Hargreave Hale - Our VCT's

OUR VCTs

The fund management team at Hargreave Hale has been managing AIM VCTs since 2004. To date, these VCTs have rewarded investors with strong performance and an attractive tax-free dividend stream, in addition to the income tax relief available at the point of investment.

  • Hargreave Hale AIM VCT 1
  • Hargreave Hale AIM VCT 2
  • Key Policies
  • INTRODUCTION

    Launched in August 2004 with an initial raise of £14.3 million through the raise of ordinary shares, Hargreave Hale AIM VCT 1 plc has gone on to raise a further £57.7 million of further funding through subsequent offers for subscription and a 2012 enhanced share buy back. Hargreave Hale has been the appointed investment manager and custodian of the company’s asset since inception.

    DIRECTORS

    The board has three experienced non-executive directors, including two that are independent of Hargreave Hale. Their duties include:

    • overseeing delivery of the investment strategy;
    • monitoring compliance with VCT rules;
    • maintaining corporate governance standards;
    • producing reports and accounts for shareholders.
    Sir Aubrey Brocklebank

    Sir Aubrey Brocklebank

    Following a career in corporate finance and venture capital, Aubrey assumed his first role within the VCT industry in 1997. Since then he has gone on to become one of the most experienced directors within the industry. Aubrey maintains a wide range of business interests and has been a director of six AIM listed companies. He is non-executive chairman of Puma VCT 8 plc and senior independent director of Downing Planned Exit VCT 4 plc.

    David Brock

    David Brock

    An experienced company chairman in both private and public companies, and a former main board director of MFI Furniture Group plc, David joined the Board of Hargreave Hale AIM VCT 1 plc in September 2010. David is chairman of ECS Global and Elderstreet VCT plc and a non-executive director of Puma VCT 8 plc.

    Oliver Bedford BSC MCSI

    Oliver Bedford BSC MCSI

    Oliver Bedford graduated from Durham University in 1995 with a degree in Chemistry. He served in the British Army for 9 years before joining Hargreave Hale in 2004. Oliver co-manages the VCTs with Giles Hargreave and supports other unit trusts as part of the fund management team.

    Summary

    August 2017

    • Ticker
      HHV
    • Launch Date
      September 2004
    • Year End
      September
    • Share Price
      (05.09.17))
      74.00p
    • NAV per share
      79.51p
    • Last Div. Paid
      (30.06.17)
      1.75p
    • Next Div.
      N/A
    • Total Divs. Paid
      46.00p
    • NAV Yield
      (30.09.16)
      5.27%
    • Discount to NAV
      (05.09.17)
      6.93%
    • Number of Shares
      81,653,218
    • Market Cap
      £60.4m
    • Charges (AMC)
      1.50%
    • Ongoing Expenses
      1.88%
    • SEDOL Number
      B02WHS0
    • ISIN Number
      GB00B02WHS05
  • INTRODUCTION

    Launched in September 2006 with an initial raise of £4.6million through the issue of ordinary shares, Hargreave Hale AIM VCT 2 plc has now gone on to raise a further £36.8million of further funding through subsequent offers for subscription and 2012 enhanced share buy back. Hargreave Hale has been the appointed investment manager and custodian of the company’s assets since inception.

    DIRECTORS

    The board has three experienced non-executive directors, including two that are independent of Hargreave Hale. Their duties include:

    • overseeing delivery of the investment strategy;
    • monitoring compliance with VCT rules;
    • maintaining corporate governance standards;
    • producing reports and accounts for shareholders.
    David Hurst-Brown

    David Hurst-Brown

    David worked for over 25 years in the City. Much of this time was spent within the corporate finance division of UBS Warburg, where he established a small companies business unit. David has chaired the Board of Hargreave Hale AIM VCT 2 plc since incorporation in 2006. He is also non-executive chairman of Foresight Solar VCT plc.

    Philip Cammerman

    Philip Cammerman

    Philip has held management roles in engineering and high-tech industries and, more recently, fund management at YFM Group. In addition to his directorship of Hargreave Hale AIM VCT 2 plc, Philip is a non-executive director of Pressure Technologies plc, British Smaller Companies VCT plc, Howmac Ltd and FCFM Group Limited.

    Oliver Bedford BSC MCSI

    Oliver Bedford BSC MCSI

    Oliver Bedford graduated from Durham University in 1995 with a degree in Chemistry. He served in the British Army for 9 years before joining Hargreave Hale in 2004. Oliver co-manages the VCTs with Giles Hargreave and supports other unit trusts as part of fund management team.

