Receiving Agent" |
Canaccord Genuity Wealth Limited, which is authorised and regulated by the FCA |
|---|---|
| "Circular" | the circular to Shareholders issued by the Company on or around the date of this Prospectus convening the General Meeting to approve additional share issuance authority in connection with the Offer and the operation of the DRIS |
| "COBS" | the 'Conduct of Business Sourcebook' as set out in the FCA Handbook of rules and guidance |
| "Common Reporting Standard" or "CRS" |
the global standard for the automatic exchange of financial information between tax authorities developed by the Organisation for Economic Co-operation and Development |
| "Company" | Hargreave Hale AIM VCT plc |
| "Company Secretary" | JTC (UK) Limited |
| "Covid-19" | a novel coronavirus disease, which originally surfaced in Wuhan, China in late 2019 |
| "CREST" | the facilities and procedures for the time being of the relevant system of which Euroclear has been approved as operator pursuant to the CREST Regulations, in accordance with which Shares may be held in uncertificated form |
| "CREST Regulations" | the Uncertificated Securities Regulations 2001 (SI No. 2001/3755), as amended from time to time |
| "Directors" | the directors of the Company from time to time, and "Director" shall be construed accordingly |
| "Disclosure Guidance and Transparency Rules" or "DTR" |
the Disclosure Guidance and Transparency Rules published by the FCA from time to time |
| "Dividend Reinvestment Scheme" or "DRIS" |
the Company's dividend reinvestment scheme established in accordance with the DRIS Terms and Conditions |
| "DRIS Terms and Conditions" | the terms and conditions relating to the Dividend Reinvestment Scheme available on the Company's website at www.hargreaveaimvcts.co.uk |
| "Eligible Shares" | shares in Qualifying Companies which do not carry preferential rights to dividends, assets on a winding up or redemption |
| "EEA" | the European Economic Area |
| "EU AIFM Delegated Regulation" | the Commission Delegated Regulation (EU) No 231/2013 of 19 December 2012 supplementing Directive 2011/61/EU of the European Parliament and of the Council with regard to exemptions, general operating conditions, depositaries, leverage, transparency and supervision |
| "EU AIFM Directive" | Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010, and the EU AIFM Delegated Regulation |
|---|---|
| "EU MiFID II" | Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID) and Regulation (EU) No 600/2014 of the European Parliament and the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012 (MiFIR), and together with MiFID, MiFID II) |
| "EU PRIIPs Regulation" | Regulation (EU) No 1286/2014 of the European Parliament and of the Council of 26 November 2014 on key information documents for packaged retail and insurance-based investment products (PRIIPs) and its implementing and delegated acts |
| "Euroclear" | Euroclear UK and Ireland Limited, the operator of CREST |
| "European Union" or "EU" | the European Union first established by the treaty made at Maastricht on 7 February 1992 |
| "EUWA" | European Union (Withdrawal) Act 2018 (as amended) |
| "Existing Shareholder" | a holder of Ordinary Shares as at the date of this document |
| "FATCA" | sections 1471 to 1474 of the US Tax Code, known as the US Foreign Account Tax Compliance Act of 2010 (together with any regulations, rules and other guidance implementing such US Tax Code sections and any applicable intergovernmental agreement or information exchange agreement and related statutes, regulations, rules and other guidance thereunder) |
| "FCA" | the Financial Conduct Authority in the United Kingdom and/or any successor or replacement body or bodies from time to time |
| "Financial Intermediary" or "Financial Adviser" |
in relation to an Investor, his/her financial intermediary as identified at section 14 of the Application Form |
| "FSMA" | the Financial Services and Markets Act 2000, as amended from time to time |
| "General Meeting" | the general meeting of the Company to be held on 6 October 2021 (or any adjournment thereof) convened by a notice contained in the Circular |
| "HMRC" | HM Revenue & Customs |
| "Investment Manager" or "Hargreave Hale" |
Hargreave Hale Limited, trading as Canaccord Genuity Fund Management, which is authorised and regulated by the FCA |
| "Investor(s)" | a subscriber for Offer Shares under the Offer |
| "IPEV Guidelines" | the International Private Equity and Venture Capital Valuation Guidelines |
| "ITA" | Income Tax Act 2007, as amended | ||
|---|---|---|---|
| "Knowledge Intensive Company" | a company satisfying the conditions in Section 331(A) of Part 6 ITA | ||
| "Listing Rules" | the listing rules made by the FCA under Part VI of FSMA, as amended from time to time |
||
| "London Stock Exchange" | London Stock Exchange plc | ||
| "Management Agreement" | the agreement dated 25 June 2019 (as amended) between the Company and Hargreave Hale Limited governing the management of Hargreave Hale AIM VCT's investments |
||
| "MAR" or "Market Abuse Regulation" |
the UK version of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC, which is part of UK law by virtue of the EUWA |
||
| "Marlborough Special Situations Fund" |
the Marlborough Special Situations Fund launched on 12 July 1995 being an authorised collective investment scheme as defined in FSMA |
||
| "Maximum Subscription" | the receipt of the maximum subscription monies under the Offer, being an aggregate amount of £40,000,000 (including the Over- allotment Facility) |
||
| "MiFID II Product Governance Requirements" |
has the definition given in the section entitled "Information to Distributors" in the Part entitled "Important Information" of this document |
||
| "NAV per Share" | the NAV calculated on a per Share basis | ||
| "Net Asset Value" or "NAV" | the aggregate of the gross assets of the Company less its total liabilities calculated in accordance with the Company's accounting policies |
||
| "Non-Qualifying Investment" | an investment which is not a Qualifying Investment and which is permitted under the VCT Rules |
||
| "Offer" | the offer for subscription for Offer Shares by the Company as described in this document |
||
| "Offer Agreement" | the offer agreement between the Company, CGWL and Hargreave Hale detailed in paragraph 8.1 of Part 6 of this document |
||
| "Offer Price" | the relevant offer price for the Offer Shares as determined by the Pricing Formula |
||
| "Offer Shares" | the new Ordinary Shares in the Company to be issued pursuant to the Offer |
