Triple Point has announced the launch of the Venture Fund, a new share class in Triple Point VCT 2011 plc.
The Venture Fund’s challenge led investment approach draws on the reach and expertise of the Triple Point Venture Network. It encompasses a range of corporate innovators, growth consultants and entrepreneurs and has a base of some 5,000 innovative companies, which have the potential to help in excess of the 100 large corporations already working with the Network.
The Venture Fund looks to maximise financial returns by investing in innovative businesses already working with the Network, that have, or soon will, contract with large corporates to help them solve some of the key business issues they face.
By focusing on growth businesses that have effectively established a market fit for their products and services with large corporates, Triple Point believes that the Fund addresses one of the most significant risks of early stage venture capital.
Each investee company must have a UK focus and significant addressable target market, with an innovative product or intellectual property. The Fund targets businesses with a strong management team, aligned appetite for growth, and a clear pathway to long-term profitability. The Venture Fund will typically expect to take 5-20% equity stakes in these businesses.
The Venture Fund is targeting a substantial deployment of investment funds over a 12 to 24 month timeframe. It is seeking to raise an initial £15m with otential for a further £15m over-allotment facility and will offer investors a portfolio of 20+ innovative companies which the managers believe have significant growth potential and the possibility of generating 5x to 10x money multiples.
Triple Point seeks to align its interests with investors and maximise returns by limiting costs. The Venture Fund’s annual running costs are capped at 3.5% of net asset value (NAV). The Fund targets a 3p per share dividend in the first two years and up to 5p per share per annum in the years thereafter, subject to successful realisations.
The Venture Investment team is led by Ian McLennan a partner of Triple Point and supported by a team experienced in venture capital investing. Triple Point, with over £900 million in assets under management has a strong track record in tax efficient VCT and EIS investing, and a 14 year history of delivering target returns for its clients. This will be Triple Point’s 19th VCT fund raise and the firm has supported 44 EIS and 18 VCT Share Classes in that time, with £250m of successful VCT and EIS exits.
In 2017 VCTs raised £728 million in aggregate, the second highest amount since the VCT market’s inception and 30% up on the previous year. This probably reflects increasing restrictions on pension investments, and strong and early demand for VCTs is expected again this year.
Belinda Thomas, Head of Sales and Investor Relations at Triple Point, commented: “The Venture Fund builds on our strong track record of early stage investing with a distinctive approach which matches the propositions and solutions offered by innovative, growth business with the challenges faced by large corporations. The Venture Network already has a track record of success in this area, having helped a range of blue-chip businesses source innovative companies to help them address key issues. By investing in growth businesses once they have secured such contracts, the Venture Fund seeks to mitigate the risk of venture investing and helps to underpin investors’ returns.”