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Over the Edge

Sophisticated and complex high-risk tax-sensitive investments in small companies: handle with care
wanderer
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Re: Over the Edge

#459154

Postby wanderer » November 19th, 2021, 12:40 am

Is there anywhere where I can read a potted history of this VCT and investors' tales of woe? How much of the initial investment are people down?

In part I have a slightly morbid fascination with Edge because I was very very close to investing in it at launch (Edge performance I think it was called?). I pored over it for hours and the minimum investment would have been a huge loss to me. In the end I let the deadline expire and never invested into a VCT until this year- about 15 years later I think?

Karellan
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Re: Over the Edge

#459476

Postby Karellan » November 20th, 2021, 8:37 am

wanderer wrote:Is there anywhere where I can read a potted history of this VCT and investors' tales of woe? How much of the initial investment are people down?

In part I have a slightly morbid fascination with Edge because I was very very close to investing in it at launch (Edge performance I think it was called?). I pored over it for hours and the minimum investment would have been a huge loss to me. In the end I let the deadline expire and never invested into a VCT until this year- about 15 years later I think?



I too spent a lot of time looking at the Edge stable and I could imagine that there may have been good and unique reasons for holding them. It was many years ago and I have forgotten where my concerns came from but I spent a lot of time looking at company reports etc. I let them go as I was just not sure how in effect they could produce the goods. I understand your "morbid" fascination as I have the same.

20 years ago there were certainly VCTs that would have returned little of your initial stake. I would like to think that its less so now. It took the "industry" some time to mop up these assets and make them produce a return. I have a diverse set of VCT holdings that for me have done a good job.

I dont think of myself as a good investor but sometimes the game is about opportunities that you avoid and Edge is one of them.

127tolmers
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Re: Over the Edge

#462840

Postby 127tolmers » December 3rd, 2021, 11:02 am

https://www.investegate.co.uk/sharesoc/ ... 47115082U/

Edge Performance VCT shareholders requisition GM

On 2 December 2021, Edge Performance VCT (Edge) shareholders requisitioned a general meeting with the intention of closing the company and returning the funds to shareholders. They submitted, to the Edge board, documentation from approximately 10% of Edge shareholders requisitioning a general meeting and requiring the Edge board to circulate resolutions for that meeting in accordance with the Companies Act 2006 and the Articles of Association. The subject of the resolutions is as follows :

i. to sell the assets and return the funds to shareholders and then close the company;

ii. to elect Richard Roth and Robin Goodfellow as directors to facilitate this process;

iii. to remove Terry Back, Sir Aubrey Brocklebank and Sir Peter Bazalgette from the Board who collectively have failed to resume the adjourned AGM for over 3 months and who have failed to face all shareholders by standing for election/re-election They have also failed to give shareholders a chance to vote on the future direction of their company;

The accompanying 1,000 word statement can be read here: https://www.sharesoc.org/wp-content/upl ... olders.pdf

The requisitioners have the support of ShareSoc and the ShareSoc Edge Performance VCT Campaign.

Previous related announcements

https://www.lse.co.uk/rns/EDGI/i-share- ... uz1rj.html

https://www.lse.co.uk/rns/EDGI/sale-of- ... 4lf7q.html

https://www.lse.co.uk/rns/EDGI/annual-f ... cnktu.html

https://www.lse.co.uk/rns/EDGI/notice-o ... bd16j.html

https://www.lse.co.uk/rns/EDGH/halting- ... jmxqv.html

This release has been provided by ShareSoc on behalf of Edge Performance VCT Shareholders who have requisitioned the general meeting.

ShareSoc is supporting the ShareSoc Edge Performance VCT Campaign.

sinterklaas
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Re: Over the Edge

#463151

Postby sinterklaas » December 4th, 2021, 8:18 pm

Good on you, I hope this initiative succeeds.

Egregious mismanagement, treating shareholders with contempt.

naflod
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Re: Over the Edge

#463289

Postby naflod » December 5th, 2021, 2:56 pm

Yesterday I received a letterfrom the board begging for support, complaining about a 2small but activist group" who disrupted the board's work a little over two years ago.