| "Ongoing Charges Ratio'' | the ongoing costs of managing and operating the Company divided by its average NAV, calculated in accordance with AIC guidance and excluding non-recurring costs |
|
|---|---|---|
| "Ordinary Shares" or "Shares" | ordinary shares of 1p each in the capital of the Company, including, the Offer Shares where the context requires |
|
| "Over-allotment Facility" | the ability of the Directors of the Company (at their discretion), if the Offer is oversubscribed, to increase the number of Offer Shares available for subscription under the Offer to raise further amounts under the Offer of up to £20 million |
|
| "Pricing Formula" | the NAV per Share (with an appropriate adjustment for any dividends declared and not yet paid on the existing Ordinary Shares if the allotment occurs whilst the Ordinary Shares are classified as ex dividend) as last published by the Company prior to the date of allotment divided by 0.965 to allow for issue costs of 3.5 per cent. calculated, in pence, to two decimal places |
|
| "Prospectus" | this document dated 2 September 2021 | |
| "Prospectus Regulation" | the UK version of Regulation (EU) 2017/1129 as amended from time to time and any successor or replacement regulation, which is part of UK law by virtue of the EUWA |
|
| ''Prospectus Regulation Rules'' | the prospectus regulation rules made by the FCA under Part VI of FSMA, as amended from time to time |
|
| "Qualifying Company" | an investment made by a Venture Capital Trust in a trading Company which comprises a Qualifying Holding under Chapter 4 of Part 6 of ITA |
|
| "Qualifying Holding" | shares in, or securities of, a Qualifying Company held by a VCT which meets the requirements described in Part 6 of ITA |
|
| "Qualifying Investment" | an investment in a Qualifying Holding | |
| "Qualifying Limit" | an investor's investment limit of £200,000 per tax year that is eligible for the income tax relief associated with investment in a VCT |
|
| "Qualifying Subscribers" | an individual, aged 18 or over, who subscribes for Ordinary Shares within the Qualifying Limit |
|
| ''Qualifying Trade'' | a trade complying with the requirements of section 300 ITA | |
| "Registrar" or "Equiniti" | Equiniti Limited | |
| "Regulation S" | Regulation S under the US Securities Act | |
| "Regulatory Information Service" or "RIS" |
a regulatory information service that is on the list of regulatory information services maintained by the FCA |
|
| "Resolution 1" | the ordinary resolution to be proposed at the General Meeting which, if passed, will grant the Directors the authority to allot Ordinary Shares pursuant to the Offer |
| "Resolution 2" | the ordinary resolution to be proposed at the General Meeting which, if passed, will grant the Directors the authority to allot Ordinary Shares pursuant to the DRIS |
|
|---|---|---|
| "Resolution 3" | the special resolution to be proposed at the General Meeting which, if passed, will grant the Directors the authority to disapply pre-emption rights in relation to Ordinary Shares issued under the Offer |
|
| "Resolution 4" | the special resolution to be proposed at the General Meeting which, if passed, will grant the Directors the authority to disapply pre-emption rights in relation to Ordinary Shares issued under the DRIS |
|
| "Restricted Jurisdiction" | any jurisdiction where local law or regulations may result in a risk of civil, regulatory or criminal exposure or prosecution if information or documentation concerning the Offer (including this document) is sent or made available to a person in that jurisdiction |
|
| "Risk Finance Guidelines" | the guidelines on state aid to promote risk finance investments published by the European Commission |
|
| "Risk Finance State Aid" | State Aid received by a company as defined in Section 280B (4) of ITA | |
| "Shareholder" | a holder of Ordinary Shares | |
| "Shareholder Information" | information regarding an Investor and/or Shareholder's shareholding, including the number of Shares held, subscription value, offer price, allotment date(s), current value and dividend history |
|
| "Sponsor" | Dickson Minto W.S., which is authorised and regulated by the FCA | |
| "State Aid" | State Aid received by a company as defined in Section 280B (4) of ITA | |
| "Sterling" or "£" | pound sterling, being the lawful currency of the United Kingdom | |
| "Subscription" | the amount in pounds Sterling that an Investor has subscribed for Offer Shares under the Offer |
|
| "Target Market Assessment" | has the definition given in the section entitled "Information to Distributors" in the Part entitled "Important Information" of this Prospectus |
|
| "Terms and Conditions of the Adviser Charges Agreement" |
the terms and conditions of the adviser charges agreement in relation to the facilitation by the Company of the payment of Adviser Charges to a Financial Intermediary on behalf of an Investor set out on pages 100 to 101 of this document |
|
| "Terms and Conditions of the Offer for Subscription" |
the terms and conditions of application in respect of the Offer, as set out in Part 7 of this document |
|
| "Total Return" | in respect of an Ordinary Share, the sum of (i) the most recent published NAV per Share plus (ii) all dividends paid |
|
| "UK" or "United Kingdom" | the United Kingdom of Great Britain and Northern Ireland |
| "UK AIFMD Laws" | (i) the Alternative Investment Fund Managers Regulations 2013 (SI 2013/1773) and any other implementing measure which operated to transpose EU AIFM Directive in to UK law before 31 January 2020 (as amended from time to time including by the Alternative Investment Fund Managers (Amendment) (EU Exit) Regulations 2019 (SI 2019/328)); and |
|---|---|
| (ii) the UK versions of the EU AIFM Delegated Regulation and any other delegated regulations in respect of the EU AIFM Directive, each being part of UK law by virtue of the EUWA as further amended and supplemented from time to time including by the Alternative Investment Fund Managers (Amendment) (EU Exit) Regulations 2019 (SI 2019/328), the Technical Standards (Alternative Investment Funds Management Directive) (EU Exit) Instrument 2019 (FCA 2019/37) and the Exiting the European Union: Specialist Sourcebooks (Amendments) Instrument 2019 (FCA 2019/25) |
|
| "UK Code" | the City Code on Takeovers and Mergers, as amended from time to time |
| "UK GDPR" | the UK version of the EU GDPR (2016/679) which is part of UK law by virtue of the EUWA, as amended and supplemented from time to time including by the Data Protection, Privacy and Electronic Communications (Amendments etc.) (EU Exit) Regulations 2019 |
