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Elderstreet is a leading venture capital investor which has been managing investments in unquoted UK companies since 1998. Elderstreet Draper Esprit VCT Investor Guide Push Doctor Digital Health Push Doctor is Europe’s largest online GP marketplace StreetTeam / Verve Soſtware Leading peer-to-peer sales and markeng soſtware for live entertainment IXL Premfina Fintech Insurance broking soſtware s-a-a-s soluon IESO Digital Health IESO delivers one-to-one clinically led online therapy Kapvo Hardware and Soſtware Cloud connected online collaboraon tool for whiteboards Droplet Compung Soſtware Soſtware to run PC applicaons on any operang system Elderstreet Draper Esprit VCT – An Award Winning Generalist VCT Elderstreet is co-invesng with the Draper Esprit Plc and EIS funds which will bring access to larger deals in companies that enjoy higher revenues and which operate in high growth sectors. These more developed companies can scale very quickly and have the potenal to IPO, exit, or aract further funding rounds more quickly than lower revenue companies. Draper Esprit has been the highest rated EIS by Tax Efficient Review in 2014, 2015, 2016, 2017 Since joining Draper Esprit in late 2016 the VCT has raised a further £18 million in 2017 and commied to six new investments totalling £5.7 million. Two of these investments have completed and the other four are subject to receiving HMRC Advanced Assurance. Together with other syndicate funds these companies raised a total of £59 million.

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Page 1: Elderstreet Draper Esprit VCT Investor Guide · Elderstreet Draper Esprit VCT Investor Guide Push ... The value of an investment can fall as well as rise and investors may not get

Elderstreet is a leading venture capital investor which has been managing investments in unquoted UK companies since 1998.

Elderstreet Draper Esprit VCTInvestor Guide

Push Doctor Digital HealthPush Doctor is Europe’s largest online GP marketplace

StreetTeam / Verve SoftwareLeading peer-to-peer sales and marketing software for live entertainment

IXL Premfina Fintech Insurance broking software s-a-a-s solution

IESO Digital Health IESO delivers one-to-one clinically led online therapy

Kaptivo Hardware and SoftwareCloud connected online collaboration tool for whiteboards

Droplet Computing SoftwareSoftware to run PC applications on any operating system

Elderstreet Draper Esprit VCT – An Award Winning Generalist VCT Elderstreet is co-investing with the Draper Esprit Plc and EIS funds which will bring access to larger deals in companies that enjoy higher revenues and which operate in high growth sectors. These more developed companies can scale very quickly and have the potential to IPO, exit, or attract further funding rounds more quickly than lower revenue companies.

Draper Esprit has been the highest rated EIS by Tax Efficient Review in 2014, 2015, 2016, 2017Since joining Draper Esprit in late 2016 the VCT has raised a further £18 million in 2017 and committed to six new investments totalling £5.7 million. Two of these investments have completed and the other four are subject to receiving HMRC Advanced Assurance. Together with other syndicate funds these companies raised a total of £59 million.

Page 2: Elderstreet Draper Esprit VCT Investor Guide · Elderstreet Draper Esprit VCT Investor Guide Push ... The value of an investment can fall as well as rise and investors may not get

Key Features Investment into an existing mature portfolio Investors gain immediate exposure to an existing portfolio. As at 30 June 2017, the Company had distributable reserves of £8.5 million which is the equivalent to 4 years of dividends at 3 pence per Ordinary Share using the number of Ordinary Shares in issue at 30 June 2017 (or 2.5 years if the Offer is fully subscribed at £20 million).

Experienced manager with strong track recordElderstreet Investments is one of the oldest VCT managers having made its entry into the VCT market in 1998. The Manager has previously won the 2014 VCT Investment Company of the Year Awards, and VCT Fund Manager of the Year in 2009 and 2010 organised by the Growth Company Awards.

Target tax-free income of around 5% It is the Board’s objective to maximise dividends to Shareholders, subject to liquidity, the availability of sufficient distributable profits, capital resources and VCT regulations, and to target a dividend return of 3 pence per annum (equivalent to a 6.7% tax free return based on the Estimated Offer Price after factoring in initial tax reliefs). Further details on the potential yields are shown in the later tables.

Offer Price*(gross of tax relief)

Target annualdividend

Tax free yield per annum

Grossed up yield per annum

40% taxpayer 45% taxpayer

63.6 2.0p 3.1% 5.2% 5.7%

63.6 3.0p 4.7% 7.9% 8.6%

63.6 4.0p 6.3% 10.5% 11.4%

* Using an Estimated Offer Price of 63.59p. The June 17 NAV of 61.6p has been adjusted down by the 1.5p dividend payable in September 2017 and for the issue costs of 5.5%. No forecast or projection should be implied or inferred.

Tax Relief at 30%For the current tax year to 5 April 2018, eligible investors can receive:• 30% income tax relief on the initial amount invested • Tax-free dividends • Tax-free capital gains on the VCT shares

Potential YieldThe following table gives an illustration of potential returns to Ordinary Shareholders, assuming a dividend of either 2 pence, 3 pence or 4 pence per annum is paid, and the equivalent taxable yield grossed up for a taxpayer paying 40% or 45% tax on his income. Dividends of 3 pence per Share have been paid in 2017.