The letter boasts of the H shares being the best performing VCT over the last five years per the AIC. This unfortunately overlooks one rather significant matter.

Scrolling down through my VCT spreadsheet back to 2016 I see that the NAV figure was 60.44p (from 31/08/16), so this fantastic board and investment manager had squandered almost 40% of the value of my shiny new H class shares in just three years.

Those of us that invested in Edge H shares got lucky when an investee company got taken over in a share for share exchange by Unity which has gone on to fly, otherwise the class would be following the same fate as the rest of their alphabet of peers.

naflod

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Re: Over the Edge

#463408

Postby timbo003 » December 6th, 2021, 10:06 am

.
Yes, I got one of those too Naflod, which I have scanned in and reproduce below

link also provided to original document (pdf)
https://drive.google.com/file/d/1xLmSwj ... sp=sharing


Warning to readers: Do not attempt to eat or drink whilst reading the letter below, if you do there is a good chance you will end up choking on your chow


3 December 2021

Dear Shareholder.

Edge Performance VCT plc ("The Company") plans for the future and need for shareholder support. Your Company's H share class has had another outstanding year, returning a 20p dividend during the year, with more to come in 2022 and I'm writing to let you know how you can assist us in delivering value in the future.

At the time of writing, a dividend has been declared for i shareholders, returning all the i share-net asset value, and the i share class is being closed, as requested by i shareholders. As such, the H shares will soon be the VCT's only class of shares.

A year ago we ran a tender process to see which investment manager was right for the VCT. We selected the incumbent, Edge Investments Limited ('The Manager"), as the leading specialist investor in the creative economy. That selection has been vindicated by results. The Company has had great success this year with its investments; the Manager sold our holding in Jungle Creations to a financial buyer for 2.25 times our original investment and the Company's investment in Audioboom Group plc has continued to perform strongly, currently standing at about 4 times our original investment. Our investment in deltaDNA, which the Manager converted upon exit into an investment in Unity Software, the VCT's first "unicorn" (with a market capitalisation of approximately US $50 billion) has returned more than 20 times our initial investment. The Manager has subsequently realised the majority of this gain.

As was announced on 18 November 2021 the estimated unaudited net asset value total return (NAVTR) per H share as at 17 November 2021 is approximately 2l5p, an increase of 148.73p or 3.2 times from the 66.21p NAVTR as at February 2019. For a shareholder who claimed 30% upfront tax relief, this is a return of more than 300% a on initial investment.

An excellent performance by the Manager, and on a share price total return basis the H Share class is ranked by the Association of Investment Companies (AIC) as the Number I best performing VCT over the last 5 years.

With this success and with recent realisations, I am pleased to announce that it is the Company's intention to continue to pay a regular dividend stream to shareholders. In the first half of 2022 we also plan to pay a substantial dividend as well as reactivating our share buy-back programme for H Shareholders. To enable these positive developments the Company is planning to ask shareholders in January to approve a capital reduction process through the High Court in London. This will provide the Company with sufficient distributable reserves to pay future H share dividends and share buy-backs which will in turn provide liquidity for shareholders and support the Company's share price.

The investment strategy of the investment manager for the H Share continues to prove very successful and we are pleased that the Manager is already in an advanced stage of additional investments. The Board believes that this success will continue into 2022 and beyond.

A little over two years ago, the board's work was interrupted by a small but motivated activist group, predominantly comprising i shareholders (and less than 3.8 % of the VCT shareholders), whose share class performance has been much poorer than your H share class. The activists have led to the VCT bearing additional costs and delayed many of the positive things we have recently announced. This delay and cost were only possible because many VCT shareholders do not take an active role in managing their VCT investments, indeed many are held in nominee accounts, with no voting instructions being given to nominees.

I urge you to vote for the board and our proposals at future general meetings; only with your support will we be able to continue to deliver such stellar performance for the H share class, and to pay these substantial dividends and share buy-backs.