| "UK MiFID Laws" | (i) the Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (SI 2017/701), The Data Reporting Services Regulations 2017 (SI 2017/699) and the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2017 (SI 2017/488), and any other implementing measure which operated to transpose EU MiFID II in to UK law before 31 January 2020 (as amended and supplemented from time to time including by: (a) Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018; (b) The Financial Regulators' Powers (Technical Standards etc.) and Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2019 (SI 2019/576); (c) The Financial Services (Miscellaneous) (Amendment) (EU Exit) Regulations 2019); and (d) The Financial Services (Electronic Money, Payment Services and Miscellaneous Amendments) (EU Exit) Regulations 2019; and |
| (ii) the UK version of Regulation (EU) No 600/2014 of the European Parliament, which is part of UK law by virtue of the EUWA, as amended and supplemented from time to time including by: (a) Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018; (b) The Financial Regulators' Powers (Technical Standards etc.) and Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2019 (SI 2019/576); (c) The Financial Services (Miscellaneous) (Amendment) (EU Exit) Regulations 2019; and (d) The Financial Services (Electronic Money, Payment Services and Miscellaneous Amendments) (EU Exit) Regulations 2019 |
| "UK Money Laundering Regulations" |
The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (SI 2017/692) as amended and supplemented from time to time including by the Money Laundering and Transfer of Funds (Information) (Amendment) (EU Exit) Regulations 2019 |
|---|---|
| "UK PRIIPS Laws" | the UK version of the EU PRIIPs Regulation which is part of UK law by virtue of the EUWA, as amended and supplemented from time to time including by the Packaged Retail and Insurance-based Investment Products (Amendment)(EU Exit) Regulations 2019 (February 2019); and the Cross-Border Distribution of Funds, Proxy Advisors, Prospectus and Gibraltar (Amendment) (EU Exit) Regulations 2019 |
| "uncertificated" or "in uncertificated form" |
a share or other security title to which is recorded in the register of the share or other security concerned as being held in uncertificated form (i.e. in CREST) and title to which may be transferred by using CREST |
| "United States" or "US" | the United States of America, its territories and possessions, any state of the United States of America, the District of Columbia, and all other areas subject to its jurisdiction |
| "US Investment Company Act" | the United States Investment Company Act of 1940, as amended |
| "US Persons" | a US Person within the meaning of Regulation S |
| "US Securities Act" | the United States Securities Act of 1933, as amended |
| "US Tax Code" | the US Internal Revenue Code of 1986, as amended |
| "VAT" | value added tax |
| "VCT" or "Venture Capital Trust" | venture capital trust as defined in section 259 ITA |
| "VCT Rules" | all rules and regulations that apply to VCTs from time to time, including the ITA |
The following instructions should be read in conjunction with the Application Form, including the Terms and Conditions of the Adviser Charges Agreement set out on pages 100 to 101 of the document, and shall be construed as being terms of the Offer. References in these instructions to sections are references to sections of the Application Form.
Insert your full name, address, date of birth, country/place of birth, nationality, email address and telephone number in block capitals in section 1. No joint applications are permitted.
You must be the intended beneficial owner of the Offer Shares (please do not use a nominee name as this may jeopardise your entitlement to VCT tax reliefs). If you would like your Offer Shares to be issued directly to a nominee and/or into CREST, please also complete Section 3.
Applications may only be made by persons aged 18 or over.
The UK Government requires the financial services industry to collect and review details of financial accounts and assets held by persons that have tax residency in jurisdictions other than the UK. This information is reported to HMRC for onward transmission under the exchange of information articles contained within the various treaties and conventions to which the UK is a party.
Investors are required to list all countries in which they are resident for tax purposes in section 2. Investors should include the relevant tax reference number, which is often referred to as a Tax Information Number (TIN).
If you are a US citizen please tick the box on the second page of the Application Form. A US citizen is a person who is (a) born in the United States, (b) naturalised as a US citizen or (c) has a parent who is a US citizen. Further, a person can be deemed a 'tax resident' of the United States by virtue of the 'substantial presence test' or if they hold a 'green card'.
Any Offer Shares allotted to you will be in a registered form capable of being transferred by means of the CREST system. Investors who wish to take advantage of the ability to trade in Offer Shares in uncertificated form, and who have access to a CREST account, may arrange to have their Offer Shares allotted directly to their CREST account, or subsequently to convert their holdings into dematerialised form in CREST. Investors should be aware that Offer Shares delivered in certificated form are likely to incur higher dealing costs when sold than those in respect of Offer Shares held in CREST. The Company's share register will be kept by Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA. Offer Shares issued close to the end of the tax year may need to be issued in certificated form to allow the investment to be made within the required tax year.
Please provide details of how you acquired the money you plan to subscribe under the Offer. If you select "Earned income", please disclose your occupation where indicated. If you select "Pension income", please disclose your previous occupation where indicated. If you select "Savings", please provide further details of how these savings were generated. If you select "Other" please provide as much detail as possible in the box provided. In some cases, you may be required to provide further information and documentary evidence.
Please indicate whether you have received financial advice or a personal recommendation in connection with your application for Offer Shares. If you have received financial advice or a personal recommendation, please complete this section and ask your Financial Intermediary to complete section 14.
