Selling certificated VCTs

[rabbit]

I have a number of certificated VCTs that I wish to sell (all well past the 5 year tax relief qualifying period). Does anyone have any suggestions as to reliable, efficient and cost effective brokers who might be able to deal with these? I'm registered with HL and Wealth Club but I know HL no longer offer this service and I don't think Wealth Club do either.

Alternatively does anyone have experience (good or bad) of VCT buybacks?

[Snowbadger]

Hi Rabbit.
I have used Jarvis X-O in the past for sales of Baronsmeade and Octopus AIM. They gave an excellent service. Baronsmeade I'm pretty sure was a buyback not sure about Octopus. At the moment I am struggling to sell Molten VCT. Placed the sale about two months ago but they are limiting their buybacks. The next one is in November on a first come basis. Not a fault of Jarvis who have kept me well informed.

Good luck,

SB.

[UncleEbenezer]

I am struggling to sell Molten VCT.
SB.

I hesitate to poke my avuncular nose into this menagerie, but I wonder if you'd clarify that? Do you mean there's no market at all, or just that the price is (badly) wrong?

Re: the OP and HL, I've held a fair few VCTs in a H-L Vantage account for some years, and have added to them since H-L stopped their VCT-offer-subscription service. I think you *could* still use them to sell (by lodging your shares into your account there, then selling), but it's not a service I'd recommend. Online VCT trading isn't available, so you have to phone them and pay a correspondingly higher dealing charge.

Interesting timing, ahead of a budget that might affect VCT decisions.

[rabbit]

Interesting timing, ahead of a budget that might affect VCT decisions.

Thank you UE. It's not budget related (I hope Rachel Reeves has the good sense to leave the VCT world alone!). After five years of "retirement" I'm starting a new job shortly and may well decide to invest in some additional VCTs to offset a rising income tax bill, so I'm thinking about recycling some cash from my old ones.

[UncleEbenezer]

Interesting timing, ahead of a budget that might affect VCT decisions.

Thank you UE. It's not budget related (I hope Rachel Reeves has the good sense to leave the VCT world alone!). After five years of "retirement" I'm starting a new job shortly and may well decide to invest in some additional VCTs to offset a rising income tax bill, so I'm thinking about recycling some cash from my old ones.

Agreed, I don't see Reeves doing anything radical with VCTs. I expect the biggest likely effect will be on AIM, if she does or doesn't tinker with its IHT privileges, that could be a boost or a blow depending which side of priced-in expectations it falls.

What I meant was, unless you spend the money immediately, any VCT disposals potentially leave more of your pot outside a tax shelter. The budget might very well affect the value of doing that! But in your circumstances, I guess the total amount held in VCTs is perhaps a more important consideration.

[scotia]

I have a number of certificated VCTs that I wish to sell (all well past the 5 year tax relief qualifying period). Does anyone have any suggestions as to reliable, efficient and cost effective brokers who might be able to deal with these? I'm registered with HL and Wealth Club but I know HL no longer offer this service and I don't think Wealth Club do either.

Alternatively does anyone have experience (good or bad) of VCT buybacks?

I have been regularly using HL, with no problems. I post the share certificates (1st class, signed for) along with a Crest Transfer form (available on the HL site).
The Shares appear within a couple of days in my Fund and Share Account, and are ready to trade within a few days. There is no charge for the transfer. The shares can be sold by placing a telephone order. Some VCTs can be traded immediately, others must wait for a buy-back, which may occur every few months (or later !). The charge for the sale is 1% of trade value, with a minimum of £20 and a maximum of £50.
My latest sale was Maven 4 last week - it was sold immediately. The one before (in September) was British Smaller Cos - this required a wait for a Buy-Back.

[Snowbadger]

Hi everyone,

Here is the Molten policy on buy backs. Jarvis work fine for me and only charge £5.95.


Selling your Shares
If you would like to sell your shares please instruct your stockbroker to contact the VCTs broker Panmure Gordon. The VCT does not buy back shares directly from investors but has a buyback policy through the London Stock Exchange. A precis of the buyback policy is as follows.

The Company has from time to time bought back its Ordinary Shares for cancellation. The Board will agree the price at which such buybacks are undertaken which will not be more than 95.0% of the last published NAV for the Ordinary Shares although the Board may decide to buy back shares at their discretion at a larger discount subject to VCT regulations, liquidity and the Listing Rules.

Shareholders are reminded that the VCT’s ability to conduct share buybacks will depend on VCT qualifying conditions and/or the sufficiency of the cash and distributable reserves required for the VCT to purchase its own shares. Restrictions imposed by the VCT regulations have impacted distributions recently and, while this issue is expected to be temporary as further distributable reserves are expected to become available for distribution under the VCT rules on 5 April 2024 and 5 April 2025, may continue to do so over the next 18 months.

Regards,

SB.

[Snowbadger]

Hi Uncle,

I hesitate to poke my avuncular nose into this menagerie, but I wonder if you'd clarify that? Do you mean there's no market at all, or just that the price is (badly) wrong?

My last two sales with Jarvis went so smoothly and quickly that I was surprised that after almost two months nothing had happened. I spoke to them on Tuesday after a couple of weeks in France and they explained the situation. I had posted the sell online and awaited developments. They checked their sales ledger and had instructions dating back to April so while Nov doesn't sound too bad in the fuller context it would stop me investing with MVCT again ( that and the mediocre performance. )

Cheers,

SB.