Yours sincerely

Terry Back
Chairman


timbo003
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Re: Over the Edge

#465952

Postby timbo003 » December 15th, 2021, 8:23 am

Another RNS issued yesterday at no one is watching o'clock
https://www.investegate.co.uk/edge-perf ... 47586473V/

I would not be at all suprrised if additional information (including the invites) only gets sent out by snail mail with H class shareholders as the only recipients. After all, why would they want to send out invites to those pesky i shareholders who the management intend to dilute into oblivion and then delist the shares (unless prevented in doing so by FCA/UKLA)?

Meanwhile, I see that Investors Chronicle have picked up on the story. Good stuff!
https://www.investorschronicle.co.uk/ne ... ifference/

BusyBumbleBee
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Re: Over the Edge

#466005

Postby BusyBumbleBee » December 15th, 2021, 11:26 am

timbo003 wrote:Another RNS issued yesterday at no one is watching o'clock
https://www.investegate.co.uk/edge-perf ... 47586473V/

Thanks - the wonderful way that VCT directors use the English language is beautifully illustrated by this sentence in the RNS
Invitations to participate in the Webinar are being sent out imminently."

A promise for the future is brought into the present.

The frightening thing is that the majority of VCT investors seem unable to listen to a contrary view to that of the directors.

127tolmers
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Re: Over the Edge

#468577

Postby 127tolmers » December 26th, 2021, 3:05 pm

Why does Glick bother with a tiny VCT and retail shareholders who like good corporate governance? Is Sir Peter Bazalgette, "independent" director of EPVCT a limited partner again in this second fund?

https://www.uktech.news/funding/edge-in ... e-20211123

London-based VC firm Edge Investments has raised £85m to invest in start-ups in the creative economy, which includes companies in areas such as virtual reality (VR), adtech and content creation.

The investment round was led by the British Business Bank, contributing £50m via its Enterprise Capital Funds programme. The UK government-owned business development bank aims to increase the supply of equity capital to early-stage, high-potential UK companies. It’s the British Business Bank’s second capital injection in an Edge Fund, investing £24m in the Edge Creative Enterprise Fund in 2015.

The investment comes at a time when the creative economy is one of the fastest-growing sectors in the world. It has a value of over $2.2bn and comprises 11 per cent of the overall UK economy.

Edge’s Create the Future fund has attracted investment from a group of entrepreneurs, creatives and business leaders with a background in technology and intellectual property.

The list of investors includes sports and outdoor brand powerhouse Pentland Group; Tim Steiner, founder of Ocado; independent live music promoter Simon Moran; musician Gavin Rossdale; former Airbnb head of creative James Goode and many more.

Edge’s Create the Future will invest in businesses in the creative economy, especially in sectors such as edtech, virtual or augmented reality (AR / VR), adtech, content creation and distribution. It will provide initial investments of between £1m and £5m for each early-stage business and help drive their growth.

David Glick, CEO and founder of Edge Investments, said: “Creativity, art, education and culture, enrich and improve the quality of all our lives through their consumption and enjoyment, and through the technological advancements they inspire.”

Simon Andrews, chief investment officer at Edge Investments, said: “The Edge team has decades of experience as investors, advisors and operators in the creative economy that allows us to identify the most exciting companies in the sector and help them to deliver on their growth potential.”

Ken Cooper, managing director, venture Solutions at British Business Bank said: “By continuing our support of Edge and their second fund, we are helping to unlock successful financing and support of early-stage, high-potential businesses operating in the creative economy.”

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Re: Over the Edge

#468578

Postby UncleEbenezer » December 26th, 2021, 3:30 pm

127tolmers wrote:Why does Glick bother with a tiny VCT and retail shareholders who like good corporate governance?

Why bother with VCT tax breaks when the taxpayer is dishing out virtually-blank cheques directly to you?