Commission cannot be paid to Financial Intermediaries in respect of advised sales of retail investment products sold to retail investors in the UK. Therefore if your Financial Intermediary provides you with advice in respect of this application for Offer Shares or otherwise, neither CGWL nor the Company will pay commission to your Financial Intermediary. Instead, your Financial Intermediary will need to agree Adviser Charges with you which you will be responsible for paying. The Company can, however, facilitate the payment of Adviser Charges on your behalf so that you do not have to make a separate payment to your Financial Intermediary. The remuneration will
be an Adviser Charge for advice provided to you in relation to the Company and this charge will be withdrawn from the funds the Company receives from you. This is what is meant by facilitating the payment of this charge by the Company and the facilitation service is subject to the terms and conditions set out in the Terms and Conditions of the Adviser Charges Agreement set out on pages 100 to 101 of this document. You will need to discuss and agree the amount and method of paying any Adviser Charges with your Financial Intermediary.
The Adviser Charge is treated separately to your investment and will not attract any income tax relief. By way of example, you can apply to make an investment of £10,000 ('Total Investment' box in section 7) and pay Adviser Charges of £200 ('Adviser Charge' box in section 6), which will require a cheque from you for £10,200 ('Total amount payable' box in section 8).
Alternatively, you can submit a cheque for £10,000 ('Total amount payable' box in section 8), of which £9,800 ('Total Investment' box in section 7) will be invested in new Offer Shares (and therefore attract income tax relief) and £200 ('Adviser Charge' box in section 6) will be paid to your Financial Intermediary as Adviser Charges.
Payments of Adviser Charges on behalf of Investors will be paid by the Company only in respect of the amount stated in the 'Adviser Charge' box in section 6. The Terms and Conditions of the Adviser Charges Agreement set out on pages 100 to 101 of this document will apply. In addition, no payment will be made by the Company unless the relevant application is successful and the Company is in receipt of sufficient cleared funds from Investors in the amount set out in the 'Total amount payable' box in section 8 (which must comprise an aggregate of the amounts set out in the 'Total Investment' box in section 7 and the 'Adviser Charge' box in section 6).
If you require the Company to facilitate the payment of any such Adviser Charges on your behalf, please tick the box in section 6 and specify the amount (in pounds Sterling) of the Adviser Charges that you require the Company to pay on your behalf in the 'Adviser Charge' box in section 6. By ticking the box in section 6 you are acknowledging and agreeing that the Terms and Conditions of the Adviser Charges Agreement set out on pages 100 to 101 of this document apply and by signing the Application Form you are agreeing to the Terms and Conditions of the Adviser Charges Agreement. You will also need to ask your Financial Intermediary to complete the relevant parts of section 14 of the Application Form.
Please note that the Adviser Charges that you are instructing the Company to pay should relate to such advice or services provided to you by your Financial Intermediary in connection with the Offer only. The Company will only accept instructions from you to facilitate the payment of the Adviser Charges by using the Application Form unless it agrees otherwise at its absolute discretion.
The Terms and Conditions of the Adviser Charges Agreement are set out on pages 100 to 101 of this document and are important. You should take time to read them before you sign and complete section 13 of the Application Form. If you are uncertain about any aspect of the Terms and Conditions of the Adviser Charges Agreement or how to complete the Application Form, you should discuss this with your Financial Intermediary or any other professional adviser acting on your behalf.
Insert the sums you are subscribing for in section 7. The minimum subscription per Investor under the Offer is £5,000 in aggregate across both the 2021/2022 and 2022/2023 tax years. Applications in respect of less than £5,000 in aggregate will not be accepted.
The total amount payable by you will be the aggregate of the amounts set out in section 6 (if applicable) and section 7. Please complete this total amount in pounds Sterling in the box provided in section 8. Payment by you must be in respect of this total amount.
The Company reserves the right to decline to allot Offer Shares if an Investor's funds have not cleared by the date of allotment or if the funds cannot be matched to the details provided in the Application Form. Please therefore ensure that your completed Application Form and funds are submitted well in advance of the intended allotment date. This is particularly important if you wish to be issued Offer Shares in the final allotment prior to the tax year end.
Please note the transmission and clearance times for the following methods of payment:
Investors may choose from the following methods of payment.
Payment by personal cheque, building society cheque or banker's draft must be made in pounds Sterling and drawn on a branch of a bank or building society in the UK which is either a member of the Cheque and Credit Clearing Company Limited or the CHAPS Clearing Company Limited or which has arranged for its cheques or bankers' drafts to be cleared through the facilities provided by members of either of these companies. Cheques must be drawn on the personal account of the individual investor.
Building society cheques and bankers' drafts will only be accepted where embossed or stamped with the name of the account holder and drawn from the account of the individual Investor.
Cheques and bankers' drafts should be pinned to the completed Application Form.
Electronic payments will only be accepted from a UK bank or building society which is either a member of the Cheque and Credit Clearing Company limited or the CHAPS Clearing Company Limited.
The Investor's surname and initials should be quoted as the reference for the payment. Investors must provide details of the account in order to allow CGWL to reconcile the electronic payment to your Application Form.
Electronic payments will only be accepted from the personal account of the individual Investor and where the details of the bank transfer match the details provided in the Application Form. Payments from third party accounts will not be accepted.
In order to comply with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, as amended by the Money Laundering and Terrorist Financing (amendment) Regulations 2019 (the "UK Money Laundering Regulations"), CGWL will conduct an electronic identity check on all Investors, regardless of the size of the consideration or payment method. The identity of the Investor will need to be verified in accordance with the UK Money Laundering Regulations.
In addition, the Company reserves the right to request that an Investor provides any documentary evidence required for the Company to verify the identity of the Investor. The Company may reject the application of any Investor on the basis of the results of any electronic identity check or if it is not satisfied that the necessary documentation has been provided, where requested, to allow it to verify the identity of the Investor.
Please complete your nominated bank account details in section 10 of the Application Form, unless you have elected to participate in the Dividend Reinvestment Scheme or have requested that your Offer Shares be issued to a nominee. If this section is not completed, there may be a delay in the payment of dividends to you.
