Amati Global Investors

AIM VCT plc 

(LSE:AMAT) 

Fund Information 

 

Management Team

Amati Global Investors is an independent specialist fund management business with £440m AUM and based in Edinburgh. It focuses on UK small and mid-sized companies, with a universe ranging from fully listed constituents of the FTSE Mid 250 and FTSE Small Cap indices, to stocks quoted on the Alternative Investment Market ("AIM"). The fund management team is made up of Dr Paul Jourdan,

David Stevenson & Anna Macdonald (supported by analyst Dr Gareth Blades) and collectively they manage all Amati funds with a combined experience of over 65 years in smaller company investments. 

Investment Objective

The objective of the Company 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 in order

that shareholders may benefit from the tax reliefs available.

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Amati AIM VCT Prospectus Offer 2019/20 and 2020/21 
Seeking £25m with an over-allotment facility of £20m

 

Offer Open

Expected around end October 2019

Tax Years

2019/20 and 2020/21

Minimum Investment

£4,000

Offer Cost 

Existing Shareholders and for subscriptions through a financial intermediary 1%

For other subscribers 3%

 

Apply to the Offer

If you are considering applying for this Offer, you should read the Prospectus which contains the full terms and conditions and the subscription form.  It is recommended that you seek professional advice.  To register your interest in receiving a copy of the Prospectus and subscription form once published or to talk to our sales team about the offer in more detail, please contact Amati Global Investors on 0131 503 9115 or send an email to: info@amatiglobal.com

Top Ten Holdings     

 

(as at 31 July 2019)

AB Dynamics 8.7%

TB Amati UK Smaller Cos Fund 8.7%

Learning Technologies 6.3%

Keywords Studio 6.1%

Ideagen 5.1%

GB Group 4.9%

Frontier Developments 4.4%

Tristel 3.8%

Quixant 3.7%

Craneware 3.0%

Facts about our Top 10

 

(as at 31 July 2019)

  • 8 out of the top 10 holdings are dividend paying

  • The top ten qualifying holdings represent 49% of the value of the portfolio providing a strong set of core holdings

  • The weighted average market capitalisation of the qualifying portfolio is £360m

  • Two of the top ten holdings have in excess of £1bn market capitalisation

KEY REASONS TO INVEST

 

Subscribers for New Shares benefit from the strength and depth of the maturing portfolio of investee companies built up over many years which largely determine the ability to pay dividends for which new investees immediately qualify

The Manager has a strong track record of being able to identify the most promising early-stage growth companies on AIM and has been recognised through numerous industry awards over recent years for UK smaller company investment;

The Non-Qualifying element of the Company's portfolio is held in a single investment, TB Amati UK Smaller Companies Fund (for which management fees are rebated to the Company), which means that the cash surplus to short term requirements can be productively employed through investment in small and mid-sized UK companies in a portfolio managed by the Manager;

     

The dividend policy of the Company is to pay tax free dividends twice a year, dividends in recent years have represented 5% to 6% of year end NAV (equivalent to 6.9% to 8.3% tax free yield after and taking into account the full 30% initial income tax relief available to subscribers, and adjusting for the maximum up-front costs of 3%);

The Company maintains a share buyback programme which, subject to the availability of distributable reserves and the Company’s cash requirements, provides liquidity for Shareholders who wish to sell their Shares;

The Manager brings together an award winning team of highly experienced investment professionals focusing on smaller companies listed on AIM and the Main Market of the London Stock Exchange. The fund managers and staff at the Manager and the Directors have significant shareholdings in the Company, aligning their interests with the interests of the Shareholders. 

Fund Details

Launch Date:  January 2001
As at 31 July 2019:

Total Assets £137.59m

Number of Holdings 66

NAV per share 154.48p

Ongoing Charges Figure 1.96% 

Sedol: B641BB8

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Commentary as at 31 July 2019

Boris Johnson became the UK’s Prime Minister on 24 July and his ‘do or die’ rhetoric in regards to Brexit has led to further weakness in Sterling. In the first days of Mr Johnson’s premiership, his cabinet and adviser appointments have made a hard Brexit seem a more likely outcome. Whilst the UK has underperformed other markets and looks relatively cheap on many valuation measures, the spectre of further uncertainty is not constructive. On the other hand, we are seeing more corporate activity as overseas and private equity bidders take selective advantage of share price weakness. The VCT rose 1.09% against the benchmark which rose 0.85%, bringing year to date performance to +16.63% (benchmark +9.72%).

