Fund of the week VCTs are an overlooked opportunity – MoneyWeek

VCTdividendsarefreefromincometaxandprofitsmadefromsharedisposalsareexemptfromcapitalgains。

“VCTsareanoverlookedopportunity,”managerBillNixontoldSharesmagazine。

OverthelastdecadeVCTshavebeen“reinvented”,withpoorlyperformingmanagersandsub-scaleoperators“weededout”。

Nixon,whohas30yearsofbankingandprivate-equityexperience,isdoingsomethingright。

Thefundhasahealthyrecordoverone,threeandfiveyears,withasharepricetotalreturnoverthreeyearsat225%andnetassetvalue(NAV)totalreturnof129。

6%。

Thetrickisthefund’sregionalpresence。

Investmentteamsmeet400to500companiesayear,butonlyinvestinfiveorsix。

Thefund,whichtradesatadiscounttoNAVof1。

9%,willselldownitsAimportfolioandredeployfundsintoincome-producingprivateventures。

Aimisnota“happyhuntingground”,butthereareopportunitiesingrowthbusinesseswhilebankfinanceremainstight。

“Ourfocusisonidentifyingthegood,solid,cash-generativebusinessesleftinBritain,”Nixonadds。

“Therearenoloss-makingcompaniesinourportfolio。