Prospectus • Jan 3, 2019
Prospectus
Open in ViewerOpens in native device viewer
Offers for subscription in the 2018/19 tax year to raise a total of £20 million Offer Document
If you are in any doubt about the content of this offer document ("Offer Document") for Northern Venture Trust PLC, Northern 2 VCT PLC and Northern 3 VCT PLC (the "Companies") and/or any action that you should take, you should seek advice immediately from an independent financial adviser authorised under the Financial Services and Markets Act 2000 ("FSMA") who specialises in advising on opportunities of this type.
This Offer Document constitutes a financial promotion pursuant to Section 21 of the FSMA and has been approved, for the purposes of that section only, by Howard Kennedy Corporate Services LLP ("HKCS"), of No 1 London Bridge, London SE1 9BG, which is authorised and regulated by the Financial Conduct Authority in the United Kingdom (firm reference number 523524).
This document does not constitute a prospectus, as defined in the glossary of the FCA Handbook, and has not been prepared in accordance with the requirements of the FSMA, the Prospectus Regulation or the Prospectus Rules. HKCS does not offer investment or tax advice or make recommendations regarding investments. HKCS is acting for the Companies and no one else in connection with the Offers, and will not be responsible to anyone other than the Companies for providing the protections afforded to customers of HKCS (other than as required by the FCA rules) or for providing financial advice in relation to the Offers. HKCS has given and not withdrawn its consent to the inclusion of its name in the form and context in which it appears.
No person has been authorised to give any information, or to make any representation, concerning the Offers other than the information contained in this Offer Document and the Application Form and, if given or made, such information or representation must not be relied upon.
This Offer Document does not constitute a direct offer to sell or a solicitation of an offer to purchase securities and, in particular, does not constitute an offering in any state, country or other jurisdiction where, or to any person or entity to whom, an offer or sale would be prohibited.
Nothing in this Offer Document constitutes investment, tax, legal or other advice by the Companies, NVM Private Equity LLP ("NVM") or HKCS.
All statements of opinion or belief contained in this Offer Document and all views expressed and statements made regarding future events represent NVM's own assessment and interpretation of information available to it as at the date of this Offer Document.
No representation is made or assurances given that such statements or views are correct or that the objectives of the Offers will be achieved. Investors must determine for themselves what reliance (if any) they should place on such statements or views and no responsibility is accepted by NVM in respect thereof. All information contained in this Offer Document has been sourced by NVM unless otherwise stated.
We would like to take the opportunity to remind you that VCT investments are high risk and an investment in Offer Shares will not be appropriate for all recipients of this Offer Document. Your attention is drawn to the risk factors, as set out on page 2 of this Offer Document. An investment in any one or more of the Companies is only suitable for Investors who are capable of evaluating the risks and merits of such investment and who have sufficient resources to bear any loss that might arise. Please also remember that the value of an investment may go down as well as up. There is no guarantee that the Companies' investment objectives will be met and you may not get back the full amount invested. The levels and bases of reliefs from taxation described in this document are those currently available, their value depends on an Investor's individual circumstances. Tax rules and regulations are subject to change.
If you have any questions, please call the NVM investor helpline on 0191 244 6024. NVM cannot provide any investment advice.
For UK investors only. Information correct as at 3 January 2019.
1 Welcome
The risks of investing
2
3 Our investment approach
4 The investment opportunity
5 Track record
8
Venture portfolio
6 Top 10 investments
9
Recent exits
7 Mature portfolio
10
Recent investments
13
Key members of our VCT investment team
18 Additional information
20 Appendix 2 Taxation
11 Dividend and share buy-back policies
15
Charges
12 Attractive tax benefits
16 Offer pricing
19 What to do next
24 Appendix 3 Definitions
20
Appendix 1 Corporate objective and investment policy
Appendix 4 Terms and conditions of the offers
This is an opportunity for investors seeking a tax-free return in the medium to long term with the benefit of attractive VCT tax reliefs.
The Companies are seeking to raise up to £19.8 million, with £6.6 million available for subscription in each Northern VCT: Northern Venture Trust, Northern 2 VCT and Northern 3 VCT.
This new offering will build on NVM's 23-year track record of managing VCTs and its strong investment pipeline, while providing scale-up funding and follow-on investment for smaller UK businesses with growth potential.
The Offers have been designed for Investors seeking a longterm tax-free return through a combination of dividend yield and capital growth, with the added benefit of VCT Tax Reliefs.
This Offer Document aims to give you an overview of the Companies and NVM and of our investment strategy. We'll briefly explore examples of the investments, dividend returns and key benefits of the Offers. This document also contains important information on the charges and key risks associated with investing in the Companies.
Offer size: £6.6 million in each of Northern Venture Trust, Northern 2 VCT and Northern 3 VCT
Minimum individual investment: £6,000 in total (minimum £2,000 in any one Company if you are splitting your application across the Offers)
Dividend policy: The Companies each have a medium term aim to generate a return on ordinary activities sufficient to support their target annual dividend yield, whilst avoiding as far as possible erosion of the NAV per share. Future dividend distributions will have regard to the level of returns generated by each Company, the availability of distributable reserves and ongoing compliance with the VCT rules.
Northern Venture Trust – 5% per annum of NAV Northern 2 VCT – 5% per annum of NAV Northern 3 VCT – 4% per annum of NAV
*the target dividend yields are subject to regular review and are not guaranteed
Further information, including the Key Information Document and Annual Report for each Company, is available at www.nvm.co.uk. Should you need anything else, please call the NVM helpline on 0191 244 6024. NVM cannot provide you with any investment advice.
Although it is normal for equity investments to carry risk, it is important you know what the risks are so you can make an informed decision. Please note that VCT investments are high risk.
Prospective Investors should carefully consider the risk factors listed below in addition to the other information presented in this document. If any of the risks described below were to materialise, they could have a material effect on the respective businesses, financial condition, results or operations of any of the Companies. The risks and uncertainties described below are not the only ones that the Companies or Investors may face. Additional risks which are not currently known to the Companies or the Boards, or that the Companies or the Boards currently believe are not material, may also adversely affect the respective business, financial condition and results or operations of the Companies. The value of the Offer Shares could decline due to any of these risk factors. Investors who are in any doubt as to the action that they should take are advised to obtain advice from an Intermediary who specialises in advising on the acquisition of shares.
The value of the Shares and income derived from them can fluctuate. There is no guarantee Investors will get back the amount invested. Investors could lose all or part of their investment.
Investors should be prepared to hold their shares for a minimum of five years.
Investments in smaller unquoted companies, such as those in which the Companies will invest, involves a higher degree of risk than investment in larger listed companies, because they generally have limited product lines, markets and financial resources and may be more dependent on their management teams or key individuals. The securities of smaller companies in which the Companies invest are typically unlisted and illiquid, which may cause difficulties in valuing and disposing of such securities. The Companies may invest in companies whose shares are quoted on AIM – the fact that a share is quoted on AIM does not mean that it can be readily traded and the spread between the buying and selling prices of such shares may be wide.
The tax rules, or their interpretation, in relation to an investment in the Companies and/or the rates of tax may change during the life of the Companies. Changes may apply retrospectively, which could affect tax reliefs obtained by Investors and the VCT status of the Companies. If an Investor disposes of his or her Offer Shares within five years of issue, he or she will be subject to clawback by HMRC of any income tax reliefs originally claimed.
There can be no guarantee that the Companies will retain their status as VCTs. The loss of this status could lead to adverse tax consequences for Investors, including a requirement to repay the 30% initial income tax relief.
