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Northern VCT's on the block

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barchid
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Northern VCT's on the block

#268686

Postby barchid » December 3rd, 2019, 7:31 am

I note today that Mercia, EIS specialists, previously backed by Woodford and still 20pc held by Barnett are attempting an accelerated book raise of £30m to take over Northern vct's.
The rns was out at 07.00 this morning.
I guess no more dashes to Newcastle any more with the application form and cheque then ?!
Not exactly a vote of confidence in the vct market though is it ?

scotia
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Re: Northern VCT's on the block

#268734

Postby scotia » December 3rd, 2019, 10:06 am

November 2018 Baronsmead VCTs sold to Gresham House.
December 2019 Northern VCTs sold to Mercia Asset Management.
So the two stalwarts of the VCT industry have handed over the baton. Why?
Have the new VCT regulations made it too difficult to run a successful VCT?
And will the newcomers make a positive difference? It would appear not, as far as Baronsmead is concerned, over the past year.

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Re: Northern VCT's on the block

#268758

Postby Kidman » December 3rd, 2019, 11:29 am

I am somewhat reassured by the following quote from the NTN RNS:-

The NVM VCT management team, led by partners Tim Levett and Charlie Winward, will transfer to Mercia and will constitute a new VCT division within the Mercia group.


https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/NTN/14332259.html

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Re: Northern VCT's on the block

#268769

Postby Kidman » December 3rd, 2019, 11:56 am

Reading the Mercia AM interim report released this morning, I notice that they invested in Voxpopme which was also in the recent Northern 3 VCT interim report.
I therefore assume that NVM and Mercia have been co-operating for some time which I see as a good sign.
There will come a time when Tim Levett and others want to retire so this NVM/Mercia transaction could give us VCT shareholders better management company continuity.

I do have one thought though, will Mercia try to take over another VCT manager to fulfil their ambitions of growing AUM? In a way I have been surprised that we haven't seen more consolidation as several VCT managers are small companies spun out of big groups and some will have succession issues.

https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/MERC/14332142.html

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Re: Northern VCT's on the block

#268783

Postby flyer61 » December 3rd, 2019, 12:46 pm

Owners of VCT management Companies have realised that under the new rules you need really talented individuals to make and monitor the investment selections. They do not grow on trees or come cheap and you probably need a higher head count. Also if they were really good they would be building Companies themselves.

Ergo lets monetise our business whilst we still can. There are likely to be just as many failures as success stories under the new investing regime.

Buyer beware!

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Re: Northern VCT's on the block

#268791

Postby james188 » December 3rd, 2019, 1:26 pm

We could do with the detail being fleshed out more (first opportunity probably the NVT AGM in a couple of weeks), but I can see the potential positive aspects following this change. I agree with comments by others that this sort of consolidation is inevitable. I wonder if Mercia will be allocating some of its existing staff to the new VCT division. We will also see over time whether all the key staff remain now that the NVM Private Equity partners have cashed in their chips.

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Re: Northern VCT's on the block

#268819

Postby barchid » December 3rd, 2019, 3:16 pm

Clearly Mercia have access to EIS co's which could, when a little more mature, be placed in a VCT, but digging behind the numbers at Mercia up to a couple of months ago Woodford had almost 25% & Barnett almost 30%, what sort of board is happy with that type of arrangement ?
Actually the type of board where the Chair of Mercia was also the Chair of WPCT, less than ideal. After an inordinately long time Mercia decided that this was not such a good idea so Searle left, she was certainly not underpaid the time she was at Mercia though !
So I doubt I'll be involving myself in their VCT's now, which out of the generalist managers, given Albion are rather niche, it leaves Maven (who I've invested with from their outset) & BSC who are good but with somewhat higher fees than most.
I subscribed for some Maven today as the 2 funds are only looking for £7.5m each, which I think is realistic in these conditions. Bill Nixon is a no nonsense manager, imo, and I have confidence in him not to over extend the funds.

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Re: Northern VCT's on the block

#268860

Postby scotia » December 3rd, 2019, 5:01 pm

Kidman wrote:I am somewhat reassured by the following quote from the NTN RNS:-

The NVM VCT management team, led by partners Tim Levett and Charlie Winward, will transfer to Mercia and will constitute a new VCT division within the Mercia group.


https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/NTN/14332259.html


I seem to remember that this also occurred with Baronsmead. But how long will the old management team stay? The rationale behind the takeover(s) seems to be some synergy between their current EIS investments and the VCT investments - which suggests the VCT management team will be encouraged or even constrained to consider investments which may support the EIS business. I suspect that before long, there will be changes in the teams, and possibly changes in investment philosophy. Perhaps I'm being overly pessimistic, but I don't think Northern will be on my buy list this year.