Government support for 'creative' industries. Keep not just the plebs but the arts Establishment entertained on the government teat. Feed the mass-mediocrity and marginalise the new and challenging. You don't need to arrest the dissident whose work languishes unseen beneath an ocean of taxpayer-sponsored inanity.

timbo003
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Re: Over the Edge

#469267

Postby timbo003 » December 30th, 2021, 6:50 pm

ShareSoc's voting guidance for the forthcomimg meetings on January 17th is here:

https://twitter.com/ShareSocUK/status/1 ... 3079371783

https://www.sharesoc.org/sharesoc-news/ ... uary-2022/

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Re: Over the Edge

#470001

Postby CliffW8 » January 3rd, 2022, 6:01 pm

Further information about the independence of Sir Peter Bazalgette and his links to David Glick is in a Press release of 22 November 2021, by the British Business Bank https://www.british-business-bank.co.uk/press-release/edge-investments-first-close-at-85-million-of-target-100m-to-invest-in-the-creative-economy/ (which reported the £85million fund raise) and others including Sir Peter Bazalgette, the Chairman of ITV. However there was no mention that Sir Peter is (currently) also a director of Edge Performance VCT or that he is likely to be voted off the Edge Performance VCT board on 17 January 2022 when it finally restarts its AGM, adjourned in August 2021. Nor did Edge VCT mention this.

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Re: Over the Edge

#470705

Postby CliffW8 » January 6th, 2022, 6:11 am


127tolmers
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Re: Over the Edge

#473381

Postby 127tolmers » January 15th, 2022, 8:03 pm

AGM & GMs on Monday. Should be an interesting meeting.

Last requisitioning shareholder letter

IMPORTANT LETTER TO EDGE PERFORMANCE VCT SHAREHOLDERS 9 January 2022
URGENT ACTION REQUIRED by 10.00am on Thursday 13 January

Voting irregularity alert, please check your vote

We have documentary evidence from over 20 shareholders that David Glick, your Manager, has access
to your supposedly secure password to vote your shares on the Edge VC sponsored CP platform. He
has sent unsolicited and unsecured emails to shareholders with this information plainly visible.
This is a clear breach of the integrity of the current vote. Not only is this a misuse of your records, but
is also a breach of data protection (GDPR) laws. We will be writing to the FCA and the UK Information
Commissioner with our findings.

If you voted your shares on this platform, please check that your vote corresponds to your
instructions. If you find any discrepancies, please notify info@sharesoc.org as soon as possible.
If you voted by mail or by email directly to the registrar, your voting instructions should be OK.

Sadly, this is yet another example of appalling, self-centred governance by the Manager and his
“poodle” Board. This follows on from the disenfranchisement of 86% of shareholders (73 million I
class shares) from their own AGM. This is our third and final ShareSoc Edge VCT Campaign letter.

THE TIME HAS COME TO WIND UP THE VCT AND GET YOUR MONEY BACK

Your Manager and Board have fed you half-truths and have been
scaremongering. Here are the real facts.
• There is NO risk of loss on tax reliefs if you vote to wind up the VCT. There is a well-trodden
path followed by other VCTs.
• The proposed new board is highly experienced in VCTs and hold a significant number of H
shares, much MORE than the current board. They have NO other financial interest in winding
up the company beyond the return of their own money at full value alongside everyone else.
6.4% of H Class shareholders signed our requisitions who have the same interest as you.
• The proposed new board has no plans to use H Class funds to reimburse I Class shareholders.
• Shareholders have never been informed of Sir Peter Bazalgette’s past and current directorships
and his links to the Edge Manager. He was a founder limited partner of the Edge Creative
Enterprise Fund LP in 2015, is a limited partner in the recently announced Edge’s Create the
Future LP and sits on the advisory panel of Edge VC. With such inherent conflicts of interest, it
is quite difficult to view him as an “independent” director with oversight of the Manager’s
performance. When he was proposed as director, were you made aware that the original
Mirriad investment which lost your VCT £2.6m had Sir Peter Bazalgette as its chairman and
David Glick on the board?
• The Edge Manager (EIL) has a bad track record in VCTs. The Edge (non) Performance VCT has
lost £38m of shareholder cash over the last 15 years. Your manager asserts he is a great
investor. Really?
• If you sell your H share in the market today you will get 100p and will have had 42p in
dividends over 10 years, a less than stellar 4% pa return.
• Your H share trades at a huge 73p discount to the 173p NAV (43%). The ShareSoc Edge VCT
Campaign offers you the chance to access this NAV quickly and at full value.
• Your Board sold 90% of your H class Unity shareholding to create £6.5m of distributable
reserves (see 17 November 2021 accounts filed at Companies House but never sent to you).
Why? Because it would have shown that you could have received a 55p dividend from the
profits on your investment. Instead, the cowardly Board used your distributable reserves to
buy out and thus prevent the I shareholders (who had lost half their money) from voting.
• H class shareholders got no 55p dividend in December and now face a further delay.
• David Glick never mentions his failed investments in the H class (the complete write-offs of
Lean Forward, Hoop, Antidote Creations, the original Mirriad investment, Intent HQ and the
50% loss on Coolabi). He just crows about his few successes.
• He has already taken £17m in fees out of the VCT despite losing £38m of VCT investors’ money.
• The H class portfolio is mature with 64% in cash and 22% in readily realisable quoted
companies. This is the right and unique time to wind your VCT up. The VCT is subeconomic
and, with its planned exit track record, will struggle to raise new money.
• Your Low-Risk option is to vote to close the VCT and get your money back.