Although the Companies' Offer Shares are traded on the London Stock Exchange, there may not be a liquid market in the Offer Shares and Investors may find it difficult to sell them. In addition, the price at which Shares are traded may not reflect their underlying net asset value and Shares are usually traded at a discount to their underlying NAV.
There can be no assurances that the Companies will meet their objectives or identify suitable investment opportunities. The past performance of the Companies and other funds managed or advised by NVM is not a guide to future performance.
The Companies' ability to obtain maximum value from their investments may be limited by the VCT rules. Changes in the VCT rules may be applied retrospectively and may reduce the level of returns for Investors. A number of investment restrictions came into force in 2015, which focus investment on funding growth and development in companies that have been trading for seven years or less in a VCT-qualifying trade. In addition, the maximum lifetime amount a company can receive from VCTs has been restricted to £12 million (£20 million for a knowledge-intensive company).
The investments the Companies will make in quoted investments will be subject to normal market fluctuations and other risks inherent in investing in securities.
The VCTs are investing in young businesses requiring growth and development capital, largely in equity shares. Future returns will, therefore, be more dependent on outright exits and future dividends may be subject to fluctuations.
Investment in the Companies may expose Investors to additional risks associated with the UK's decision to leave the European Union ("Brexit"). The effect and timing of Brexit is uncertain, and Brexit has and may continue to contribute adversely to: the ability for young businesses to grow; the availability of new investment opportunities to the Companies; volatility in the valuation and prices of securities of companies located in the UK, particularly where they are exposed to or reliant on trading partners in the EU; and currency exchange rates, including the valuation of the Euro and British pound, in particular.
Founded in 1988, NVM is one of the longest-established venture capital trust managers focused on investing in small and medium sized enterprises (SMEs).
Since 1995, the three Northern VCTs managed by NVM have invested £350 million in 153 unquoted companies, ranging from start-ups and growth capital deals to management buy-outs.
The VCT Rules focuses investment activity on providing development capital for earlier stage businesses. We are committed to building a portfolio of investments in innovative UK smaller companies with significant growth potential across a diverse range of sectors. These investments will generally be structured with a view to achieving capital growth rather than income generation, and the timing and quantum of potential capital gains from realisations may be less predictable than from investments in more mature businesses. NVM has a long track record of earlier stage investment and our intention is to develop a portfolio capable of providing high tax-free returns in the long term through a combination of capital growth and investment income.
Our in-house venture capital experience and knowledge is supplemented on each investment by due diligence services provided by a range of specialist third party experts.
Our team of investment professionals operate from a network of five regional offices, where our long-standing local knowledge and relationships give us the best possible access to new investment opportunities.
Strategy: investing primarily in smaller, unquoted UK businesses that meet our key criteria of good value, growth potential, strong management and the ability to generate cash in the medium to long term. We will focus on earlier stage and development capital opportunities and expect to hold each investment for a period of three to ten years.
Diversification: seeking opportunities in a broad range of VCT-qualifying sectors, including manufacturing, services, healthcare, technology or technology-enabled businesses. Our intention is that the portfolio will include companies at different stages of maturity and profitability.
NVM is an experienced investor in smaller growth companies and will deploy the funds raised under the Offers in a diverse portfolio of VCT qualifying holdings.
Over the last 23 years over £425 million has been invested by Northern VCTs in over 240 companies (both unquoted and quoted on AIM), providing total returns (NAV plus cumulative dividends) since inception of between 180p and 235p per share in the three Northern VCTs (as at 30 September 2018). The Northern VCTs have combined net assets of £264 million and a portfolio of 42 unquoted companies.
The Northern VCTs have a growing pipeline of opportunities. With access to additional capital, we are confident that we can identify attractive companies with growth potential and support them through to realisation. The UK is an excellent environment in which to develop and scale high-growth companies.
Under a co‐investment scheme introduced in 2006, NVM executives are required to invest personally alongside the Northern VCTs in each VCT‐qualifying investment on a predetermined basis.
Our VCT directors have extensive experience in private equity and corporate finance, enabling them to both provide robust corporate governance and act as sounding boards.
The NVM team has a track record of identifying opportunities to support the growth of young companies over long investment periods, providing professional guidance and achieving profitable realisations.
At 31 December 2018 the three Northern VCTs held 42 unquoted companies with an aggregate value of £149 million*. There were 22 qualifying unquoted investments made under the post-November 2015 VCT Rules, valued at £68 million*. There were 20 unquoted investments made prior to 2015, predominantly in management buy-outs, with an aggregate value of £81 million*. The structure of the pre-November 2015 investments currently supports dividends and interest income, as well as the potential for capital gains on disposal.
The Directors hold in aggregate over 2.6 million shares in the Companies, demonstrating their confidence in the potential of the investment portfolios to deliver attractive shareholder returns in the long term.
The three Northern VCTs have combined net assets of £264 million and a portfolio of 42 unquoted companies.
* Based on valuations as at 30 September 2018 adjusted for subsequent disposals during 2018 and subsequent new investments (at cost) during 2018.
| Year ended 30 September: | 2018 | 2017 | 2016 |
|---|---|---|---|
| Dividends per Share in respect of the year* | 4.0p | 11.0p | 13.0p |
| Cumulative dividends per Share paid since inception** | 164.5p | 159.5p | 148.5p |
| NAV per Share | 70.8p | 72.6p | 80.0p |
| Total return per Share | 235.3p | 232.1p | 228.5p |
| Year ended 31 March: | 2018 | 2017 | 2016 |
|---|---|---|---|
| Dividends per Share in respect of the year* | 5.5p | 10.5p | 10.5p |
| Cumulative dividends per Share paid since inception** | 111.9p | 101.4p | 90.9p |
| NAV per Share | 66.9p | 76.6p | 77.9p |
| Total return per Share | 178.8p | 178.0p | 168.8p |
| Year ended 31 March: | 2018 | 2017 | 2016 |
|---|---|---|---|
| Dividends per Share in respect of the year* | 5.5p | 10.5p | 10.5p |
| Cumulative dividends per Share paid since inception** | 85.9p | 75.4p | 64.9p |
| NAV per Share | 94.0p | 106.2p | 102.2p |
| Total return per Share | 179.9p | 181.6p | 167.1p |
* Note: Special dividends of between 5p and 7p per Share were paid by each of the Northern VCTs in 2016 and 2017.
** Excluding dividends declared but not yet paid at the balance sheet date.
As at 30 September 2018
| Company | Activity | Year of original investment |
Valuation* £000 |
% of net assets by value |
|---|---|---|---|---|
| No.1 Lounges | Operator of airport lounges and related services |
2014 | 9,207 | 3.5% |
| Agilitas IT Holdings | Provider of outsourced IT inventory management services |
2014 | 9,061 | 3.4% |
| Lineup Systems | Multi-channel advertising and media software |
2011 | 8,730 | 3.3% |
| Sorted Holdings | Delivery management software platform serving the e-commerce market |
2016 | 8,706 | 3.3% |
| MSQ Partners Group | Marketing and communications agency group |
2014 | 8,360 | 3.2% |
| CloserStill Group** | Promoter of international business-to-business events |
2008 | 7,315 | 2.8% |
| Entertainment Magpie Group | Re-commerce website for pre-owned entertainment media and electronic items |
2015 | 5,568 | 2.1% |
| Biological Preparations Group | Developer and supplier of products based on microbial, antimicrobial, plant extract and enzyme technology |
2015 | 5,181 | 2.0% |
| It's All Good | Manufacturer of premium savoury snack products |
2014 | 4,805 | 1.8% |
| Volumatic Holdings | Manufacturer of intelligent cash handling equipment |
2012 | 4,770 | 1.8% |
*Based on aggregate amounts invested by the three Northern VCTs. All of the Northern VCTs are invested in each of the companies listed above. **Subsequently exited in December 2018
The infographic below highlights some of the statistics concerning the Northern VCTs' portfolio of more mature investments, acquired prior to November 2015.