Please complete this section even if you are an existing Shareholder and have previously provided a mandate. Where your new Offer Shares are added to an existing holding account designation, this instruction will (unless your holding is in CREST) be applied to your aggregated holding (i.e. to both your existing Ordinary Shares and your new Offer Shares) irrespective of any previous dividend payment instruction.
If you are an existing Shareholder and would like to withdraw from the Dividend Reinvestment Scheme (for the avoidance of doubt, in respect of all Shares, both new Offer Shares and existing Ordinary Shares), please tick the relevant box. This withdrawal election (which will apply only if your Application Form is accepted, following the allotment of Offer Shares to you and subject to any notice periods required under the terms of the Dividend Reinvestment Scheme) will apply to all Ordinary Shares held in the existing holding account designation to which your Offer Shares are added. If you hold multiple holdings under different holding account designations, please provide all holdings account designations to which you wish the withdrawal election to apply.
Please complete this section to indicate if you would like to receive Hargreave Hale AIM VCT related marketing communications, interim management statements and monthly factsheets by email.
If you would like to opt in to electronic communications in respect of your shareholding in the Company, please tick the relevant box in this section.
CGWL requires your permission to share your personal information with your Financial Adviser. By ticking the relevant box(es), you can positively identify to CGWL which information they can share with your Financial Adviser. The information that can be shared will fall into one of two categories: (a) correspondence confirming the receipt of your Application Form; and (b) Shareholder Information (see Definitions) regarding this investment and any prior investments in the Company.
Please sign and date the Application Form in section 13. The Application Form may be signed by someone else on your behalf, if duly authorised by power of attorney to do so. Any power of attorney pursuant to which the Application Form is signed (or a duly certified copy thereof) must be enclosed for inspection.
Financial Intermediaries who wish to receive payment from the Company for applications in accordance with this section should complete section 14A and stamp it, giving their full name and address, telephone number and FCA number. Financial Intermediaries will also need to arrange for signature by an authorised signatory at section 14F to confirm that (i) the information provided by the Financial Intermediary is correct (ii) it acknowledges and agrees to the Terms and Conditions of the Adviser Charges Agreement (to the extent applicable) set out on pages 100 to 101 of this document and (iii) if applicable, it agrees to the rebate of commission as indicated by it at section 14D of the Application Form.
The right is reserved to withhold payment to any Financial Intermediary if CGWL is not, in its sole discretion, satisfied that the agent is so authorised.
Financial Intermediaries should keep a record of Application Forms submitted bearing their stamp to substantiate any claim for payment. Claims for payment must be made and substantiated on submission of an Application Form.
If no advice has been provided by a Financial Intermediary to an Investor in respect of their application for Offer Shares, then authorised Financial Intermediaries should tick the first box in section 14B.
If no advice has been provided, CGWL is offering to pay introductory commission to authorised Financial Intermediaries at the rate of 1 per cent. on the value of successful applications submitted through them or introductory commission of 0.5 per cent. plus trail commission of 0.375 per cent. of the amount subscribed by an Investor per annum (limited to five years). Introductory commission will only be paid in respect of successful applications and only on the amounts set out in the 'Total Investment' box in section 7.
Financial Intermediaries should select the relevant box in section 14C to choose whether they receive only introductory commission or introductory commission and trail commission.
The introductory commission may be rebated by Financial Intermediaries and reinvested by them on behalf of their clients through additional Offer Shares (the rebate in each case may be in part or in whole in 25 per cent. increments).
If Financial Intermediaries choose to rebate introductory commission in the form of additional Offer Shares for the Investor they should complete section 14D and specify the percentage amount of introductory commission that they require to be rebated.
Section 14F should be signed and dated by an authorised representative of the Financial Intermediary.
Send the completed Application Form together with your cheque or banker's draft by post, or deliver it by hand (during normal business hours only), to Canaccord Genuity Wealth Limited, c/o Talisman House, Boardmans Way, Blackpool FY4 5FY so as to be received no later than 12.00 p.m. on 1 April 2022 for investment in the 2021/22 tax year and no later than 12.00 p.m. on 12 August 2022 for investment in the 2022/23 tax year (unless the Offer is closed prior to those dates).
If you post your Application Form you are recommended to use first class post and to allow at least two Business Days for delivery.
If you have any queries on the procedure for application and payment, you should contact CGWL (telephone 01253 376 622) or your normal Financial Adviser.
For the avoidance of doubt, references to ''you'' in these terms and conditions shall be construed as references to the Investor.
In exceptional circumstances, the Company (acting through its agent or otherwise) may stop the payment of all or part of the Adviser Charges and the Company or its agent will endeavour to notify you as soon as possible of the action it has taken. These circumstances include the following:
You should let CGWL know as soon as possible if you change your Financial Intermediary. In such circumstances, the Company will continue to pay any outstanding Adviser Charges to your existing Financial Intermediary unless you advise CGWL otherwise. If you wish the Company to pay the Adviser Charges to a new Financial Intermediary, you will need to contact CGWL to obtain a new Application Form. CGWL will only accept one Application Form for each new Financial Intermediary. Any such Application Form will replace any existing Adviser Charges agreement which you have in place in relation to the Offer and the Company will no longer facilitate payment of the Adviser Charges to your previous Financial Intermediary. On a change of Financial Intermediary, CGWL and/or the Company may provide details of the Adviser Charges paid under the Application Form to your new Financial Intermediary to the extent required to enable your new Financial Intermediary to provide you with advice and services in connection with your Ordinary Shares and signing the Application Form is your consent to allow CGWL and/or the Company to do so. However, you may still be liable to pay the Adviser Charges to your previous Financial Intermediary under the terms of your agreement or arrangement with them.
CGWL may ask you to check the information that it provides to you and to bring any errors or omissions contained in such any information to its attention.
All instructions from you to pay the Adviser Charges will be treated as including any VAT where it is applicable at the rate prevailing at the time of the payment of the Adviser Charges and taking into account any changes to the rate of VAT howsoever occurring.