There was a strong recovery in accesso when they announced that the board had received bids for several parts of the business. Shares rose over 53%. Other longstanding holdings also recovered well from a prolonged sell-off, including Quixant and Learning Technologies Group (“LTG”). Quixant issued an update which said that, as previously guided, trading would be more weighted to the second half than usual. This seemed to reassure investors. LTG issued a strong update and, together with director share buying, this boosted the shares to deliver a return of nearly 17% for the month. The Contents and Services division, where performance had been concerning, showed a good recovery and strong pipeline.

Unfortunately, there was significant weakness in LoopUp shares, which fell over 50%. Their acquisition of Meeting Zone has not been without its problems and management also pointed to lower conference call volumes as their clients saw reduced activity in their end markets. We participated in three fundraisings in July. Polarean Imaging has a proprietary imaging device for the visualisation of pulmonary function in MRI scans, and came back to the market for a further fund raising, which we supported. A recent Capital Markets Day showed the device can be used to diagnose disease signatures with even greater accuracy than first believed. This means Polarean may be able to partner with pulmonary drug companies to identify patient groups suitable for targeted treatments.

We took a new position in the fund in Velocys, a company that has installed new management, proved its core technology (production of sustainable jet fuel and clean diesel from waste), and signed significant partners in Shell and British Airways. Finally, we bought Sosandar, a rapidly growing online retailer of women’s fashion, to support their next leg of growth.

Risk warnings 

Your attention is drawn to the following risk warnings which identify some of the risks associated with a Venture  Capital  Trust (VCT): The value of your investment in a VCT and the income from it can go down as well as up and you may not get back the amount invested, even allowing for the tax breaks. An investment in a VCT may not be suitable for all investors and you should only  invest if you understand the nature of and risks inherent in such an investment and you should seek professional advice before effecting any such investment. Past performance isn’t a guide to future performance. Performance data is intended for existing investors and should not be relied upon by potential investors in making investment decisions. Changes in legislation may adversely affect the value of the investments. The levels and the basis of the reliefs from  taxation  may  change in the future. 

 

You should  seek your own professional advice on the taxation consequences of any investment. An investment in a VCT carries a higher risk than many other forms of investment. A VCT’s shares, although listed, may be difficult to realise.  VCT share trading is not particularly active, meaning that it may be difficult to sell VCT shares and most VCTs trade below their net asset value (NAV). Details of the buy-back policy are included in the prospectus. You should regard an investment in a VCT as a long term investment, particularly as regards a VCT’s investment objectives and policy and the five year period for which shareholders must hold their ordinary shares to retain their initial income tax reliefs. The  investments made by VCTs will normally be in AIM listed companies or in other companies whose securities are not publicly traded or freely marketable and may therefore be difficult to realise and investments in such companies are  substantially riskier than those in larger companies. If a VCT loses its Inland Revenue approval tax reliefs previously obtained may be lost. The levels of charges for VCTs are generally higher than for unit trusts and open ended investment companies. Amati AIM VCT can borrow money to make further investments. This is commonly referred to as gearing. The risk is that when this money is repaid by the VCT the value of these investments may not be enough to cover the borrowing and interest costs and the VCT will make a loss. If the VCT investments fall in value, gearing will increase the amount of this loss. The more highly geared the VCT, the greater this effect will be.

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The value of investments can go down as well as up and you may get back less than you invested. 
We provide information about investments but do not offer personal advice and recommendations. We do not hold responsibility for assessing the suitability of an investment or evaluating the risks of such an investment for you.  If you are in any doubt as to these risks or the suitability of an investment.  Y
ou should seek independent advice.

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