Information and valuations as at 30 September 2018 adjusted for any subsequent disposals during 2018.
* Total capital and income returns over the investment lifetime for investments exited in each calendar year.
** Includes unquoted investments and investments quoted on AIM.
The infographic below highlights some of the statistics concerning the Northern VCTs' portfolio of more recent venture capital investments, all made since November 2015.
All information and valuations as at 30 September 2018 adjusted for subsequent additions to the portfolio (at cost) during 2018.
In 2018 the Northern VCTs sold their investments in five unquoted portfolio companies, generating aggregate returns over the life of the investments of £44 million.
Love Saving Group is a businessto-business energy cost savings specialist. Northern VCTs originally backed the management team to buy the business in 2015 with an investment of £3.3 million. After a period of rapid expansion the business was sold to Lloyds Development Capital (LDC) in August 2018, delivering a return of over 3.5x the original cost over its lifetime. The opportunity was taken to re-invest a portion of the sale proceeds in the newly acquired business alongside LDC.
Wear Inns is a North East based operator of managed community pubs. Northern VCTs backed the founders in 2006 with funding of £1 million to establish the group. As the estate expanded, additional rounds of funding were invested in order to acquire new targets, taking Northern VCTs' total investment to £4.9 million. The business was sold in August 2018 to Aprirose, a specialist investment fund, delivering a return of over 2.0x the original cost over the life of the investment.
CGI is a leading manufacturer of fire resistant glass products. Northern Venture Trust originally backed the business in 1999 with funding of £1 million. Since that time the business has continued to grow and Northern Venture Trust has supported it through several rounds of refinancing, electing to reinvest a portion of the proceeds at each opportunity. The remaining holding was sold in September 2018 with the total return over the life of the investment representing around 6.5x the original cost (excluding reinvested proceeds).
S&P Coil Products is a specialist manufacturer of heating and ventilation products. Northern VCTs originally backed an MBO of the business from a listed corporate in 2004, as it pursued expansion from a UK manufacturing base into the Middle East. In February 2018, the business was sold through an MBO to its management team delivering a return of 2.1x the original investment cost over its lifetime.
CloserStill Group is a market leading exhibition organiser running well known events. Northern VCTs first backed the business in 2008, investing £2.7 million, and have participated in two subsequent management buy-outs of the business, each time reinvesting a portion of the sales proceeds. The final remaining holding was sold in a buy-out transaction to Providence Equity in December 2018, delivering a return of over 2.0x money on the most recent investment cost. The original investment in 2008 has delivered 7.8x cost in aggregate over its entire lifetime.
Note: The returns on this page are calculated by reference to total returns from each investment over its lifetime, including income and capital proceeds.
Set out below are details of some recent investments made by the Companies that demonstrate the type of investments we will be seeking to make using the funds raised in these Offers.
Sector: Cloud based health & safety software
Investment: £3.0 million In February 2018 the Northern VCTs invested £3 million in East Kilbride based SHE Software. SHE Software's Assure platform helps businesses to meet health and safety compliance requirements effectively and economically. Over recent years the company has benefited from support from Scaleup Group and is now poised for international expansion. The investment will support entry into the US market, increase the size of the development team and create new high quality jobs in Scotland.
Sector: Medical devices developer Investment: £1.0 million In April 2018 the Northern VCTs invested £1 million in Cambridge based medical device company Ablatus Therapeutics, alongside angel investors. Ablatus is a spin out from the NHS under the guidance of Health Enterprise East to commercialise patented Bimodal Electric Tissue Ablation (BETA) technology. The technology was originally developed by clinicians at Norwich University NHS Foundation Trust, who have identified a novel way to address the side effects of radio frequency ablation (a method which is used to treat tumours). The investment is intended to support the company through the next stage of commercialisation, including ongoing product development.
Sector: Automated legal document preparation
Investment: £3.1 million In June 2018 the Northern VCTs invested £3.1 million in Midlands based Clarilis, a high growth software company focused on providing legal drafting automation solutions. Law firms are under increasing pressure to improve productivity and document automation is at the heart of this. The company's software has already been adopted by a number of top 50 UK law firms who are benefitting from Clarilis's innovative technology to retain market share and profitability. The investment by the Northern VCTs will help the company to continue on its growth trajectory and enter the in-house commercial sector.
Sector: Home use beauty device marketplace
Investment: £4.0 million In March 2018 NVM led a £5 million investment round in which the Northern VCTs invested £4 million in Manchester based e-commerce retailer Current Body. The company has one of the only websites focused solely on beauty devices for home use. Over the last year they have experienced exciting growth and rank highly in the 2018 Northern Tech 100. The investment will support the next phase of expansion to increase the company's global customer reach.
Sector: Drug development testing services
Investment: £1.5 million In June 2018 the Northern VCTs invested £1.5 million in Newcastle based Newcells. Newcells is a successful, early stage, life sciences spin out from Newcastle University which is leading the way in the development of human induced pluripotent stem cells for efficacy and toxicity testing in the drug development sector. The investment will be used to support expansion of the team and the development of new assays (test cells) replicating human organs for the purpose of drug product development by multinational pharmaceutical companies.
Sector: Indoor climbing wall facility operator
Investment: £3.0 million In August 2018 the Northern VCTs invested £3 million in Climbing Hangar, which is a leading recreational indoor climbing business based in Liverpool. Indoor climbing is a growing sport that blends socialising with fitness. The company has an established reputation for providing superior facilities at an affordable cost. The company already has sites in Plymouth and London and building on that experience and the skill sets in the company, our investment is intended to fund the roll-out in provincial cities across the UK.
The Companies each have a medium term aim to generate a return on ordinary activities sufficient to support their target annual dividend yield, whilst avoiding as far as possible erosion of the NAV per Share. The level of future dividend distributions is not guaranteed and will have regard to the level of returns generated by each Company, the availability of distributable reserves and ongoing compliance with the VCT Rules. Investors will be eligible for the next dividend payments announced after their Offer Shares have been allotted, which are expected to be paid in June 2019 in respect of Northern Venture Trust and July 2019 in respect of Northern 2 VCT and Northern 3 VCT. The Companies all intend to pay dividends bi-annually, usually in June and December in respect of Northern Venture Trust and January and July in respect of Northern 2 VCT and Northern 3 VCT.
Set out below is a table illustrating the current income yields to Investors assuming that the dividend yield target is met in each case.
The Companies have established dividend investment schemes under which Shareholders are given the opportunity to reinvest dividend payments by way of subscription for new Shares, with the benefit of the tax reliefs currently available to VCT subscribers. The terms for participation in those schemes are available from the NVM website (www.nvm.co.uk/investors).