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Re: Northern VCT's on the block

#268865

Postby Kidman » December 3rd, 2019, 5:11 pm

scotia wrote:I seem to remember that this also occurred with Baronsmead. But how long will the old management team stay?

In the Baronsmead deal, two of the most senior people, Andrew Garside and Sheenagh Egan did not transfer but are retained as consultants for three years. Perhaps that is the length of their earn out?
In the case of Mercia/NVM, I would guess that the senior people who have transferred are subject to golden hand-cuffs and/or an earn out in the future so they will stay until that is all cleared.

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Re: Northern VCT's on the block

#268872

Postby BusyBumbleBee » December 3rd, 2019, 5:28 pm

Kidman wrote:In the case of Mercia/NVM, I would guess that the senior people who have transferred are subject to golden hand-cuffs and/or an earn out in the future so they will stay until that is all cleared.

If past experience is any guide (and I have been in that situation twice) : those locked in with "Golden Hand-cuffs" tend to lose interest as they are forced into the new company mould and do just enough to make sure they themselves don't lose out and then they are gone.

Time I think, to drop the DRIS and then to unwind my position in NVT

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Re: Northern VCT's on the block

#269122

Postby yorkshirelad1 » December 4th, 2019, 7:44 pm

barchid wrote:I note today that Mercia, EIS specialists, previously backed by Woodford and still 20pc held by Barnett are attempting an accelerated book raise of £30m to take over Northern vct's.
The rns was out at 07.00 this morning.
I guess no more dashes to Newcastle any more with the application form and cheque then ?!
Not exactly a vote of confidence in the vct market though is it ?


Shareholder circular e-mailed out this afternoon:
https://nvm.co.uk/investor-area/vcts/n2vct/
http://nvm.co.uk/wp-content/uploads/Chairman-letter-FINAL.pdf
RNS: https://www.investegate.co.uk/northern-2-vct-plc/gnw/notice-of-gm/20191204160000H7451/

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Re: Northern VCT's on the block

#275757

Postby yorkshirelad1 » January 7th, 2020, 1:46 pm

Northern VCT shareholder newsletter (Jan 2020) received this this morning (hardcopy, grrrrr..... why can't they use email like they do for other things, happily it's available online)
https://nvm.co.uk/news/newsletters/ (pdf)
Some interesting things in there, haven't read it in full yet, but mentions share offer due 13 Jan, and a seminar on 20 March
Nothing (at the time of writing) recent (since 31 Dec) on RNS: https://www.investegate.co.uk/CompData.aspx?code=NTV&tab=announcements

yorkshirelad1
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Re: Northern VCT's on the block

#275771

Postby yorkshirelad1 » January 7th, 2020, 2:40 pm

yorkshirelad1 wrote:Northern VCT shareholder newsletter (Jan 2020) received this this morning (hardcopy, grrrrr..... why can't they use email like they do for other things, happily it's available online)
https://nvm.co.uk/news/newsletters/ (pdf)


(snipped)

Super impressed: I sent an e-mail to the Asst Co Sec at NVM/NVCT2 about their sending hardcopy newsletter and had a very swift and informative reply back: very impressed!

UncleEbenezer
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Re: Northern VCT's on the block

#275854

Postby UncleEbenezer » January 7th, 2020, 9:22 pm

yorkshirelad1 wrote:Super impressed: I sent an e-mail to the Asst Co Sec at NVM/NVCT2 about their sending hardcopy newsletter and had a very swift and informative reply back: very impressed!

Good for you.

Did the reply offer to stop sending paper stuff?

All my VCTs are now in a nominee account, so no paper here. Thank you for posting and alerting me to these docs (I'll see RNS notices, but likely nothing else unless it's posted here).

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Re: Northern VCT's on the block

#275935

Postby yorkshirelad1 » January 8th, 2020, 11:29 am

UncleEbenezer wrote:
yorkshirelad1 wrote:Super impressed: I sent an e-mail to the Asst Co Sec at NVM/NVCT2 about their sending hardcopy newsletter and had a very swift and informative reply back: very impressed!

Good for you.

