12/07/2010

Busy quarter for Baronsmead VCTs

Baronsmead VCTs have celebrated one of their most successful ever quarters, committing more than £20m in new investments since completing the over-subscribed joint fundraising of Baronsmead VCT 3 and Baronsmead VCT 4 in March 2010.

The joint subscription offer raised its target of £16m ahead of schedule and since then, Baronsmead VCTs have completed a run of new deals. Andrew Garside, fund manager said "VCTs have become more attractive to investors given their beneficial tax reliefs but there will always be a flight to quality. Baronsmead VCTs have been consistent performers, investing in quality opportunities and delivering returns for shareholders. We have one of the largest and most experienced VCT teams and we strive to support entrepreneurial ambition and deliver strong returns."

In April 2010, ISIS backed spinal implant distributor Surgi C with £4.4m of funds from the Baronsmead VCTs followed by a £0.5m investment in ILS, a portfolio company providing care at home services in Scotland. Also, in June, three further investments have been announced: Inspired Thinking Group, a marketing services business, gained acquisition finance of £3.2m; Nexus, an existing Baronsmead portfolio company raised £2m to make an acquisition within its field of vehicle rental; and finally, £4m has been invested in Getting Personal, the leading online retailer of personalised gifts.

In addition, since May 2010 ISIS has committed over £6m to five AIM traded businesses taking the total invested by Baronsmead VCTs over the past 3 months to £20.1m.

It has also been a busy time for divestments. Since October 2009 the Baronsmead VCTs have completed three profitable divestments from their unquoted private equity portfolios, which realised £20.5m at an average of 3.4 times the initial cost. The first was the sale of healthcare software business ScriptSwitch which delivered a money multiple approaching 4 times the investment. March 2010 saw the exit of care business Active Assistance delivering 2.8 times investment. The most recent realisation of the database marketing business Occam in June 2010 delivered 1.5 times.

Garside added "This is an excellent round of profitable divestments which has boosted the ability of the Baronsmead VCTs to continue paying attractive dividends. The new shareholders from the recent joint offer will also benefit from this dividend flow."