The Seneca Growth Capital VCT is a generalist VCT that will invest in a mixture of unquoted and AIM-listed growth companies. The aim is produce at least a 3p annual dividend per share until 2023, with a 5% yield thereafter. There is no target for capital returns. The VCT is evergreen.

Why invest

Positives

• Strategy: Exposure to a portfolio of growth companies with exposure to both unquoted and AIM-listed investments.

Issues

• Cash level:  Although Seneca has invested new cash steadily, it is still 49% of NAV.

Fund manager

Positives

• Team:  The team has a broad experience in corporate finance, tax and accounting, as well as investment.

Issues

• Size: Seneca runs a lean team: while it seems adequate for its current level of activity, it is smaller than others of similar scale.

Nuts & bolts

• Offer: The current offer is for £10m, with an over-allotment of £10m. The close for the current tax year is 4 April 2023, with final close on 17 August 2023.
• Dividend: The company aims to maintain dividends to B shareholders of at least 3p p.a.
• Buybacks: At up to a 5% discount to NAV.

Fees

• Fees: A mixture of direct fees and those charged to the investee companies.
• Performance fee: Charged on a portfolio basis at 20% for returns over 5% p.a.

Risks

• Target returns: There is no explicit target return, but the strategy suggests a high-risk investment strategy.
• Companies: Supplying risk capital to early-stage companies, including the AIM-listed investments. There will be a spread of company returns, as the successful investments will do very well, but those that fail may do so completely.