We understand that, from time to time, Shareholders may wish to sell some of their Shares to assist with personal and financial estate planning. The Companies wish to ensure that there is liquidity in their Shares and, accordingly, each Company intends to continue pursuing an active Share buy-back policy. Each Company has a policy of regularly buying back Shares in the market, currently at a discount of around 5% to the latest published NAV (subject to regular review, VCT regulations and guidance, shareholder approval, market conditions at the time and the relevant Company having both cash resources and distributable reserves available for the purpose).
| Illustrative Annual Yield per Offer Share (After 30% Income Tax Relief) | ||||||
|---|---|---|---|---|---|---|
| Company | NAV at 30 September 2018 |
Target yield on NAV1 |
Illustrative offer price after tax relief2 |
Equivalent tax-free yield |
Higher-rate tax payer |
Gross equivalent yield3 Additional rate tax payer |
| Northern Venture Trust | 70.8p | 5% | 50.6p | 7.0% | 10.4% | 11.3% |
| Northern 2 VCT | 64.9p | 5% | 46.4p | 7.0% | 10.4% | 11.3% |
| Northern 3 VCT | 94.6p | 4% | 67.6p | 5.6% | 8.3% | 9.0% |
1 The target dividend yields are expressed as a percentage of NAV per annum, are not guaranteed and are subject to regular review by the Directors of each Company.
2 The returns listed are based on an illustrative Offer price of 72.2p for Northern Venture Trust, 66.2p for Northern 2 VCT and 96.5p for Northern 3 VCT, multiplied by 70%, to reflect initial income tax relief of 30%. Investors should note that they will be required to pay the full Offer price and claim the income tax relief separately. The Offer price may differ as it depends on the level of Promoter's Fee payable and will be based on the most recently published NAV per share at the point of allotment.
3 The gross equivalent yield is the yield on a non-VCT UK dividend subject to income tax that would result in a net yield of 7.0% for Northern Venture Trust, 7.0% for Northern 2 VCT and 5.6% for Northern 3 VCT, assuming a higher rate taxpayer and an additional rate taxpayer respectively with at least £2,000 of other dividend income.
4 The above table is an illustration of yields, and no forecast or projection is implied or inferred.
Listed below are the main VCT tax reliefs available under the Offers on a maximum investment of £200,000 per individual per tax year.
This is conditional upon you holding your VCT shares for at least five years and not having sold any shares in the Company for six months before or after the issue of the new Shares. Relief is restricted to the amount which reduces your income tax liability to nil.
Dividends and capital distributions from a VCT are tax-free.
• Capital gains tax exemption on any gains arising on the disposal of VCT shares.
In the example opposite the effect of any Adviser Charges has been ignored (see page 15 for information on Adviser Charges). You should note that because you are required to hold the Shares for at least five years in order to retain income tax relief on your investment, this initial uplift cannot be immediately realised.
This is only a very brief summary of the UK tax position for investors in VCTs, based on the Companies' and NVM's understanding of current law and practice. Investors are recommended to consult their own appropriate professional advisers before investing in the Offers and remember that the availability of the VCT tax reliefs is subject to personal circumstances and relies on the relevant Company maintaining its VCT qualifying status. Please refer to the HM Revenue & Customs website for further guidance on VCT tax reliefs.
To help you understand the benefits of investing in a VCT, here is an example which shows the effect of the initial 30% income tax relief (based on a notional investment of £10,000):
| Your gross investment: | £10,000 |
|---|---|
| 30% income tax relief: | £(3,000) |
| Your net investment: | £7,000 |
| Assumed issue costs of 2.0%: | £(200) |
| Initial value of holding: | £9,800 |
| Initial uplift on the net investment (£): |
+£2,800 |
| Initial uplift on the net investment (%): |
+40% |
VCT investments are sourced by the wider NVM investment team, including individuals focussed on both venture capital and private equity investing. Key members of the VCT investment team are as follows:
Tim co-founded NVM in 1988 and was chief investment officer until 2008. During this period NVM built a mixed portfolio including early stage investments such as DxS and Alaric Systems. After 20 years leading the investment team he became chairman of NVM in 2008, taking responsibility for corporate strategy and investor relations. Since 2015 he has led the VCT investment team's re-focus on early stage investment. He is a nonexecutive director of Northern Venture Trust and Northern 3 VCT and a member of the Venture Capital Trust Association and of the BVCA's Venture Capital Committee. He is a director of Channel Mum, Clarilis, Gentronix, Intuitive and Newcells Biotech.
Birmingham. He became a director responsible for 3i's investment activity across the Midlands before leaving in 2001 to join Montagu Capital as a founding director. He joined NVM in 2004 and became managing director in 2008. He has over 20 years' experience in private equity and is NVM's chief investment officer. He is a director of No. 1 Lounges.
Charles joined NVM in 2016, having over 12 years' experience in venture investing having been a director of IP Group, where he ran the fund management subsidiary. Whilst at IP Group, he was intensively involved from the earliest stages as investor and director with a number of companies that scaled up successfully, including Tracsis, Xeros Technology and Retroscreen. Charles holds an engineering degree as well as an MBA from the University of California at Berkeley, and is also a CFA Charterholder. He is a director of Contego Solutions, Medovate, SHE Software and Volo Commerce.
Sam joined NVM in 2018 as Talent Director, a newly formed position. He has over 10 years' experience in executive search, assessment and advisory experience in the technology markets. NVM believes that access to the right people and expertise can make all the difference when it comes to scaling a business and Sam's primary remit is to build, develop and evolve NVM's network of board directors and advisors whilst working closely with NVM's portfolio businesses.
Jason joined NVM in 2017. He studied Mathematics and Computer Science at the University of Oxford, where he obtained a Masters degree. He became a software engineer with Morgan Stanley, before joining a systematic hedge fund as a quantitative developer, where he was responsible for the trade generation systems and working with the research team on automated trading algorithms. His deep software skills are valuable in assessing IT sectors and developments and in making informed investment decisions.
Ishaan joined NVM in 2018 and is responsible for sourcing, transacting and managing investments across all sectors but has a specific interest in software, engineering and social businesses. He has over 10 years' experience, initially in investment banking and at a mid-market private equity fund. For the past five years he has been working with, and leading investments in, early-stage businesses. Ishaan has a BA in Engineering from the University of Cambridge and a Masters in Engineering Management from Duke University in the United States.
Charlotte joined NVM in 2018 and is responsible for sourcing, transacting and managing investments across all sectors with specific interest in technology and life sciences investments. Before joining NVM, Charlotte spent over five years at Silicon Valley Bank leading transactions for growth to late-stage technology companies in Europe and the United States. Charlotte has a First Class undergraduate degree in Biology (Honours in Pharmacology with Neuroscience) from University of Edinburgh and a Masters in Finance degree from London Business School.
Aaron joined NVM in 2017 following nine years in Corporate Banking with Barclays and NatWest. The majority of his time was spent supporting the needs of Corporate Banking customers across the North of England where he built a specialty Technology, Media & Telecoms portfolio. Following this, Aaron was the lead for Barclays Venture Debt proposition in the North East, working with a series of fast growth and private equity backed businesses. During his time in banking Aaron won the award for Corporate Banker of the Year three times. He has a degree in Business Finance from Northumbria University and is a director of Ridge Pharma.
Carmine joined NVM in 2018 and is responsible for identifying investment opportunities in the North West and Wales, progressing NVM's investments from origination, and supporting portfolio companies as they grow. He joined NVM from the Development Bank of Wales' technology ventures team, where he invested in early-stage businesses and has a First Class BSc honours degree in Pharmacology with Industrial Experience and a PhD in Cardiovascular Medicine from the University of Manchester.
The summary below sets out the initial and ongoing costs relating to a subscription for VCT Shares under the Offers.