These Terms and Conditions of the Adviser Charges Agreement do not give any rights to any person other than you, the Company and CGWL. No other person (including any Financial Intermediary) shall have any right to rely on any of these terms and conditions.
The Company or its agent may amend or cancel these Terms and Conditions of the Adviser Charges Agreement if it has a valid reason for doing so, by giving you 30 days' notice in writing in advance.
These Terms and Conditions of the Adviser Charges Agreement will be governed by and interpreted in accordance with the laws of England and Wales. The courts of England and Wales will have exclusive jurisdiction over any dispute arising from these Terms and Conditions of the Adviser Charges Agreement.
Before completing this Application Form you should read the prospectus published by Hargreave Hale AIM VCT (the "Company") dated 2 September 2021 (the "Prospectus") (copies of which can be downloaded from www.hargreaveaimvcts.co.uk), in particular the Risk Factors, the Terms and Conditions of the Offer, the Guide to the Application Form and the Terms and Conditions of the Adviser Charges Agreement. Definitions used in the Prospectus apply herein, unless otherwise stated. The Company, the Investment Manager and the Receiving Agent cannot accept responsibility if any details provided by you are incorrect.
The Offer opens on 2 September 2021. The closing date for the Offer in respect of the 2021/22 tax year will be at 12.00 p.m. on 1 April 2022. If the Offer is not fully subscribed at that time, the Directors reserve the right to allow the Offer to remain open for at least part of the 2022/23 tax year, but not beyond 12.00 p.m. on 12 August 2022. Please send your completed Application Form together with your cheque or banker's draft, if appropriate, to Canaccord Genuity Wealth Limited, c/o Talisman House, Boardmans Way, Blackpool, FY4 5FY. If your subscription is being made by electronic payment please instruct payment before sending the completed Application Form. Applications submitted (in particular with a cheque) should allow at least three working days for funds to clear.
Please note that the number of Offer Shares to be allotted to a successful Investor will be determined by the Offer Price in respect of each allotment and the amounts applied for under the Offer by Investors. The Offer Price in respect of each allotment will be the last published NAV per Share prior to the date of the relevant allotment (adjusted as necessary for dividends declared but not yet paid if the allotment occurs whilst the existing Ordinary Shares are classified as ex-dividend) plus a premium of 3.5 per cent. to such last published NAV per Share. Details on how the Offer Price will be calculated, together with details relating to financial intermediary commission and facilitation of Adviser Charges, are set out in Part 3 of the Prospectus.
The Company will decide, in its absolute discretion, to accept or reject the Application (notification of which will be through the allotment of Offer Shares or the return of Application monies).
Existing Shareholder (Please tick if relevant) Shareholder reference(s)
To reduce the number of duplicate shareholder accounts we respectfully ask that existing shareholders match their personal details to those previously given to the Company, which can be found on existing share certificates.
| 1. PERSONAL DETAILS | |||
|---|---|---|---|
| Title (Mr/Mrs/Miss/Ms/Other): | Surname: | ||
| Forename(s) in full: | |||
| Date of Birth (DD-MM-YYYY): | Country/Place of Birth: | ||
| Nationality: | |||
| Permanent residential address: | |||
| Postcode: | Email: | ||
| Telephone (work): | Telephone (home): |
Please indicate ALL countries in which you are resident for tax purposes and the relevant Tax Identification Number or functional equivalent (for UK tax residents, this will be your National Insurance Number).
| Country/Countries of Tax Residency | Tax Identification Number (TIN)/ National Insurance Number |
No TIN |
|---|---|---|
| 1: | ||
| 2: | ||
| 3: | ||
| If you ticked the "No TIN" box, please explain below why you do not have a TIN | ||
I am a US citizen (as defined within the guide to the Application Form).
| You may choose to have your shares issued to you in certificated form (share certificates) or electronically (dematerialised) direct to your CREST nominee company: |
||||
|---|---|---|---|---|
| I would like to receive Share Certificate(s) registered in my name and sent to my permanent residential address set out in section 1 above. | ||||
| I would like my shares to be issued directly to my CREST nominee company (please complete the box below). | ||||
| CREST Member Account ID: | ||||
| CREST Participant ID: | ||||
| Participant Name: |
||||
| Participant Address: | ||||
| Participant Point of Contact: | ||||
| Participant Contact Telephone: | ||||
| Participant email address: |
| 4. SOURCE OF WEALTH | |||||
|---|---|---|---|---|---|
| Please tell us how you acquired the funds you plan to invest, select all that apply. | |||||
| Earned Ownership in a Inheritance Savings income company |
Pension Income | ||||
| Gifts Sale of property Investment proceeds |
Other | ||||
| If you have selected "Earned income", please state your occupation below. If you have selected "Pension income", please state your previous occupation below. |
|||||
If you have selected "Savings", please provide further details of how these savings were generated. |
|||||
If you have selected "Other", please provide further details below. |
|||||
| (In some cases, further information and documentary evidence may be required.) |
Please indicate below whether you have received advice from a financial intermediary in relation to your application for new Ordinary Shares.
I have not received any financial advice.
I have received financial advice (please complete section 6, if applicable, and ask your Financial Adviser to complete section 14).
Commission cannot be paid to your Financial Intermediary if you have received advice in relation to your application for Offer Shares. However, the Company can facilitate the payment of an Adviser Charge to your Financial Intermediary on your behalf. The Adviser Charge is treated separately to your investment in the Company and will not attract any tax relief and accordingly any applicable tax relief will only be available on the amount specified in section 7.
Please confirm below whether you require the VCT to facilitate the payment of an Adviser Charge.
I require the VCT to facilitate the payment of an Adviser Charge to my Financial Intermediary for the amount specified in the box below and acknowledge and agree that the Terms and Conditions of the Adviser Charge Agreement shall apply.
ADVISER CHARGE £
The minimum Subscription per Investor is £5,000, in aggregate across both tax years. Applications for less than £5,000 in aggregate will not be accepted.