It is your money and your choice alone; do you want to get the majority of your
investment back within the next few months undiscounted, and the rest quite
soon after April 2023 or do you want to be locked in for at least 5 more years?

We urge you to vote and recommend you vote as follows:
AGM: FOR resolutions 1, 2, 4 and 5. AGAINST 3, the re-election of Sir Peter Bazalgette.
COMPANY GM: AGAINST resolutions 1 and 2 (the re-election of Terry Back and Sir Aubrey Brocklebank) and FOR
resolutions 3, 4, 5 and 6.
SHAREHOLDER Requisitioned GM: VOTE FOR ALL resolutions: this would result in a changed board.

Please complete and scan or photo the form on the back and then email it to Registrars@city.uk.com. Time is
of the essence: you only have until 10am on Thursday 13 January to have your vote registered.
If you have already voted, and now wish to change your votes, just complete and email the form on the back as
above: add in your covering email “Please note: These Voting instructions supersede any previous instructions
from me”. Or if you voted electronically, you can log back into http://proxy-edge.cpip.io if you wish.

The Board and Manager’s proposition is much less clear than ours. The Board has promised dividends and
buybacks. Can you believe them? Buybacks were promised two years ago and have not materialised. Even now
the Board does not say at what discount it will conduct the buybacks or at what size. Your shares will not be
bought back at full net asset value but at a large discount. Bear in mind that a buyback is actually very beneficial
to the Manager due to the way the performance fee is calculated. In our opinion, we expect the amount of the
dividend to be enough to trigger the Manager’s 19% performance incentive fee and also that it will be declared
in such a way to ensure that it is double counted in the calculation of monies due to David Glick’s company. This is
why we believe a shareholder friendly board is now required.

Significantly, the Board put nothing substantive forward regarding strategy. Is the VCT going to fund raise and, if
so, when and how? Without it, the Board has previously confirmed that the VCT is sub-economic (the cost cap
may be increased once again, as previous boards have done). In our opinion, a fund raise by the manager will not
be well received by retail investors and IFAs in the market due to the shocking historic underperformance of the
planned exit classes. Any further fund raise would further extend the life of the VCT by at least another 5 years
and lock you in. It is quite clear, in our view, that the VCT is currently managed by and for the benefit of the
Manager, without effective challenge by the Board on behalf of shareholders. This has got to change.
We would prefer to get our money back for our own use (possibly then reinvesting it with a new VCT manager
with a long-term successful track record and getting fresh upfront tax reliefs).

ShareSoc supports this campaign and encourages you to vote for the changes outlined. ShareSoc is a well-respected and independent organisation that supports individual shareholders and campaigns for a better
environment for individual investors. ShareSoc believes that the Edge VCT Board is possibly the worst example of
corporate governance it has seen, see https://www.sharesoc.org/campaigns/edge-vct-campaign/ for
more info.