NVM will receive from the Companies a Promoter's Fee, at the rate of 2% (discounted to 1.5% if the valid application is received by 31 January 2019) of the gross proceeds of the Offers in the case of subscriptions received direct or through a financial adviser or 4% (discounted to 3.5% if the valid application is received by 31 January 2019) in the case of subscriptions received through an execution-only platform or broker. NVM has undertaken to pay out of its Promoter's fee all the upfront costs associated with the Offers, including initial commissions payable to execution-only brokers.
The Companies have agreed to facilitate the payment of one-off Adviser Charges, by accepting instructions from an Investor through the Application Form to deduct the amount of the fee agreed by them with their Intermediary, from the amount they send to the Companies. Ongoing fees to Intermediaries will not be facilitated by the Companies. The Investor will be issued fewer Offer Shares (to the equivalent value of the Adviser Charge) as set out in the Pricing Formula. Where the Adviser Charge stated on the Application Form is inclusive of VAT, the Investor may remain liable for the VAT element thereof.
Income tax relief should still be available on the total amount subscribed, before deduction of Adviser Charges, subject to the VCT rules and personal circumstances.
Basic management fee: NVM receives a basic annual management fee from the Companies at the rate of 2.06% of net assets, calculated half-yearly on 31 March and 30 September. The basic management fee payable in respect of the level of cash and liquid investments over and above £20 million in each Company is reduced to 1%.
Accounting and secretarial fee: NVM provides accounting, administrative and secretarial services to each of the Companies for an annual fee which is adjusted annually by reference to the movement in the RPI. The
fees payable for the Companies' current financial years are £69,000 by Northern Venture Trust, £56,000 by Northern 2 VCT and £54,000 by Northern 3 VCT.
Performance-related management fee: NVM is entitled to receive a performance-related management fee from each of the Companies equivalent to a specified percentage of the amount, if any, by which the Total Return in each financial year (expressed as a percentage of opening NAV) exceeds a performance hurdle. The relevant specified percentages are 15.0% for Northern Venture Trust, 12.0% for Northern 2 VCT and 14.2% for Northern 3 VCT. The hurdle is a composite rate based on the level of long-term investments and cash and near-cash investments during the year. For the most recent financial year the hurdle rate for Northern Venture Trust was 6.0%, for Northern 2 VCT 5.9% and for Northern 3 VCT 5.7%. The performance-related fee payable by each of the Companies is subject to an overall annual cap of 2.25% of net assets.
Subsequent to the Offers, execution-only brokers will usually be paid an annual trail commission of 0.4% of their clients' gross subscriptions in the Offers for a period of five years, of which the Companies will pay 0.2% and NVM will pay 0.2%. The total Annual Running Costs of the Companies, including the basic management fee, the accounting and secretarial fee, directors' fees, fees for audit and taxation services, fees for legal and professional services, registrar's fees and trail commissions, but excluding the performance-related management fee, are capped at 2.9% of average net assets with any excess being borne by NVM.
NVM is entitled to receive fees from investee companies for the arrangement of investments (typically 3% of the amount invested) and for the provision of non-executive directors and other advisory services. Due diligence and other costs incurred in relation to investment proposals which for whatever reason do not proceed to completion are borne by NVM.
The number of Offer Shares to be issued to each Applicant in each Company will be calculated based on the following Pricing Formula (rounded down to the nearest whole Offer Share):
1 Less any reduction for commission waived by Intermediaries (where applicable)
2 After deducting any dividends declared but not yet received by Shareholders and not already deducted from the NAV
Set out below is an illustration of the number of Offer Shares that would be allotted for a subscription of £10,000 in each of the three Companies, based on the NAV per Share as at 30 September 2018. The examples include the early application discount to the Promoter's Fee available for Applications received by 31 January 2019. Charges for Applications received after this time will be greater by 0.5%
of the total subscription and correspondingly, the number of Offer Shares issued will be lower. Where applicable these examples assume an Adviser Charge (to an Intermediary) of 2% or commission waived by an execution only broker of 2.25%. The actual number of Shares to be issued will be based on the latest published NAV per Share as at the time of allotment and so may differ from those set out below.
| Example application of Pricing Formula | Direct or through a financial adviser (no Adviser Charge) |
Through a financial adviser (Adviser Charge of 2%) |
Execution only platform or broker – no commission waived by an Intermediary |
Execution only platform or broker – 2.25% commission waived by an Intermediary |
|---|---|---|---|---|
| Northern Venture Trust: | ||||
| Amount subscribed | £10,000 | £10,000 | £10,000 | £10,000 |
| Initial Promoter's Fee | £(150) | £(150) | £(350) | £(350) |
| Adviser Charge | - | £(200) | - | - |
| Commission waived by the Intermediary | - | - | - | £225 |
| Net subscription proceeds | £9,850 | £9,650 | £9,650 | £9,875 |
| Latest published NAV per share | 68.8p | 68.8p | 68.8p | 68.8p |
| Number of Offer Shares to be allotted | 14,316 | 14,026 | 14,026 | 14,353 |
| Example application of Pricing Formula | Direct or through a financial adviser (no Adviser Charge) |
Through a financial adviser (Adviser Charge of 2%) |
Execution only platform or broker – no commission waived by an Intermediary |
Execution only platform or broker – 2.25% commission waived by an Intermediary |
|---|---|---|---|---|
| Northern 2 VCT: | ||||
| Amount subscribed | £10,000 | £10,000 | £10,000 | £10,000 |
| Initial Promoter's Fee | £(150) | £(150) | £(350) | £(350) |
| Adviser Charge | - | £(200) | - | - |
| Commission waived by the Intermediary | - | - | - | £225 |
| Net subscription proceeds | £9,850 | £9,650 | £9,650 | £9,875 |
| Latest published NAV per share | 62.9p | 62.9p | 62.9p | 62.9p |
| Number of Offer Shares to be allotted | 15,659 | 15,341 | 15,341 | 15,699 |
| Example application of Pricing Formula | Direct or through a financial adviser (no Adviser Charge) |
Through a financial adviser (Adviser Charge of 2%) |
Execution only platform or broker – no commission waived by an Intermediary |
Execution only platform or broker – 2.25% commission waived by an Intermediary |
|---|---|---|---|---|
| Northern 3 VCT: | ||||
| Amount subscribed | £10,000 | £10,000 | £10,000 | £10,000 |
| Initial Promoter's Fee | £(150) | £(150) | £(350) | £(350) |
| Adviser Charge | - | £(200) | - | - |
| Commission waived by the Intermediary | - | - | - | £225 |
| Net subscription proceeds | £9,850 | £9,650 | £9,650 | £9,875 |
| Latest published NAV per share | 92.6p | 92.6p | 92.6p | 92.6p |
| Number of Offer Shares to be allotted | 10,637 | 10,421 | 10,421 | 10,664 |
It should be noted that in the examples set out above, it is assumed that the valid application has been received by 31 January 2019 and, therefore, an "early-bird" discount of 0.5% has been applied to the Promoter's Fee. The NAV per Share is as at 30 September 2018 less any dividends declared but not yet reflected in the NAV per Share.
It should also be noted that the Adviser Charges set out above have been provided to illustrate the effect on the number of Shares to be issued and should not be considered as a recommendation as to the appropriate levels of Adviser Charges.