I hereby offer to subscribe the following amount(s) in pounds sterling for Offer Shares at the relevant Offer Price on the Terms and Conditions of the Offer as set out in the Prospectus and subject to the Articles of Association of the Company:
| 2021/22 tax year | £ |
|---|---|
| 2022/23 tax year | £ |
| TOTAL INVESTMENT | £ |
The total amount payable is the combined value of your investment in the Company (section 7) and (if applicable) any Adviser Charge that you require the VCT to facilitate on your behalf (section 6).
TOTAL AMOUNT PAYABLE ('Adviser Charge' in section 6 plus 'Total Investment' in section 7) £
Please indicate below your chosen method of payment.
I enclose a cheque or banker's draft(s), which I have referenced using my surname and initials on the back of the cheque, drawn on a UK clearing bank for the amount specified in section 8 made payable to "HH VCT Offer Account". Cheques must be drawn on the personal account of the individual Investor. Building Society cheques and banker's drafts will only be accepted where embossed as stamped with the name of the account holder and drawn from the account of the individual Investor.
I have instructed my bank to make an electronic payment for the amount specified in section 8 quoting my surname and initials as a reference. Electronic payments should be made to the following account:
| Account Name: | HH VCT Offer Account |
|---|---|
| Sort Code: | 83-07-06 |
| Account Number: | 10565882 |
| Bank: | Royal Bank of Scotland |
In order to allow CGWL to reconcile the electronic payment to your Application Form, please provide the following details in relation to the bank account from which funds are transferred:
| Account Name: | |
|---|---|
| Account Number: | |
| Sort Code: | |
| Bank/Building Society: |
Electronic payments will only be accepted from the personal account of the individual Investor and where the details of the bank transfer match the details provided above. Payments form third party accounts will not be accepted.
Electronic payments and cheques will only be accepted from a UK bank or building society which is either a member of the Cheque and Credit Clearing Company Limited or the CHAPS Clearing Company Limited or which has arranged for its cheques or bankers' drafts to be cleared through the facilities provided by members of either of these companies.
Electronic identity checks will be carried out on all Investors, regardless of the size of the consideration or payment method.
| 10. DIVIDEND PAYMENTS (MANDATORY unless you elect to participate in the Dividend Reinvestment Scheme or have requested that your Offer Shares be issued to a nominee) |
||||
|---|---|---|---|---|
| You can elect to have your dividends paid by cheque or transferred directly to your bank or building society accounts. Dividends paid directly to your account will be paid in cleared funds on the dividend payment dates. Your bank or building society statement will identify details of the dividend as well as the dates and amounts paid. |
||||
| Please do not complete this section 10 if you if you have elected to participate in the Dividend Reinvestment Scheme by completing a DRIS Mandate Form. |
||||
| Please note that dividends payable on shares registered to your CREST nominee company will be sent to your CREST nominee company. |
||||
| The Company and the Registrar 'Equiniti' cannot accept responsibility if any details provided by you are incorrect. | ||||
| I would like to receive all dividend payments by cheque, sent to my home address. | ||||
| I would like all dividend payments to be made by bank transfer to the bank or building society account detailed in section 9. | ||||
| I would like all dividend payments to be made by bank transfer to the bank or building society account detailed below. | ||||
| NOTE: The stated account must be in your own name. | ||||
| Account Name: |
||||
| Account Number: |
||||
| Sort Code: |
||||
| Bank/Building Society: |
||||
| If you are an existing participant in the Dividend Reinvestment Scheme and wish to withdraw from the scheme and receive future dividends in cash, please tick this box. Please ensure you have completed this section 10 in full and do not complete a |
DRIS Mandate Form.
Please indicate below how you would like to be contacted by the Company. You can withdraw your consent at any time.
I would like to receive information about Hargreave Hale AIM VCT plc shareholder events, offer updates and other related marketing communications by email.
I would like to receive monthly factsheets and interim management statements by email.
The Company would like to communicate with you electronically in respect of your shareholding in Hargreave Hale AIM VCT plc. This means you will receive notifications by email (where you have selected Option 2 below and provided an email address by registering at www.shareview.co.uk) that information and/or documents published by the Company are available on the Company's website. If no email address is provided and Option 1 is selected below, then the Company will make notifications by way of letter.
Option 1: Please confirm your agreement to the Company sending notifications to you by letter that information and/or documents have been published by the Company on its website. This is the default option if you do not select any of the Options set out in this section 11.
Option 2: Please confirm your agreement to the Company sending notifications to you by email that information and/or documents have been published by the Company on its website to the email address notified through registration at www.shareview.co.uk (and please ensure you register at www.shareview.co.uk).
Option 3: If you would prefer to receive hard copies of Company documents by post, please tick this box.
You have the right to opt out of electronic communications at any time and to revert to hard copies delivered by post by emailing [email protected] or by writing to Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA. For those shareholders already registered on Shareview, there is no need to take any action if you do not wish to change your communication preferences.
In relation to my Financial Intermediary (section 14), I authorise the Company to:
acknowledge receipt of my Application Form; and
provide Shareholder Information concerning this investment and any prior investments in the Company.
These authorities shall remain in effect until I revoke such authorities by informing the Company in writing. I understand that my Financial Intermediary will be unable to instruct any register changes on my behalf.
| 6. | I am legally allowed to sign on behalf of the above-named holder. (If signing as Power of Attorney, please submit a copy.) | |||
|---|---|---|---|---|
| ---- | -- | -- | -- | ---------------------------------------------------------------------------------------------------------------------------- |
Signature: Date:
| 14A. CONTACT DETAILS | |||||
|---|---|---|---|---|---|
| Name of Firm: | FCA Number: | ||||
| Name of Adviser: | Address/Stamp: | ||||
| Email: | |||||
| Telephone: |
Please select one of the following to confirm whether you provided the Investor with financial advice in relation to this application.
We did not give any financial advice to the Investor (please proceed to section 14C).
