Invesco Perpetual AiM VCT plc

Invesco Perpetual AiM VCT plc

Invesco Perpetual AiM VCT plc

This document is for Professional Clients only

and is not for consumer use

Invesco Perpetual AiM VCT plc

In June 2004, Invesco Perpetual launched the Invesco Perpetual AiM

VCT plc. The Company recently passed its three-year anniversary. This

update provides commentary on the Company and explains why we

believe it remains an attractive investment for existing shareholders

and new investors alike.

Invesco Perpetual AiM VCT plc

Invesco Perpetual AiM VCT plc is a

Venture Capital Trust (“VCT”) whose

objective is to provide a tax-free dividend

return to shareholders, primarily through

the realisation of capital gains, while

maintaining the capital value of the shares.

The Company is managed as a VCT to

enable shareholders to benefit from the

tax reliefs available. Both dividends

received and profits from the disposal

of VCT shares by investors are

exempt from tax. The Company is also

managed to maximise the potential for

capital growth.

The Company invests primarily in

businesses which are listed on AIM, the

Alternative Investment Market of the

London Stock Exchange. The portfolio

consists of a broad range of companies,

well spread by stock, sector and size. The

share prices of these businesses are likely

to be driven far more by what they

actually achieve rather than by broader

market conditions.

Commitment to a seven-year life

The Board is of the view that this Company

should remain an attractive investment

vehicle for its full seven-year life, to 2011,

at which time shareholders will have the

opportunity to vote for its continuance.

To emphasise its longer term attractions,

the Board expects the Company to pay a

minimum 5p per share dividend until 2011.

This 5p tax-free dividend is equivalent to

7.4p for a higher-rate taxpayer.

Longer term investment management

With the relatively illiquid nature of AIM

stocks that form the investable universe

for the manager, the Board believes that

it is advantageous to shareholders for the

portfolio to be managed with the longer

term in mind. As a result, it is not currently

the Board’s intention to buy back shares

in the market for cancellation. The Board

believes that a secondary market will

develop as investors become more aware

of the tax reliefs available to buyers of VCT

shares traded in this market. Therefore,

existing shareholders wishing to realise

their investment before the planned

continuation vote in 2011 will have the

opportunity to do so in the

secondary market.

Finding opportunities in the AIM market

Launched in 1995, the Alternative

Investment Market (AIM) is the London

Stock Exchange’s international market for

younger and smaller, growing companies.

AIM specifically meets their needs by

giving them access to equity capital and a

share trading facility. AIM has developed a

well-refined role as a source of finance for

entrepreneurial businesses and its success

has led it to evolve into ‘the world’s

leading stock market for young,

growing companies’. 1

A particular requirement of a VCT is

that 70% of the money raised has to be

invested into VCT qualifying investments

within three years. Because of the

manager’s good access to deal flow, the

funds raised in tax years 2003/4 and

2004/5 were invested relatively quickly

and comfortably exceed the minimum.


From local to global. The rise of AIM as

a stock market for growing companies.

September 2007. S Arcot, J Black,

G Owen.

2 Invesco Perpetual AiM VCT plc

Invesco Perpetual AiM VCT plc

Investment manager

The manager, Andy Crossley, has actively

invested in the AIM market for over 10

years and as a Director of Baronsmead

VCT plc, he has direct experience of the

sector. His primary consideration in

managing the Company is investing in

the right businesses, rather than basing

decisions on the macro environment. He is

stock selective rather than sector selective

and the Company is currently invested in a

broad range of companies.

Andy is a member of our highly regarded

UK Equity team and has over 20 years’

experience specialising in smaller

company investment. 2 He has been

active in investing in the AIM market since

its inception in 1995. He has built up an

extensive network of mainstream and

specialist broker contacts active in the

AIM market, enhancing the Company’s

prospects for access to a strong deal flow.

Andy has an instinctive preference for

small, relatively early-stage companies

with a strong emphasis on upside reward.

Andy’s investment approach lends itself

harmoniously to investing in the AIM

market. He tends to invest relatively

small amounts across a wide range of

companies, to achieve the appropriate

balance between risk and reward for the

overall portfolio. For example, his

portfolio currently avoids ‘consumer’

exposure as Andy is concerned over high

levels of personal debt.

The Board

The Board is chaired by Julian Avery and

all directors have extensive experience of

the AIM market. This leads to active and

constructive meetings with the manager

and underlines the characteristics of

the Company and its paramount duty to

shareholders through the management

of a quality portfolio, a commitment to the

longer term and the payment of dividends.

Benefits of investing in the Invesco

Perpetual AiM VCT plc

– Tax-free dividends, paid half-yearly

– Capital gains are tax-free

– No need to report dividends or gains on

tax returns

– Portfolio diversification

Investing in the Invesco Perpetual AiM

VCT plc

Shares can be purchased through the

London Stock Exchange.

Please contact our Broker Services Team

if you require any further information on

0800 028 2121


Source: Invesco Perpetual as at 30

September 2007.

3 Invesco Perpetual AiM VCT plc

Important information

This document is for Professional Clients only and is not for consumer use.

The value of investments and any income will fluctuate (this may partly be

the result of exchange rate fluctuations) and investors may not get back the

full amount invested. Past performance is not a guide to future returns.

Telephone calls may be recorded.

Where Invesco Perpetual has expressed views and opinions, these may change.

There can be no guarantee that the Trust’s VCT status will be achieved

within the three year limit. A failure to meet qualifying requirements could

result in the Trust losing its VCT status and thus investors losing the tax

relief previously obtained.

Although the Ordinary Shares will be listed on the Official List and admitted

to trading on the London Stock Exchange there may not be a liquid market

in the Ordinary Shares and Shareholders may have difficulty in selling them.

Investment in AIM-traded and other unquoted companies may involve

greater risk than investment in companies traded on the main market of

the London Stock Exchange. In particular, smaller companies often have

limited product lines, markets or financial resources and may be dependent

for their management on a smaller number of key individuals. In addition,

the market for securities in smaller companies is often less liquid than that

for securities in larger companies, bringing with it potential difficulties in

acquiring, valuing and disposing of such securities.

Proper information for determining their value or the risks to which they are

exposed may also not be available. Smaller companies are less likely to have

multinational markets for their products or services than large companies

and, as a result, may be more exposed to national economic cycles rather

than global economic cycles.

Invesco Perpetual is a business name of Invesco Asset Management Limited

Authorised and regulated by the Financial Services Authority

Perpetual Park, Perpetual Park Drive, Henley-on-Thames, Oxfordshire RG9 IHH, UK

Registered in England No. 949417

Registered address: 30 Finsbury Square, London EC2A 1AG, UK


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