Biographical summaries of the directors may be viewed on the NVM website at www.nvm.co.uk
Simon Constantine (Chairman) Nigel Beer Richard Green Tim Levett David Mayes Hugh Younger
David Gravells (Chairman) Alastair Conn Simon Devonshire Cecilia McAnulty Frank Neale
James Ferguson (Chairman) Chris Fleetwood Tim Levett John Waddell
The Offer price for each Company is calculated based on the latest NAV adjusted to reflect the Promoter's Fee and, if applicable, any Adviser Charges, or waived commission.
12.00 noon on 5 April 2019 (unless fully subscribed earlier)
Northern Venture Trust June and December
Northern 2 VCT and Northern 3 VCT January and July
Northern Venture Trust Annual results to 30 September announced in November
Half yearly results to 31 March announced in May
Annual results to 31 March announced in May
Half yearly results to 30 September announced in November
In recognition of the loyalty of our existing Shareholders, many of whom have supported the Northern VCTs for over 20 years, applications from Northern VCT's Shareholders (or their spouse or civil partner) will have priority, on a first come first served basis, in any of the Offers until close of business on 21 January 2019, prior to accepting applications from any other Investors.
Before applying, please read the enclosed Application Form and the accompanying notes carefully. If you need any further information, please call NVM's investor helpline on 0191 244 6024 (please note that NVM cannot provide investment or tax advice).
Completed Application Forms, accompanied by cheques or banker's drafts or specifying account details from which an electronic payment will be made following receipt of payment instruction in accordance with the specified procedure, should be sent to NVM's Newcastle upon Tyne office at Time Central, 32 Gallowgate, Newcastle upon Tyne, NE1 4SN as soon as possible. Please see the Application Form for further details on accepted payment methods
Subject to the arrangements relating to existing Shareholder priority, applications will be dealt with on a strict first come first served basis, subject to the discretion of the relevant Board. You may apply for shares in one, two or all three of the Companies. The Application Form contains boxes for you to indicate how you would like your application to be dealt with in the event that one or more of the Offers you have applied for has already closed – you have the option of either having your application reallocated to any Offers remaining open or having your application(s) to any Offer which has closed cancelled.
Although applications for all three Companies may be made on the same Application Form, your application for each Company will be dealt with separately, as each Offer is a separate offer for subscription.
The Offers are open for the 2018/19 tax year only and will close no later than 5 April 2019, or earlier if fully subscribed.
In order to protect the interests of existing Northern VCT Shareholders, priority will be given until close of business on 21 January 2019 to existing Shareholders (or their spouse or civil partner) who were on the register of members of any of the Companies at the close of business on 14 November 2018, for any of the Offers.
Thereafter all applications will have equal priority but will continue to be dealt with on a strict first come first served basis. If you are the beneficial holder of Shares which are registered in the name of a nominee and wish to take advantage of the priority application rights set out above, you will be required to produce evidence of your entitlement (eg. a letter of confirmation from the nominee or a statement from your nominee confirming your holding as at 14 November 2018).
Applications from investors who are not existing Shareholders in any of the Companies are welcomed and will be acknowledged and dealt with on a first come first served basis, subject to the priority arrangements for existing Shareholders as described above.
We will acknowledge receipt of your application as soon as possible in writing.
If successful, we will then write to you to confirm that your cheque or banker's draft is being presented for payment or provide you with payment details for electronic payments, depending on your selected payment method.
For applications received after the Offers have closed or become fully subscribed, we will write to you to confirm that your application has been unsuccessful and will return your Application Form and any funds remitted to us, with no interest applied to such sums.
Following allotment, which is expected to take place between 1 April 2019 and 5 April 2019, we will arrange for the Registrars to send you your share certificate(s) and income tax relief certificate(s).
The objective of each of the Companies is to provide high long-term tax-free returns to Investors through a combination of dividend yield and capital growth, by investing primarily in unquoted UK manufacturing, service and technology businesses which meet NVM's key criteria of good value, growth potential, strong management and ability to generate cash in the medium to long term.
The investment policy of each Company has been designed to enable the Company to achieve its objective whilst complying with the qualifying conditions set out in the VCT rules, as amended by HM Government from time to time.
The Directors of each Company intend that the longterm disposition of each of the Companies' assets will be approximately 80% in a portfolio of VCT-qualifying unquoted and AIM-quoted investments, and 20% in other investments selected with a view to producing an enhanced return while avoiding undue capital volatility, to provide a reserve of liquidity which will maximise the Company's flexibility as to the timing of investment acquisitions and disposals, dividend payments and share buy-backs.
Within the VCT-qualifying portfolio, investments will be structured using various investment instruments, including ordinary and preference shares, loan stocks and convertible securities, to achieve an appropriate balance of income and capital growth. The selection of new investments will necessarily have regard to the VCT Rules, which are designed to focus investment on earlier stage development capital opportunities. The portfolio will be diversified by investing in a broad range of VCT-qualifying industry sectors and by holding investments in companies at different stages of maturity in the corporate development cycle. The normal investment holding period is expected to be in the range from three to ten years.
No single investment will normally represent in excess of 3% of each Company's total assets at the time of acquisition. As investments are held with a view to long-term capital growth as well as income, it is possible that individual holdings may grow in value to the point where they represent a significantly higher proportion of total assets prior to a realisation opportunity being available.
Investments will normally be made using the relevant Company's equity shareholders' funds and it is not intended that any of the Companies will take on any longterm borrowings.
VCTs are exempt from corporation tax on chargeable gains. There is no restriction on the distribution of realised capital gains by a VCT, subject to the requirements of company law. The Companies will be subject to corporation tax on their income (excluding dividends received from UK companies) after deduction of attributable expenses.
Individuals who subscribe for Offer Shares must be aged 18 or over to qualify for the tax reliefs outlined below.
An Investor subscribing up to £200,000 in the 2018/19 tax year for eligible shares in a VCT will be entitled to claim income tax relief, at the rate of 30%, although this relief will be withdrawn if either the shares are sold within five years or the Investor takes out a loan which would not have been made, or would not have been made on the same terms, save for the acquisition of such shares. If an Investor has sold, or if they sell, any shares in the Companies within six months before or after the subscription for the Offer Shares, then for the purposes of calculating income tax relief on the Offer Shares the subscribed amount must be reduced by the amount received from the sale. Relief is also restricted to the amount which reduces the Investor's income tax liability to nil.
An Investor who subscribes for or acquires eligible shares in a VCT (up to a maximum of £200,000 in the 2018/19 tax year) will not be liable for UK income tax on dividends paid by the VCT. The income received by the VCT will usually constitute either interest (on which the VCT may be subject to tax) or a dividend from a UK company (on which the VCT would not be subject to tax). The VCT's income, reduced by the payment of tax (if applicable), can then be distributed tax-free to Investors who benefit from this dividend relief. There is no withholding tax on dividends paid by a UK company and, consequently, the Companies do not assume responsibility for the withholding of tax at source.
A disposal by an individual Investor of his/her shares in a VCT will neither give rise to a chargeable gain nor an allowable loss for the purposes of UK capital gains tax. This relief is also limited to disposals of shares acquired within the £200,000 limit described above.
The Offer Shares are eligible VCT shares for the purposes of this section.
(i) Initial income tax
If an Investor dies at any time after making an investment in a VCT, the transfer of shares on death is not treated as a disposal and, therefore, the initial income tax relief is not withdrawn. However, the shares will become part of the deceased's estate for inheritance tax purposes.