Did the reply offer to stop sending paper stuff?

All my VCTs are now in a nominee account, so no paper here. Thank you for posting and alerting me to these docs (I'll see RNS notices, but likely nothing else unless it's posted here).


My VCTs are direct holding (not nominee) (I did this several years ago when I had previously held the VCTs is a nominee and the registrar was deducting dividend tax at source, when that was applicable, becuase the registrar claimed they couldn't see the recipient was an elegible/qualifying tax exempt entity i.e. they only saw the nominee not me: I did try and push the point but it was easier to revert to direct holding). For Northern 2 VCT, I get e-mailed for annual and interim reports (from registrar Equiniti/shareview), but dividend vouchers come as hardcopy.

FYI, the reply from NVM was:

NVM wrote:With regard to Ecommunications, I get the impression that you have a Shareview portfolio account and have signed up to email bulletins from Equiniti. The Ecommunication facility offered by each of our VCTs relates to the publication of half-yearly and annual reports rather than all statutory or marketing publications. The newsletter and VCT seminar invite are NVM publications and the VCTs permit us to use data from the Register of Members to send these out.


For me, that was a sound reply, and I'm happy with that. I suppose I could opt out of communications from NVM, but they are not heaps of paper, and they're very good and useful. I suppose I could put my VCTs back into a nominee, but I quite like the direct contact with the VCTs (I like all the direct communications), there's more interesting communications from the VCTs than I get from holdings in Another-FTSE100PLC etc (and the FTSE100PLC's comms are all usually available on the RNS, which is less so the case with the VCTs).

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Re: Northern VCT's on the block

#276716

Postby UncleEbenezer » January 11th, 2020, 2:28 pm

OK, in today's post, the Northern offer docs and application form from Equiniti. In contrast to the investor update I didn't get. I guess that means I'm still visible to Equiniti but not to NVM?

The puzzle here is, how do Equiniti have my new address? I moved house in August and have mail redirection active, but this wasn't redirected, it was sent directly to me at my new address. But some months before moving I transferred all my VCT shares[1] into a nominee account, so I didn't bother to tell the registrars about my move!

[1] Non-VCT shares were always in the SIPP or ISA, never certificated.

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Re: Northern VCT's on the block

#276879

Postby yorkshirelad1 » January 12th, 2020, 4:55 pm

UncleEbenezer wrote:OK, in today's post, the Northern offer docs and application form from Equiniti. In contrast to the investor update I didn't get. I guess that means I'm still visible to Equiniti but not to NVM?

The puzzle here is, how do Equiniti have my new address? I moved house in August and have mail redirection active, but this wasn't redirected, it was sent directly to me at my new address. But some months before moving I transferred all my VCT shares[1] into a nominee account, so I didn't bother to tell the registrars about my move!

[1] Non-VCT shares were always in the SIPP or ISA, never certificated.


Yup me too, got paper (yesterday/Sat) and e-mail Friday
Here's the NVM info (I had an Equiniti e-mail): https://nvm.co.uk/investor-area/fundraise2020/
Here's the RNS: https://www.investegate.co.uk/northern-2-vct-plc/gnw/publication-of-prospectus/20200110143000H3075/

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Re: Northern VCT's on the block

#277107

Postby shootingstar » January 13th, 2020, 4:30 pm

clearly all 3 VCTs are similar but does anyone have any view on which is the best? I have been looking a bit today into performance fee hurdles and understand that Northern 1 is 15%, Norther 2 is 12% and northern 3 is 14.2%. On that basis, Northern 1 may be seen as a bit superior? but i don't quite understand why the numbers are set as high as they are? maybe mercia will try to adjust them over time

NV3 seems to have a bit more AIM. Checking the dividend yields then Northern 2 is possibly the highest, Northern 1 closely behind with northern 3 perhaps quite a bit lower?

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Re: Northern VCT's on the block

#277228

Postby Vulgaris » January 14th, 2020, 7:19 am

Application cheque cashed immediately, which is unusual for Northern, who usually sit on a pile of them, send out a note of provisional acceptance, then encash.

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Re: Northern VCT's on the block

#277277

Postby BusyBumbleBee » January 14th, 2020, 9:59 am

Vulgaris wrote:Application cheque cashed immediately, which is unusual for Northern, who usually sit on a pile of them, send out a note of provisional acceptance, then encash.
but it's now Mercia and is the first of many changes to come (does the 'Merc' come from Mercenary?)


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