The proposed directors, Richard Roth and Robin Goodfellow, are willing to discuss their plans with shareholders
and can be contacted via info@sharesoc.org or please call Richard Roth on 07788 190182.
This letter has been produced by the ShareSoc Edge VCT Campaign on behalf of the Shareholder Requisitioners

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Re: Over the Edge

#474240

Postby timbo003 » January 18th, 2022, 10:40 pm

The much delayed Edge VCT AGM and accompanying General meetings were held on Monday 17th January 2022 at the offices of Simons Muirhead Burton (The Company’s Solicitors) which are located near to Tottenham Court Road tube station. The meeting was due to start at 10:00, but was delayed by about 30 minutes as the company secretary had tested Covid positive. As it happened the delay was quite convenient as it enabled the so called Requisitioners (AKA ShareSoc EDGE Performance VCT action group) the opportunity to forewarn the Edge VCT Chairman that they were going to call for an adjournment of the meeting on the grounds that were serious errors in the (unaudited) accounts, the subsequent payment of the final dividend to I class shareholders was illegal and the cancelling of the I share class should be reversed. The reserves in the accounts should be audited by an independent auditor before being reissued and the meeting should then be reconvened with the appropriate invitees/attendees (both H class shareholders and I class shareholders).

The meetings kicked off at around 10:30, there were around 8 - 10 ordinary shareholders present including the Requisitioners. Other attendees included representatives from the Manager, the Registrars and the Company’s solicitors. Significantly the Company’s Legal Counsel sat with the Board on the top table, sandwiched between the Chairman Terry Back (TB) and the newly appointed NED Peter Bazalgette (PB).

The AGM was the first meeting on the agenda and when the Chairman asked for any questions at the beginning, Cliff Weight (ShareSoc) proceeded to read a prepared statement from the ShareSoc action group which called for the adjournment of the meeting. A debate followed regarding the validity of the request with the Chairman arguing that the shortfall in the I class reserves had been rectified, but with the Requisitioners (Robin and Richard) insisting that the current objection was based on an additional error in the H class reserves which only came to light recently largely due to the delay in issuing the accounts to shareholders. The Chairman stated that the BOD would look into the potential error, but he was not prepared to adjourn the meeting. There was then another debate on whether the chairman would declare the voting results provisional until the outcome of the further investigations into the newly raised issue. After consulting with Legal Counsel the Chairman stated that he would use his discretion to declare the voting results announced immediately following the meeting as final.

We then ploughed through questions on the resolutions with numerous questions being asked about the independence of the BOD and in particular PB and his poor attendance record at board meetings.

There were questions on the delays in issuing the accounts and the subsequent AGM and the motivation behind the delays, the timings of the payment of dividends and how the timings just so happened to maximise the quantum of the performance incentive fee payment to the management to the detriment of shareholders.

Somewhat bizarrely the Chairman fielded the questions on PB, without referring to PB or handing the question over to PB himself , Throughout most of the other questions PB’s only contribution was to whisper to the Chairman through his face mask some suggestions for responses to the questions that he didn’t like, these suggestions that were usually short, somewhat disrespectful and designed to curtail any further debate.

To summarise I would say that the responses to the questions were in some cases pre-prepared and in general unsatisfactory or inaccurate and when the Chairman was boxed into a corner, further debate was usually curtailed following a cue from PB.

The Chairman had directed at the beginning of the meeting that all questions should go to a poll. Fortunately the Registrar were well prepared for this, so there was a ten minute break whilst poll cards were completed and collected before moving onto the second meeting, the resolutions for which would normally have been included in the Annual General meeting (i.e. the first meeting) and it is still not clear to me why this was not the case.

The second meeting proceeded at a similar pace to the first meeting with numerous questions comments on the independence of the directors.
There were also questions concerning the resolutions enabling future fund raising and share buybacks.

The BOD gave assurances that any fund raising would have to be substantial, unlike the last one (four years ago) which only raised £600k, thus effectively extending the life of the H shares for a further 5 years for very little benefit.