(ii) Tax implications for the beneficiary
Provided a number of conditions are met, the beneficiary of any VCT shares will be entitled to tax-free dividends and will not pay capital gains tax on any disposal of shares acquired within the £200,000 limit described above, but will not be entitled to any initial income tax relief.
(iii) Transfer of shares between spouses
A transfer of shares in a VCT between spouses is not deemed to be a disposal and, therefore, all tax reliefs will be retained.
(i) Investors who are not resident in the UK
Non-resident Investors, or Investors who may become non-resident, should seek their own professional advice as to the consequences of making an investment in a VCT, because they may be subject to tax in other jurisdictions.
(ii) Stamp duty and stamp duty reserve tax
No stamp duty or (unless shares in a VCT are issued to a nominee for a clearing system or a provider of depository receipts) stamp duty reserve tax will be payable on the issue of VCT shares. The transfer on the sale of shares would normally be subject to ad valorem stamp duty or (if an unconditional agreement to transfer such shares is not completed by a duly stamped transfer within two months) stamp duty reserve tax generally, in each case at the rate of 50p for every £100 or part of £100 of the consideration paid where the total consideration exceeds £1,000 or if it forms part of a series of transactions where the total consideration exceeds £1,000. Such duties would be payable by a person who purchases such shares from the original subscriber.
(iii) Purchases in the market after listing
Any subsequent purchaser of existing VCT shares, as opposed to a subscriber for new VCT shares, will not qualify for income tax relief on investment but may benefit from dividend relief and from capital gains tax relief on the disposal of his/her VCT shares.
(iv) The VCT Regulations 2004 (as amended)
Under the VCT Regulations, monies raised by any further issue of shares by an existing VCT are subject to a grace period of three years before they must be applied in making investments which meet the VCT qualifying thresholds. However, to the extent any of the money raised (save for an insignificant amount in the context of the whole issued ordinary share capital of the VCT) is used by the VCT to purchase its own shares then this grace period shall not apply.
To obtain VCT status a company must be approved by HM Revenue & Customs as a VCT. HM Revenue & Customs has granted the Companies approval under Section 274 ITA as a VCT and the Companies intend to continue complying with the requirements of such section.
For a VCT to obtain full unconditional approval, the conditions summarised below must be satisfied in relation to the accounting period of the company which is current when the application for approval is made, or in any event must be satisfied by no later than the beginning of the VCT's next accounting period and must continue to be satisfied throughout the life of the VCT:
The VCT must not be a close company. Its ordinary share capital must be quoted on any regulated market in the EU or European Economic Area.
The VCT must not in respect of any share capital
created on or after 6 April 2014, and any reserves created from the cancellation thereof, make any payment or distribution out of such share capital and reserves to shareholders within three years from the end of the accounting period in which that share capital was created.
The following conditions also have to be satisfied by no later than the beginning of the VCT's accounting period which commences no later than three years after provisional approval takes effect and must continue to be satisfied throughout the life of the VCT:
Disposals of Qualifying Investments, which have been a qualifying holding throughout the six months prior to disposal, are disregarded for the purposes of the 70% test for a period of six months (from 6 April 2019 this period will be twelve months).
Qualifying Investments comprise shares or securities (including loans with a five year or greater maturity period but excluding secured loans and securities) issued by unquoted trading companies which exist wholly or mainly for the purpose of carrying on one or more qualifying trades. The trade must be carried on by, or be intended to be carried on by, the investee company or a 90% held qualifying subsidiary (directly held or in the third tier within the group) at the time of the issue of the shares or securities to the VCT and at all times thereafter). The investee company must have a permanent establishment in the UK and must meet the risk-to-capital condition. This principles based condition broadly requires the investee to be an early stage, higher risk, entrepreneurial company which has the potential to grow in the long term.
A company intending to carry on a qualifying trade must begin to trade within two years of the issue of shares or securities to the VCT and continue it thereafter. The definition of a qualifying trade excludes certain activities, including dealing in property, shares, securities, commodities or futures. It also excludes banking, insurance, receiving royalties or licence fees in certain circumstances, leasing, the provision of legal and accounting services, farming and market gardening, forestry and timber production, property
development and operating or managing hotels, guest houses, nursing and residential care homes, coal production, steel production, ship building, the production of fuel or power, the generation or export of heat or electricity or making reserve electricity generation capacity available. The funds raised by the investment must be used for the purposes of the qualifying trade within certain time limits.
A qualifying investment can be made in a company which is a parent company of a trading group where the activities of the group, taken as a whole, consist of carrying on one or more qualifying trades. The subsidiary carrying on the qualifying trade in question must be at least 90% owned by the parent company. The investee company's gross assets must not exceed £15 million immediately prior to the investment. Neither the VCT nor any other company may control the investee company. At least 10% of the VCT's total investment in the investee company must be in non-preferential shares. Investee companies or groups must have fewer than 250 employees (500 for a 'knowledge intensive' company). Companies are permitted to receive a maximum of £5 million from all State Aid investment sources in the 12 months ending on the date of the VCT's investment. There is also a disqualifying purpose test designed to exclude companies set up for the purpose of accessing the tax reliefs. VCT funds may not be used by investee companies to acquire shares, another business or intangible assets in use in a trade.
Companies whose shares are traded on AIM or are NEX-quoted or NEX-traded are treated as unquoted companies for the purposes of calculating qualifying investments. Shares in an unquoted company which subsequently become listed may still be regarded as a qualifying investment for a further five years following listing, provided all other conditions are met.
The above is only a summary of the tax position of individual investors in VCTs, based on the Companies' and NVM's understanding of current law and practice. Investors are recommended to consult a professional adviser as to the taxation consequences of investing in a VCT. Tax reliefs referred to in this document are UK tax reliefs and are dependent on the Companies maintaining their VCT qualifying status.
