The Blackfinch Spring VCT will give investors exposure to a range of growth-stage, technology-enabled investments. It is targeting a dividend yield of 5% from FY’24, with special dividends, if realisations permit.

Why invest

Positives

• Strategy: Exposure to a portfolio of scale-up, technology-enabled companies, with good management and large markets.

Issues

• Dividend coverage: While the dividend is covered by earnings, there are no realised gains yet.

Fund manager

Positives

• Team:  There is a diverse range of experience in the team, with a clear strategy and well-designed processes.

Issues

• Track record: The Ventures team has a limited track record but has produced top-quartile performance recently.

Nuts & bolts

• Offer: To raise £20m, plus a £20m overallotment, with a closing date of 3 April 2025 for the 2024/25 tax year, and final close on 20 August 2025.
• Diversification: This has improved significantly: as of June 2024, the VCT had 30 active investments, with an active deal pipeline.
• Buybacks: At a 5% discount to NAV, subject to available reserves and board approval. No buybacks to date.

Fees

• Fees: Fees and expenses totalled 3.31% in FY’23, including a 0.5% rebate to shareholders (primarily to pay advisory fees).
• Performance fee: 20%, subject to a 130p minimum return.

Risks

• Target returns: A target return of 2.5x for individual investments suggests that the strategy is high-risk investment.
• Companies: Growth-stage, technology-enabled companies at the start of scale-up. There will be a spread of company returns, as the successful investments will do very well, but those that fail may do so completely.