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Mobeus mergers

Sophisticated and complex high-risk tax-sensitive investments in small companies: handle with care
sinterklaas
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Mobeus mergers

#650016

Postby sinterklaas » February 28th, 2024, 5:53 pm

Presumably the influence of Gresham House, but I note the Mobeus VCTs are seeking to merge – pairing off and resulting in two fatter yet hopefully more streamlined VCTs…

https://www.londonstockexchange.com/new ... s/16353816

AndrewInDevon
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Re: Mobeus mergers

#650065

Postby AndrewInDevon » February 28th, 2024, 8:51 pm

Shouldn't the 2 British Smaller Companies Ltd (BSC and BSV) do the same...they now follow the same investment strategy but have double the overhead cost?

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Re: Mobeus mergers

#650069

Postby londoninvestor » February 28th, 2024, 8:56 pm

AndrewInDevon wrote:Shouldn't the 2 British Smaller Companies Ltd (BSC and BSV) do the same...they now follow the same investment strategy but have double the overhead cost?


It's useful for investors to have 2 similar VCTs available: after 5 years, you can sell your holding in one, reinvest in the other, and claim the income tax relief on the reinvestment.

With only one VCT, you'd need to stay out for 6 months after the sale in order to get the relief on the reinvestment.

I guess this may be why Mobeus is consolidating 4 VCTs into 2, and not into a single entity. (If I remember a shareholder event from a few years ago correctly, Beringea mentioned it as a reason for not merging the two ProVens.)

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Re: Mobeus mergers

#650160

Postby AndrewInDevon » February 29th, 2024, 10:15 am

londoninvestor wrote:
AndrewInDevon wrote:It's useful for investors to have 2 similar VCTs available: after 5 years, you can sell your holding in one, reinvest in the other, and claim the income tax relief on the reinvestment.


I never thought of that! But then I am new to VCTs....sounds like a plan! So sit tight for at least 5-years on the original investment then at the next BSC offer, sell one fund and buy the other to claim another 30% tax credit....assuming BSC are still performing OK in terms of dividends. Love the beauty of that!

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Re: Mobeus mergers

#650167

Postby londoninvestor » February 29th, 2024, 10:34 am

AndrewInDevon wrote:
londoninvestor wrote:


I never thought of that! But then I am new to VCTs....sounds like a plan! So sit tight for at least 5-years on the original investment then at the next BSC offer, sell one fund and buy the other to claim another 30% tax credit....assuming BSC are still performing OK in terms of dividends. Love the beauty of that!


Right. In practice you don't quite get a 30% benefit compared to just holding onto what you had, because you sell the "old" VCT somewhere below its NAV, and you buy the "new" one at NAV plus offer costs. But many VCTs buy back from you at a 5-10% discount to NAV, so generally it's going to work out with a profit.

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Re: Mobeus mergers

#650574

Postby Kidman » March 1st, 2024, 5:37 pm

Another reason for not consolidating down to just one VCT is to allow larger investments.
As each VCT is limited in investment size by the rules, having two VCTs making similar investments allow a double size overall holding.

I have been informed that this is the reason that the two Baronsmead VCTs will not merge into one.
On the other hand I did wonder whether we could see a Baronsmead+Mobeus merger but supect that is now not the case.

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Re: Mobeus mergers

#668318

Postby cprof » June 10th, 2024, 4:48 pm

RNS out today, proposal to merge 4 into 2.

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Re: Mobeus mergers

#668402

Postby Kidman » June 11th, 2024, 10:00 am

A pity they aren't also merging the Baronsmeads into the resulting two Mobeus VCTs.
Greater spread of holdings and less administrative costs going forward.

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Re: Mobeus mergers

#668572

Postby sinterklaas » June 12th, 2024, 9:34 am

Kidman wrote:A pity they aren't also merging the Baronsmeads into the resulting two Mobeus VCTs.
Greater spread of holdings and less administrative costs going forward.


Not sure they need a greater spread… Aren't Baronsmeads already a 100+ holdings sprawl?


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