| "Adviser Charge" | fee agreed between an Investor and his/her Intermediary for the provision of a personal recommendation and/or related services in relation to an investment in the Offer Shares |
|---|---|
| "AIM" | London Stock Exchange's international market for smaller growing companies |
| "Annual Running Costs" | annual costs and expenses incurred, in the ordinary course of business (including irrecoverable VAT), by the Companies |
| "Applicant(s)" | person(s) who applies for Offer Shares under the terms of the Offers, and "Application" refers to an application for Offer Shares submitted on an Application Form |
| "Application Form" | application form for Offer Shares under the terms of the Offers (including the Guidance Notes within that form) |
| "Articles" | articles of association of Northern Venture Trust and/or Northern 2 VCT and/or Northern 3 VCT (as the context dictates) |
| "Board(s)" | board of directors of Northern Venture Trust and/or Northern 2 VCT and/or Northern 3 VCT (as the context dictates) |
| "Company/Companies" | each or any of Northern Venture Trust PLC, Northern 2 VCT PLC and Northern 3 VCT PLC (as the context dictates) |
| "CREST" | relevant system (as defined in the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755)) for the paperless settlement of transfers and the holding of shares in uncertificated form which is administered by Euroclear UK & Ireland Limited |
| "Directors" | directors of Northern Venture Trust and/or Northern 2 VCT and/or Northern 3 VCT (as the context dictates) |
| "Execution-only Transaction" | transaction executed by an FCA authorised firm upon the specific instructions of a client where the firm does not give advice or make a personal recommendation |
| Existing Northern VCT Shareholder(s) | Shareholder(s) in any of Northern Venture Trust , Northern 2 VCT or Northern 3 VCT whose holding(s) is/are included in the relevant register of members as at close of business on 14 November 2018 |
| "FCA" | Financial Conduct Authority or its successor |
| "FCA Handbook" | handbook of rules made by the FCA from time to time |
| "FSMA" | Financial Services and Markets Act 2000 as amended from time to time |
| "GDPR"" | the General Data Protection Regulation ((EU) 2016/679). |
| "Howard Kennedy" or "HKCS" | Howard Kennedy Corporate Services LLP, which is authorised and regulated by the FCA (FRN 523524) |
| "Index of UK Retail Prices" or "RPI" | Retail Prices Index, being a measure of inflation published by the Office of National Statistics |
| "Intermediary/Intermediaries" | either or any of: a financial advisory firm or person, or share holding or brokerage platform, in each case authorised under the FSMA in respect of the activities it carries out and which advises any Applicant on or in connection with the Offers, or through which any Applicant may obtain the Application Form and submit an Application (as the context dictates) |
| "Investor(s)" | subscriber/subscribers for Offer Shares under the terms of the Offers |
|---|---|
| "ITA" | Income Tax Act 2007 (as amended) |
| "London Stock Exchange" | London Stock Exchange plc (registered number 02075721) |
| "Manager" or "NVM" | NVM Private Equity LLP which is authorised and regulated by the Financial Conduct Authority (FRN 653677) |
| "Manager's Fee" | the fee to be charged to the Companies by the Manager as described on page 15 of this document |
| "ML Regulations" | The Money Laundering Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (as amended) |
| "MBO" | management buy-out |
| "NAV" or "Net Asset Value" | most recently published net asset value attributable to a Share calculated in accordance with each Company's normal accounting policies in force at the date of calculation subject to any adjustments deemed necessary by the relevant Directors |
| "Northern 2 VCT" | Northern 2 VCT PLC (registered number 03695071) |
| "Northern 2 VCT Offer" | offer for the subscription of up to £6,600,000 of shares in the capital of Northern 2 VCT under the terms of this document |
| "Northern 3 VCT" | Northern 3 VCT PLC (registered number 04280530) |
| "Northern 3 VCT Offer" | offer for the subscription of up to £6,600,000 of shares in the capital of Northern 3 VCT under the terms of this document |
| "Northern VCTs" | Northern Venture Trust, Northern 2 VCT and Northern 3 VCT |
| "Northern Venture Trust" | Northern Venture Trust PLC (registered number 03090163) |
| "Northern Venture Trust Offer" | offer for the subscription of up to £6,600,000 of shares in the capital of Northern Venture Trust under the terms of this document |
| "Offer Document" | this document dated 3 January 2019, together with the Application Form |
| "Offer Shares" | Shares subscribed for under the terms of the separate Northern Venture Trust Offer, the Northern 2 VCT Offer or the Northern 3 VCT Offer (as the context dictates) |
| "Offer(s)" | Northern Venture Trust Offer, Northern 2 VCT Offer and/or Northern 3 VCT Offer (as the context dictates) |
| "Official List" | official list of the UK Listing Authority |
| "Personal Data" | has the meaning given to that term in Article 4 of GDPR, and includes, any information identifying, or relating to a person who can be identified, directly or indirectly, from that data and other information in possession of or reasonably accessible by the relevant Company. |
| "Pricing Formula" | mechanism by which the pricing of the Offers may be adjusted according to the latest published NAV of the relevant Company, the level of Adviser Charges, Promoter's Fee and commission waived, as described on page 16 of this document |
| "Promoter" | NVM Private Equity LLP or NVM |
| "Promoter's Fee" | fee payable to NVM by the Companies, calculated as a percentage of each Applicants gross subscription to the offers (out of which NVM will pay the upfront launch costs associated with it and incurred by it in respect of the offers), as described on page 15 of this document |
|---|---|
| "Prospectus Regulation" | regulation number 809/2004 of the European Commission as amended |
| "Prospectus Rules" | prospectus rules of the FCA |
| "Qualifying Investments" | investment in an unquoted trading company, which comprises a qualifying holding for a VCT as defined in Chapter 4 Part 6 of the ITA |
| "Registrar" | Equiniti Limited (registered number 06226088) |
| "RIS" | regulatory information service |
| "Shareholders" | holders of Shares |
| "Share(s)" | ordinary shares of 25p each in the capital of Northern Venture Trust in issue as at the date of this document (ISIN: GB0006450703), ordinary shares of 5p each in the capital of Northern 2 VCT in issue as at the date of this document (ISIN: GB0005356430) and/or ordinary shares of 5p each in the capital of Northern 3 VCT (ISIN: GB0031152027) (as the context dictates) |
| "Total Return" | sum of the NAV and the cumulative dividends paid to Shareholders per Share |
| "UK Listing Authority" | FCA acting in its capacity as the competent authority for the purposes of Part VI of the FSMA |
| "VCT" or "Venture Capital Trust" | venture capital trust as defined in Section 259 of the ITA |
| "VCT Tax Relief(s)" | reliefs from taxation described in the VCT Rules |
| "VCT Rules" | legislation, rules and HM Revenue & Customs interpretation and practice regulating the establishment and operation of VCTs |
for which your application is accepted, and/or a crossed cheque for any monies returnable, by post at your risk to your address as set out on your Application Form. An Investor applying for Offer Shares under the Offers may subsequently hold Shares in CREST by making arrangements with a system-member (as defined in the CREST regulations) in relation to converting their shareholding represented by a share certificate into CREST;
to be determined in the absolute discretion of the Companies) to ensure compliance with the ML Regulations;
with the VCT Rules (as amended from time to time) including without limitation satisfactory evidence of identity to ensure compliance with the ML Regulations;
Application Form and if signed by an Intermediary on behalf of the Investor, to enclose the original, or duly certified copy, of such authority;
Companies have not been and will not be registered under the United States Investment Company Act of 1940, as amended. The Manager will not be registered under the United States Manager Act of 1940 (as amended). No application will be accepted if it bears an address in the USA.
at the managers discretion, for any other Applications. Pending the provision of evidence satisfactory to the Manager as to the identity of the Applicant and/or any person on whose behalf the Applicant appears to be acting, the Manager may, in its absolute discretion, retain an Application Form lodged by an Applicant and/ or the cheque or other remittance relating thereto and/or the Registrar may not enter the Applicant on the register of members or issue any share certificates in respect of such application. If verification of identity is required, this may result in delay in dealing with an application and in rejection of the application. The Companies reserve the right, in their absolute discretion, for them or the Manager to reject any application in respect of which the Manager considers that, having requested verification of identity, it has not received evidence of such identity satisfactory to it by such time as was specified in the request for verification of identity or in any event within a reasonable period. In the event of an application being rejected in any such circumstances, the Companies reserve the right in their absolute discretion, but shall have no obligation, to terminate any contract of allotment relating to or constituted by such Application Form (in which event the money payable or paid in respect of the application will be returned (without interest) to the account of the drawee bank from which such sums were originally debited) and/or to endeavour to procure other subscribers for the Offer Shares in question (but in each case without prejudice to any rights the Companies may have to take proceedings to recover in respect of loss or damage suffered or incurred by them as a result of the failure to produce satisfactory evidence as aforesaid). The submission of an Application Form will constitute an undertaking by the Applicant to provide promptly to the Manager such information as may be specified by it as being required for the purpose of the ML Regulations.
Time Central 32 Gallowgate Newcastle upon Tyne NE1 4SN
0191 244 6000 [email protected] www.nvm.co.uk
NVM Private Equity LLP is registered in England no OC392261 Authorised and regulated by the Financial Conduct Authority
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.