The BOD has a poor record on buybacks, but the Chairman repeated the intention to use the facility and on the likely discount for buybacks, he noted that they should take into account the policies of other VCTs, although would not commit to a % figure for the discount, nor would he commit to returning at least half of the profits from recent disposals to shareholders, despite that being a stated intention in the prospectus.

At the end of the second meeting we had another 10 minute break to complete and collect poll cards before continuing with the third meeting (the Requisitioned General meeting).

Many of the topics that needed to be discussed had already been aired at the previous two meetings, but a few new topics came up including: why does the manager have access to individual shareholder voting codes and individual shareholder votes? Given that the votes against the appointment of some of the existing directors are likely to exceed 20%, will the BOD comply with good corporate guidance and conduct a consultation with shareholders and then state how they intend to address the issue? How can the BOD have confidence in the manager’s abilities given the very poor historical record?

The Chairman stated that he would look into the issue of the Managers access to the voting codes and that the BOD would comply with good corporate governance guidelines if there were a 20% vote against the incumbent directors. He was never going to have a good response to the question concerning the poor investment record of the manager, the best he could do was to say that the people employed by the investment manager had changed over the years, but he had no way of wiggling away from the fact that David Glick has been in charge throughout the lifetime of the VCT.

After the Chairman had closed the final meeting we had access to the unpublished poll results which were later published by RNS (see link below). It now remains to be seen whether the BOD stick to their commitments made at the meeting and policies stated in the prospectus, or whether they revert to form and continue to disappoint.

https://www.investegate.co.uk/edge-perf ... 17197208Y/

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Re: Over the Edge

#474471

Postby BusyBumbleBee » January 19th, 2022, 3:01 pm

We are so grateful to Timbo, Tolmers and others for their work here. in his fantastic report on the "The much delayed Edge VCT AGM" TIm says this
timbo003 wrote:The Chairman stated that he would look into the issue of the Managers access to the voting codes and that the BOD would comply with good corporate governance guidelines if there were a 20% vote against the incumbent directors. He was never going to have a good response to the question concerning the poor investment record of the manager, the best he could do was to say that the people employed by the investment manager had changed over the years, but he had no way of wiggling away from the fact that David Glick has been in charge throughout the lifetime of the VCT.


to repeat " the BOD would comply with good corporate governance guidelines if there were a 20% vote against the incumbent directors. "

i.e. they are only concerned about governance if 20% if shareholders care.

Hope the meeting was recorded and that the recording can be sent to the FCA as a compliment (I don't think) - on the way that the FCA manages governance and looks after small investors.

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Re: Over the Edge

#521705

Postby timbo003 » August 11th, 2022, 5:17 pm

There was a dreadful portfolio update from Edge yesterday which was issued at no one is watching o’clock
https://www.investegate.co.uk/edge-perf ... 04346273V/

It has very recently come to the Board's attention that Festicket Limited ("Festicket"), one of the Company's portfolio companies, is currently experiencing headwinds and is in discussions with its advisers and stakeholders as to how these can best be navigated.

The outcome of these discussions is not yet clear, and the Board will continue to monitor
its investment in Festicket and update the Company's Shareholders on this matter as appropriate. The outcome of these discussions may, however, significantly impact upon the value of the Company's holding in Festicket.

As at 29 July 2022, the Company's holding in Festicket was valued at £4.69m, representing approximately 35.6% of the total net asset value of the Company.



That £4.69m corresponds to about 41 pence per share of the EDGH NAV and it is probably reasonable to assume that the value of Festicket will now be severely marked down, - a conservative estimate might be 50%, which would be around 20p/share off the NAV of EDGH.

In addition to this downgrade of Festicket, there has been a recent dramatic fall in the share price of AIM quoted Audioboom (EDGH’s largest investment by value), which has fallen in price from 2200p/share at the date of the last accounts (Feb 28th 2022) to around 700p/share today (Aug 11th 2022). It appears from the Annual Report that they had not disposed of any of their holding in Audioboom as of June 29th when the share price was 1110p, which was when the Manager’s report in the Annual Report was signed off. So assuming they are still hanging on with their original stake in Audioboom, the decline in the Audioboom to 700p/share will correspond to a reduction in EDGH NAV/share of about 37p/share.