    Summary

    August 2017

    • Ticker
      HHVT
    • Launch Date
      September 2006
    • Year End
      February
    • Share Price
      (05.09.17)
      107.00p
    • NAV per share
      115.47p
    • Last Div. Paid
      (25.07.17)4.0p
    • Next Div.
      N/A
    • Total Divs. Paid
      53.0p
    • NAV Yield
      (28 Feb 16)
      5.46%
    • Discount to NAV (05.09.17)
      7.34%
    • Number of Shares
      43,863,946
    • Market Cap
      £46.0m
    • Charges (AMC)
      1.50%
    • Ongoing Expenses
      2.10%
    • SEDOL Number
      B1GDYS5
    • ISIN Number
      GB00B1GDYS53
  • INVESTMENT OBJECTIVES

    The Companies’ investment objectives are:

    • To invest in a diversified portfolio of small UK based companies on a high risk, medium term capital growth basis, primarily being companies which are traded on AIM and which have the opportunity for significant value appreciation;
    • To invest in smaller companies which may not be readily accessible to private individuals and which also tend to be more risky;
    • To maximise distributions to shareholders from capital gains and income generated from the Companies’ funds;
    • Targeted investment in equities which are non-qualifying investments on an opportunistic basis; and to maintain the Companies’ exposure to small companies through an initial investment of new capital into the Marlborough Special Situations Fund pending investment into Qualifying Companies.

    INVESTMENT STRATEGY

    The Investment Manager and the Companies have adopted the following strategy to implement the investment policies of the Companies (the full text of which is set out in the Registration Document):

    Qualifying Investments

    The Investment Manager will primarily focus on investments in companies with a quotation on AIM or plans to trade on AIM. The Investment Manager prefers to participate in secondary issues of companies that are quoted on AIM as such companies have an established track record that can be more readily assessed and greater disclosure of financial performance.

    The Investment Manager will follow a stock specific investment approach and is more likely to provide growth and development capital than seed capital.

    Although VCTs are required to invest and maintain a minimum of 70% of their funds invested in Qualifying Investments as measured by the VCT rules, it is likely that Hargreave Hale will target a higher threshold of approximately 80% in order to provide some element of protection against an inadvertent breach of the VCT rules.

    Whilst tax legislation limits each Company's maximum exposure to a single Qualifying Investment to 15% of net assets (at book cost), Hargreave Hale’s preference for portfolio diversification means that Qualifying Investments typically vary from 1-3% of net assets at book cost and rarely exceed 5% of net assets at book cost.

    Although Hargreave Hale prefers to maintain successful investments for the long term, it actively manages its portfolio risk through partial disposals. In most instances, single company exposure is limited to approximately 5% of net assets at market value, although on occasion this may run higher.

    Non-Qualifying Investments

    The Companies will have non-qualifying equity exposure to UK and international equities. This will vary between nil and 30% of the net assets of the Companies and will reflect the Investment Manager's view of equity market risk. The Investment Manager will also invest in fixed income securities and cash.

    Subject to a maximum of 20% of the gross assets of each Company, the Investment Manager will invest up to 75% of the net proceeds of the Offers into the Marlborough Special Situations Fund to maintain the portfolio exposure to small companies whilst the Investment Manager identifies opportunities to invest directly into small UK companies through a suitable number of Qualifying Investments.

    RISK MANAGEMENT

    The structure of the Companies’ investment portfolios and their investment strategies have been developed to mitigate risk where possible.

    • Both Companies have broad portfolio of investments to reduce stock specific risk.
    • Flexible allocations to non-qualifying equities, the Marlborough Special Situations Fund, fixed interest securities and bank deposits allow the Investment Manager to adjust portfolio risk without compromising liquidity.
    • Regular company meetings aid the close monitoring of investments to identify potential risks and allow corrective action where possible.
    • Regular board meetings and dialogue with the Directors, along with policies to control Conflicts of Interests and co-investment with the Marlborough fund mandates, support strong governance.
    • Quarterly risk reports provide an oversight of potential vulnerabilities such as the concentration of balance sheet risk, earnings risk, valuation risk and liquidity.

    SHARES BUY-BACK AND MANAGEMENT OF SHARES LIQUIDITY

    In order to improve the liquidity in the Ordinary Shares of both Companies, each Board has established share buy-back policies whereby each Company will purchase Ordinary Shares for cancellation.

    • Targets a 5% discount to the Net Asset Value per share to improve shareholder returns.
    • Established track record with more than 14.6 million shares acquired through share buy backs and a further 5 million shares acquired through a tender offer.
    • 3 year average share price discount of 5.0% to the Net Asset Value per share of Hargreave Hale AIM VCT 1 and 5.5% for Hargreave Hale AIM VCT 2.

    Share buy-backs are subject to the Companies Act 2006 (as amended), the Listing Rules and tax legislation, which may restrict the Companies’ ability to buy Shares back. The policy is non-binding and at the discretion of the VCT Boards.

    DIVIDEND POLICY

    Both Companies have established dividend policies that target a tax free dividend yield equivalent to 5% of the year end Net Asset Value.

    • Established track record.
    • Semi-annual distributions.
    • Distributions will vary with investment performance.

    The ability to pay dividends is also dependent on the VCTs’ available reserves and cash resources, the Companies Act 2006 (as amended) and the Listing Rules. The policy is non-binding and at the discretion of the VCT Boards. Dividend payments may vary from year to year in both quantum and timing. In good years, the Directors may consider a higher dividend payment; in poor years, the Directors may reduce or even pay no dividend.