The Unicorn Aim VCT has closed its doors to investors after raising the full £25m of available capacity, including its over-allotment buffer of £10m.
Chris Hutchinson, manager of the £230m venture capital trust, said the company’s long-standing reputation and regular shareholders had helped the small-cap investment vehicle attract support despite the coronavirus crisis.
He said: “[The trust] has been in existence for nearly 20 years. We are fortunate in that we have a significant number of longstanding and supportive shareholders who invest on a regular basis whenever offers are available.
“Our shareholders tend to be long-term in nature and may have seen the market recent Covid-19 related market falls as an opportunity to invest again at an attractive entry point.”
The trust’s latest fundraise brought its net assets to £230m — the largest Aim-focused VCT in the market.
According to the Association of Investment Companies, it has returned 177 per cent in share price terms over the past 10 years, slightly less than the 189 per cent returned by its peers in the AIC’s VCT Aim quoted sector.
More recently it has outperformed its sector, returning 5.3 per cent over three years compared to more than the 4.1 per cent returned by its peers and over the past year, it has returned 2 per cent compared to a 0.8 per cent average return.
Mr Hutchinson said the trust’s conservative management had attracted investors, alongside its “clear focus on achieving attractive capital growth over the long term, while also aiming to deliver sustainable tax-free dividend income”.
He added: “Some of the key characteristics required for successful investment in Aim-listed companies during these challenging times should include scalable businesses run by experienced management teams and selling or developing specialist products or services.”
Other factors included companies being “well-financed, ideally cash generative but certainly not overly indebted” and “focused on innovative and emerging technologies”, Mr Hutchinson said.
The trust’s top performing investment was the Avacta Group, adding £6.84m since January, which had developed a rapid point-of-care test for Covid-19 in partnership with larger healthcare companies.
Interactive Investor, a direct to consumer investment platform, had added £3.15m after reporting strong growth in customer numbers and trading activity.
The main drag on the trust's performance was City Pub Group. The enforced pub closure of its pub estate since mid-March had seen £3.2m wiped from its share price.
VCTs are investment trusts which only invest in small, young and usually unlisted companies. Although such companies are riskier and statistically more likely to go bust, investing in a VCT comes with a 30 per cent income tax relief from the government and any returns are tax free.
imogen.tew@ft.com
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