We gave financial advice to the Investor (please proceed to section 14E).
You may only receive commission if you have confirmed (through section 14B) that you have not given any financial advice to the Investor in relation to this application or otherwise. You may elect to receive 1 per cent. introductory commission and no trail commission or 0.5 per cent. introductory commission plus trail commission of 0.375 per cent. of the amount subscribed by the Investor per annum (limited to five years).
I would like to receive introductory commission of 1 per cent.
I would like to receive introductory commission of 0.5 per cent. plus trail commission of 0.375 per cent. of the amount subscribed by the Investor per annum (limited to five years).
| 14D. COMMISSION REBATE | |||||||
|---|---|---|---|---|---|---|---|
| You may elect to rebate some or all of your introductory commission to your client through the issue of additional new Ordinary Shares. Unless you indicate otherwise below, we will pay your introductory commission in full. Please select from one of the below boxes. |
|||||||
| I wish to rebate | 0% | 25% | 50% | 75% | 100% | of the introductory commission to the Investor. |
Commission or Adviser Charges will be paid to your bank or building society account via BACS. Please provide your bank details to enable us to make payment. Alternatively, if you wish to receive a cheque please tick the box.
| Name of Bank/Building Society: | |
|---|---|
| Title of Branch: | |
| Account Name: | |
| Account Number: | |
| Sort Code: |
The Company and the Administrator cannot accept responsibility if any details provided by you are incorrect.
Please send all payments by cheque to the address listed in section 14A.
Signature: Date:
THIS PAGE INTENTIONALLY LEFT BLANK
If you are in any doubt as to the action you should take in relation to this Mandate Form, you should consult an appropriate independent financial adviser authorised under the Financial Services and Markets Act 2000 before completing this Mandate Form. The attention of DRIS participants and those Shareholders who are considering participating in the DRIS is drawn to the risk factors available at https://www.hargreaveaimvcts.co.uk/. Shareholders should take advice from an independent financial adviser as to whether to take up additional Ordinary Shares in the Company in this way. Shareholders who are in any doubt as to their eligibility for VCT tax reliefs should consult their professional advisers. Nothing in this document should be regarded as a recommendation to buy or hold Ordinary Shares.
If you wish to apply to join the Dividend Reinvestment Scheme, this Mandate Form should be completed in full and returned to Equiniti Limited, Aspect House, Spencer Road, Lancing BN99 6DA. Before completing this Mandate Form you should read the DRIS Terms and Conditions and the Risk Factors as modified from time to time available at https://www.hargreaveaimvcts.co.uk/. If you have any queries in connection with the DRIS please contact the DRIS Manager on 0207 523 4837. Unless otherwise defined, terms defined in the DRIS Terms and Conditions available on the Company's website have the same meaning in this DRIS Mandate Form.
Where Ordinary Shares are registered in the name of a Nominee Shareholder, the Nominee Shareholder should complete the section 1 "Shareholder Details" of this Mandate Form and the Nominee Shareholder and the Beneficial Shareholder should both complete section 2 "Nominee Shareholder" of this Mandate Form, confirming that the dividends attributable to such Beneficial Shareholder shall be applied towards participation in the DRIS and indicate in whose name the new Ordinary Shares should be registered. This process is intended to record that the Beneficial Shareholder is authorising the Nominee Shareholder to subscribe for new Ordinary Shares to be held in the Nominee Shareholder's name whilst still enabling the Beneficial Shareholder to obtain income tax relief on the subscription for new Ordinary Shares.
Please tick the following box if you wish to apply to join the DRIS.
I, the undersigned, being the registered holder from time to time of Ordinary Shares in Hargreave Hale AIM VCT plc, elect to receive ALL FUTURE DIVIDENDS including all annual dividends and special dividends (if any) in respect of which the DRIS is available in the form of new Ordinary Shares.
In respect of the above election, if you wish to make a mandate to receive new Ordinary Shares (which will be in respect of the full number of Ordinary Shares in your holding) please tick the Box above and complete the information required below.
| Section 1 Shareholder Details | |||||
|---|---|---|---|---|---|
| Shareholder reference number(for existing investors shown on share certificate and dividend stationery) |
|||||
| First Name: | Surname: | ||||
| Date of Birth: | National Insurance no: | ||||
| Address: | |||||
| Daytime phone number (for queries only): | Postcode: | ||||
| Signature: | Date: |
| In the case of a corporation, this Mandate Form should be executed under the common seal (or otherwise executed as a deed) or be signed by a duly authorised official whose capacity should be stated. All enquiries regarding this Mandate Form should be addressed to Equiniti Limited, Aspect House, Spencer Road, Lancing BN99 6DA. Telephone number 0371 384 2714 (+44 121 415 7047 from overseas). Lines open Monday to Friday, 8:30am to 5:30 pm (excluding public holidays in England and Wales). Section 2 Nominee Shareholder |
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|---|---|---|---|---|---|---|---|
| Please note that this section 2 should only be completed where Ordinary Shares are registered in the name of a Nominee Shareholder. If the Ordinary Shares are held in the name of the Beneficial Shareholder then only section 1 of the Mandate Form should be completed. |
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| To be completed by the Beneficial Shareholder | |||||||
| I confirm that the dividends attributable to my entire holding of Ordinary Shares shall be applied towards subscription for new Ordinary Shares in accordance with the terms and conditions of the DRIS as modified from time to time. |
|||||||
| First Name: | Surname: | ||||||
| Date of Birth: | National Insurance no: | ||||||
| Address: | |||||||
| Postcode: | |||||||
| Signature: | Date: | ||||||
| Tick box if Ordinary Shares are to be issued in your name (otherwise they will be issued to the Nominee Shareholder identified below |
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| To be completed by the Nominee Shareholder | |||||||
| Name of Nominee Shareholder appearing on register |
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| Address: | |||||||
| Postcode: | |||||||
| Authorised Signature: | Date: | ||||||
under the companies act 1985 with registered number 05206425)
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