[Boots]

I have used Interactive Investor for the three VCT sales I have made. The process was a bit of a mixed bag.

In all case I held certificates, so they were posted off to II with a simple form. The holding appeared in my Trading Account in a few days. However, attempting to sell them resulted in a failure - it seems II listing something in the Trading Account may not mean they have finished their process.

When I was finally able to offer them for sale there were three different outcomes. In the first case (Foresight Enterprise, in 2021) the sale seemed to go ahead, but I had a message saying there would be a delay. By the time I rechecked an hour later, it had all gone through.

The second and third case (Proven and Proven Growth & Income, 2022) my attempt to make the sales failed, with a message that they were not available to trade online. I was reluctant to pay the telephone trading price (£49 per trade at the time). I queried this and was told that I would need to use the telephone service for some VCTs, but I would only be charged the online trading price. I made the call. Proven Growth and Income went through straight away, whilst I was on the phone. The Proven holding did not have a buyer, so I went on the buyback list. That final sale was actioned a couple of months later.

In these three cases the sale costs were very reasonable.

[Kidman]

In the last couple of months I have sold two old VCT holdings, Baronsmead and Northern.

I sent the certificates and the Crest transfer forms, probably second class, to X-O (Jarvis) and they appeared in my account in one to two days of posting.
I entered a limit sell at a price a bit above the bid, sat back and waited.
In due course the buy-back came and the sale went through at the buy-back price.
No telephone calls, minimum effort and all for £5.95 commission and a postage stamp.

[MisterNick]

From my VCT portfolio, I have only ever sold via an Octopus Titan buy back

I am now looking to sell more Octopus Titan. I will also look to sell Maven 3 & 4, Proven VCT and G & I, Unicorn, and Hargreave Aim in the future.

i am thinking I would be best to go the X-O route ( I don't currently have an account).

When you say you "entered a limit sell at a price a bit above the bid", is "the bid" something that shows when you open an account, or does it correlate to something like the buy price at HL? Is a "bit above" about 1p?
Also, presumably there is a change when it goes ex-divi (28th Nov)

Any pointers would be appreciated.

[Kidman]

Opening an account with X-O was very easy and then they have a Crest transfer form on their wrbsite to download. Pop the completed form together with the certificate(s) in the post to them and very quickly they appear in one's account. Strictly speaking I don't think they are saleable until the transfer has been completed at the registrars which take a couple of days.

I then get the prices from the London Stock Exchange website and it will look something like 61p-63p, i.e. they are bidding 61p to buy from you. X-O appeared to only accept limit orders for VCTs so I put in something like 61.4p as I didn't want to sell straightaway at 61p. In other words, somewhere between bid and mid.

On the day of the buyback starting one can see the trades going through (on the LSE website) every so often all at the same price regardless of what limit one used. (I'm assuming that if one put too high a limit then it would not be bought back).

[MisterNick]

Opening an account with X-O was very easy and then they have a Crest transfer form on their wrbsite to download. Pop the completed form together with the certificate(s) in the post to them and very quickly they appear in one's account. Strictly speaking I don't think they are saleable until the transfer has been completed at the registrars which take a couple of days.

I then get the prices from the London Stock Exchange website and it will look something like 61p-63p, i.e. they are bidding 61p to buy from you. X-O appeared to only accept limit orders for VCTs so I put in something like 61.4p as I didn't want to sell straightaway at 61p. In other words, somewhere between bid and mid.

On the day of the buyback starting one can see the trades going through (on the LSE website) every so often all at the same price regardless of what limit one used. (I'm assuming that if one put too high a limit then it would not be bought back).

Thanks Kidman, I'll get moving on it today

[londoninvestor]

(I'm assuming that if one put too high a limit then it would not be bought back).

Last time I sold in a buyback (IGV), my order was slightly higher than the buyback price, but X-O called me and asked whether I would be happy to sell at the lower price. I don't think they would ever guarantee to do this, and obviously it depends on you answering your phone, but it's a nice part of the service.

For Titan specifically, the buyback price seems very predictable: last published NAV (adjusted for dividends) minus 5%. So you can set your limit just slightly below that.

There's a "risk" that some good news intervenes to increase the share price before the buyback, so that the market price crosses your limit and you end up selling into the market. That happened to me with one of the Albions I think - the price was lower than I would have got if I had used the next buyback, but obviously it was higher than the minimum I would have accepted, so no big deal.

[silentknight]

In the last two years I've sold ten VCTs through X-O with a slightly overpriced order and every time they've called me to check if I'll take the the buyback price. So as londoninvestor said, no guarantees but seems their standard procedure is to give you the option.

[Mainwaring]

I’ve used X-O too along the lines discussed. In addition following a phone call asking how they handled selling into buybacks, they asked me to send an email at the same time I logged the limit over bid sale instruction.

[Travel22]

Any views on when the next Pembroke VCT buy back might be ? Tried in November on a Limit Order but nothing ....

[scotia]

Any views on when the next Pembroke VCT buy back might be ? Tried in November on a Limit Order but nothing ....

The buy-back Calendar https://growthinvest.com/vct-buy-back-calendar/ states that the buy-backs of Pembroke are twice yearly, with the last buy back being on 16/9/24. It looks like you may have to wait until April 25 - as I did in April 23.