The reduction in valuation in Festicket and Audioboom could together lead to a reduction in EDGH NAV of around 57p/share since the last set of accounts and the statement in the accounts concerning the VCT’s relative performance is beginning to look rather stale:

Performance in the H share class continues to be outstanding. A series of successful investments and realisations by the Investment Manager has propelled the Company to the top of the Association of Investment Companies All-Funds 5 year share price total returns table.

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Re: Over the Edge

#521870

Postby UncleEbenezer » August 12th, 2022, 11:02 am

timbo003 wrote:
It has very recently come to the Board's attention that Festicket Limited ("Festicket"), one of the Company's portfolio companies, is currently experiencing headwinds and is in discussions with its advisers and stakeholders as to how these can best be navigated.

Re: Festicket.

For some years[1] I've held a tiny stake in a ticketing startup. Regarding covid/etc, I asked them a little over a year ago (June 2021):

I've just read in the annual report of a VCT, their holding in Festicket is marked down by 56% from £2289k to £1011k. Covid blamed, of course.

That looks on the face of it like a comparator for [company]. Would a similar revaluation be appropriate?


Quoting from the reply:

For anyone associated with the live entertainment industry, Covid has been tough. I can't speak in detail about Festicket's valuation as I'm not well-versed in their business model. Given that they operate exclusively in the festivals market, one would assume that they've suffered as much if not more than others in the ticketing industry, over the last 18 months.

That being said, across our customer base at least, sales have picked up again and there is no doubt that the appetite is there for live events to return strongly. Hopefully the same will be true for festivals.


Last November, the same VCT (I forget which) reported another £700k drop in Festicket. So this has been known for a while!

[1] Going back far enough to have raised a similar comparator question when Time Out bought Y-Plan at a price well below expectations from (IIRC) Octopus Titan.

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Re: Over the Edge

#522790

Postby robtom91 » August 16th, 2022, 9:54 am

One of my companies operates in the same space as Festicket. I've always wondered why Edge invested in them - the market is cutthroat and low margin and they never got the strategy right (to profit from ancillaries, as was their selling point, you had to own the festivals, so as to have monopoly selling and buying power).

They've been losing money hand over fist and haven't raised in a while. I would be surprised if they didn't fail - there is no logic for further investment.

36% of Edge's NAV is quite significant - might it be that they invested ~5% of their NAV, but have marked it up through later fundraising rounds - i.e. that without these markups, Edge would have posted worse performance?

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Re: Over the Edge

#526769

Postby timbo003 » September 1st, 2022, 10:38 am

Confirmation this morning that Festicket is worth zero
https://www.investegate.co.uk/edge-perf ... 59049195X/

It is interesting to note that the Edge representative on The Festicket BOD (Davis Fisher) resigned on 15th July
https://find-and-update.company-informa ... ng-history

But Edge did not issue an RNS regarding the troubles at Festicket until 10th August when they also stated that the value of Festicket in the VCT portfolio as of July 29th was £4.69m
https://www.investegate.co.uk/edge-perf ... 04346273V/

It has very recently come to the Board's attention that Festicket Limited ("Festicket"), one of the Company's portfolio companies, is currently experiencing headwinds and is in discussions with its advisers and stakeholders as to how these can best be navigated.

The outcome of these discussions is not yet clear, and the Board will continue to monitor
its investment in Festicket and update the Company's Shareholders on this matter as appropriate. The outcome of these discussions may, however, significantly impact upon the value of the Company's holding in Festicket.

As at 29 July 2022, the Company's holding in Festicket was valued at £4.69m, representing approximately 35.6% of the total net asset value of the Company.


The buyback occurred on 8th August at a price which appears not to take into account any write down in the value of Festicket
https://www.investegate.co.uk/edge-perf ... 27493987V/

The Company announces that on 08 August 2022, it purchased 866,515 of the Company's own Ordinary Shares of 10p each, representing approximately 7.5% of the issued share capital at a price of 102.06 pence per share for cancellation.


Shurly shome mishtake :shock:


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