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Thoughts on the Foresight VCT offer?

Sophisticated and complex high-risk tax-sensitive investments in small companies: handle with care
bernie
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Thoughts on the Foresight VCT offer?

#281243

Postby bernie » January 30th, 2020, 8:50 pm

What do people think of the Foresight VCT offer? I looked at the other thread on the forum and don't understand the link with Woodford.

Looking at Trustnet, it seems to have done well over the last 3 years, but has lagged over the last 5 years:

https://www.trustnet.com/factsheets/t/v ... esight-vct

If Foresight is a bad bet, what else could I consider?

scotia
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Re: Thoughts on the Foresight VCT offer?

#281278

Postby scotia » January 30th, 2020, 11:17 pm

There's a write-up on Foresight at the Wealth Club Site:-
https://www.wealthclub.co.uk/venture-capital-trusts/foresight-vct/?cpn=ba1e05f3-e098-eeba-a57b-28de7702a1ec&cpn_override=1&utm_medium=cpc&utm_source=bing&utm_campaign=Providers%20-%20VCT%20%5BM%5D%20BA&utm_content=Foresight%20VCT&utm_term=foresight%20vct#
which gives some indication as to how Foresight's investment policies have changed over the years.
Although it is wise to assume that past performance is not a reliable guide to the future, I would emphasise that this is now particularly true for VCTs given the recent rule changes which have required investments to be made in early stage companies.
A few general comments - the initial net (discounted) charge is 2.5% - on the high side. The buy back policy operates at a discount of 10% to NAV (on the high side). It is difficult to know how closely this buy-back tracks the 10% figure, due to the infrequent publication of the NAV. The last quoted NAV appears to be 76.7p at 30th September, and they bought back shares at a gross price of 67.75p on 1st October. The VCT has traditionally targeted a 5p Dividend per year, however in their half-year report (published 30th August) the board now expects to target a (lower) dividend of 5% of NAV per annum, with special dividends when successful portfolio exits are made.
I'm afraid that the recent changes to VCT investment conditions have made VCT purchases a bit of a lottery. Some contributors to this board have decided to give all of the current VCT offers a miss. I have decided to cut back my new VCT purchases - and will be balancing them with sales of VCTs which have passed their 5-year hold. I currently hold a wide variety of VCTs - but so far, no Foresights.

Kidman
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Re: Thoughts on the Foresight VCT offer?

#281334

Postby Kidman » January 31st, 2020, 10:35 am

I used to hold a variety of Foresight VCTs, all of which I had ended up with by changes of management from other managers.

I am glad to say I have now disposed of them all and I would never consider Foresight for any future purchase.
It is a big company who have some good products but VCTs are a small part of their business and I don't think they have the skills to do well especially with recent rule changes.

barchid
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Re: Thoughts on the Foresight VCT offer?

#281404

Postby barchid » January 31st, 2020, 2:18 pm

Scotia
I am with you on the best discounted Foresight fee over NAV being rather rich at 2.5%
I realise it is not hugely important in the long run, the purchases and exits being far the most critical, and the ongoing fees pretty important as well, but it does give an investor a fair idea of the greed of the manager.
When you could, this tax year as an existing holder, have bought Amati on 1%, Pembroke B & Maven's offers on 1.25% and even Albion "only" charging 1.5% on their earlybird offer over NAV, 2.5% for Foresight does rather go down like a lead balloon.
On the topic of new issues it always amuses me how some VCT's price starts climbing before the offer opens, a good example of this "phenomenum" is Unicorn. The issue was announced on 6 Jan with the shares at 141p the trading day before the announcement 142p on the 6 Jan. Monthly NAV is announced as usual mid month, on 14 Jan as 173.6p, share rose from 141 to 143 on this then remained the same price until Jan 20 when it rose to 144p,
and with a gentle rise almost every day since then is now 149p.
Presumably the offer will be open any day now the shares have risen about 5% !
Given that VCT's are supposed to be for sophisticated investors I find this game rather demeans the companies that do it, yet many do !

Karellan
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Re: Thoughts on the Foresight VCT offer?

#281440

Postby Karellan » January 31st, 2020, 3:39 pm

I have whittled away all of my Foresight holdings and hold very few residual shares. For me it was never a decent contributor to my general wealth however it did have an excellent line in company reports with great artwork and pictures.

Vulgaris
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Re: Thoughts on the Foresight VCT offer?

#281539

Postby Vulgaris » February 1st, 2020, 12:41 am

They tended to be in the bottom half of the performance tables under the old rules. It is hard to see why they should do better, in absolute terms, under the new ones.

Kidman
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Re: Thoughts on the Foresight VCT offer?

#281559

Postby Kidman » February 1st, 2020, 10:14 am

bernie wrote:If Foresight is a bad bet, what else could I consider?

I've just received the ProVen offer in the post and would rate them far preferable to Foresight.

Interesting to see that they are trawling their old shareholder lists as I sold my last ProVen some time ago.
Today's post also brought my Wealth Club commission rebate cheque and statement.

BusyBumbleBee
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Re: Thoughts on the Foresight VCT offer?

#281573

Postby BusyBumbleBee » February 1st, 2020, 11:47 am

Kidman wrote:I've just received the ProVen offer in the post ...

and that cost them (charged back to shareholders some way or t'other): £1? ... £2? ... £3 ... £?
and the response rate will be: 1% ... 2%... 3%... ??

Put another way a response rate of 1% and a cost of distribution of £2 equals £200 per new shareholding.

As Mark Twain said say "there's gold in them thar hills" (for 'hills' read 'VCTs') and the people who sold the tools to the would-be gold miners probably made the most money.


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