London, UK – Molten Ventures VCT, one of the largest and most established venture capital investors in the UK, has launched a new offer for up to £30 million. This includes an initial £10 million, with an overallotment option of an additional £20 million.
Managed by London-listed Molten Ventures, the VCT has a portfolio of around 40 companies and total net assets of £117.8 million. It invests alongside its parent company in all VCT qualifying deals, giving it a strong position to access some of the UK’s fastest-growing companies.
Over the past five years, Molten Ventures VCT has delivered a NAV total return of 19.9%, making it a top performer in the market. The VCT targets an average annual dividend equal to 5% of NAV, providing investors with a steady income stream.
Commenting on the launch, Nicholas Hyett, Investment Manager at Wealth Club, said, “Molten Ventures VCT is managed by one of the largest, best-established venture capital teams in the UK. It’s nearly ten years since Molten took over management of the VCT and, after a lengthy transition, we’re starting to see the fruits of their investment strategy come through.”
In the last 18 months, the VCT has reported four successful exits, including selling breast cancer scanner Endomag to US-listed Hologic, fraud detection business Ravelin to Worldpay, and retail investment platform Freetrade to IG Group. The majority of the VCT’s investments are now in high-growth tech companies, in line with Molten Ventures’ investment focus.
Hyett also highlighted the potential for outsized returns with Molten Ventures VCT, saying, “While the portfolio still contains a handful of legacy holdings, the vast majority of the VCT’s money is now in the high-growth tech companies typical of Molten Ventures. This may put off some investors, but for experienced investors, the potential for outsized returns makes it an attractive option.”
Venture Capital Trusts (VCTs) are a popular investment choice for many UK investors due to their tax breaks and potential for growth. Investors can get up to 30% back in income tax relief up front, and any dividends paid by the VCT are tax-free. Additionally, growth is free from capital gains tax.
But VCTs are more than just a tax planning tool. They offer investors access to fast-growing smaller companies, providing potential for attractive long-term returns. These companies often outpace the growth of larger, more established companies, making them a desirable investment choice for many.
Investing in VCTs also offers the potential for greater portfolio diversification, as their performance is often loosely correlated with the wider economy. This means that VCTs can provide a hedge against market volatility, as highly disruptive businesses grow by taking market share from incumbents rather than relying on market growth.
When considering VCTs, it is important to be aware of the risks involved. VCTs are higher risk and have a minimum investment amount of around £3,000. As such, they are best suited for wealthier or more sophisticated investors.
Hyett also shared some tips for those considering investing in VCTs, saying, “Seek diversification by spreading investments over multiple managers. Reinvest and recycle dividends to get an additional 30% initial income tax relief. Be aware of discounts, as VCT shares can often trade at a discount to the underlying value of the fund’s investments. Lastly, be mindful of capacity limits, as popular offers can quickly reach capacity and close to new investors.”
Investors interested in Molten Ventures VCT’s latest offer are encouraged to act quickly, as VCTs have limited capacity each year, and popular offers can close to new investors.
Derick is an experienced reporter having held multiple senior roles for large publishers across Europe. Specialist subjects include small business and financial emerging markets.