Annual Cumulative DividendsHistoric Dividends The VCT has paid a total of 99 pence in dividends since inception. These include special dividends when meaningful exits have occurred – these can be seen in the chart below as red bars.

20

Annu

al (p

ence

)Cum

ula�ve (pence)

15

10

5

0

1009080706050403020100

1998 99 00 01 02 03

Annual (LHS)Cumula�ve (RHS)

04 05 06 07 08 09 10 11 12 13 14 15 16 17

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Portfolio AllocationThe Company will continue to invest predominantly in a diversified portfolio of companies, with a particular emphasis on smaller unquoted companies. Draper Esprit is one of the leading venture capital investors involved in the creation, funding and development of high-growth technology businesses with an emphasis on digital technologies.

Going forward, this average initial deal size is likely to rise to £1.5 million with a focus on the following technology sectors:

The charts below show the split of the VCT by value at 31 June 2017 The chart on the left shows legacy investments such as engineering and services businesses which will be replaced by investments in the above sectors over time. The projection is based on all the committed deals closing.

LegacyPortfolio sector split – by value

ProjectionPortfolio sector split – by value

U�lity Services 6.4%

Other 1.0%

Digital0.8%

So�ware10.5%

Engineering23.1%

Cash58.0%

So�ware16.4%

Digital8.3%

U�lity Services 5.7%

Other 0.9%

Engineering 20.6%

Cash48.1%

Consumer TechnologyCompanies with exceptional growth opportunities in international markets that are underpinned by new consumer facing products, innovative business models and proven execution capabilities.

Enterprise TechnologyCompanies developing the software infrastructure, applications and services that drive productivity improvements, convenience and cost reduction for enterprises.

HardwareCompanies developing differentiated technologies that underpin advances in computing, consumer electronics and other industries.

HealthcareCompanies leveraging digital and other technologies to create new products and services for the health and wellness markets.

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RAM Capital Partners LLP 4 Staple Inn, London WC1V 7QHT: 020 3006 7530 E: [email protected]

FOR IFA ENQUIRIES

Risk Warning: This is a financial promotion issued and approved by Elderstreet Investments Ltd, who are authorised and regulated by the Financial Conduct Authority. FCA No.148527. Prospective Investors should note that past performance should not be seen as an indication of future performance. The value of an investment can fall as well as rise and investors may not get back the amount originally invested. Your capital is at risk. Therefore you should only make investments in the VCT which you can afford to lose without having any significant impact on your overall financial position or commitments. Taxation levels, bases and reliefs may change if the law changes and the tax benefits of products will vary according to your personal circumstances; independent advice should therefore be sought.

Performance Since its launch in 1998 the Company has produced a total return since launch (cumulative dividends paid up to 30 June 2017 plus NAV) of 159.1 pence per Ordinary Share, a 98.9% tax-free uplift on the net investment (of 80p per share) of Shareholders who invested at inception.

The Company has raised further capital predominantly in the same share class, with the exception of a 2005 offer of C Ordinary Shares which were subsequently converted into Ordinary Shares. The performance of each of these fund raisings is shown below, including initial tax reliefs. It should be noted that every issue over 2 years old is showing a positive return excluding the tax reliefs.

Tax year ofInvestmentending 5th April

Rate of

InitialTax relief

Initial investment

per Ordinary Share after tax relief

Cumulative cash dividend

per Ordinary Share

NAV per Ordinary Share

(June 17 unaudited)

Total return per Ordinary Share

(unaudited)

Increase on investment

without initial tax reliefs

Tax-free increase on net

investment

1998 20% 80.0 97.5 61.6 159.1 59% 99%

2005* 40% 60.0 66.5 41.2 107.7 8% 79%

2006 40% 41.3 68.0 61.6 129.6 88% 214%

2008 30% 64.4 61.0 61.6 122.6 33% 90%

2009 30% 52.3 54.5 61.6 116.1 55% 122%

2010 30% 56.3 51.5 61.6 113.1 41% 101%

2011 30% 54.6 47.5 61.6 109.1 40% 100%

2012 30% 49.5 43.5 61.6 105.1 49% 112%

2013 30% 47.3 39.5 61.6 101.1 50% 114%

2015 30% 50.3 16.5 61.6 78.1 9% 55%

2016 30% 49.7 6.5 61.6 68.1 -4% 37%

*The dividends and NAV have been adjusted to reflect the merger of the C Share at a rate of 0.6691.

Sample ExitThe VCT continues to win awards and was runner up in the Growth Investor Awards Exit of the Year 2015. The most recent award followed a successful exit from the portfolio of Wessex Advanced Switching Products, a manufacturer of military and aerospace switches and lighting products, an investment which returned an IRR of over 30%.

DETAILS OF THE OFFER EARLY BIRD INCENTIVE

Minimum Investment£6,000 per investor and applications should be in multiples of £1,000.

Maximum Investment£200,000 per investor in VCTs, in total, for the current tax year.

Initial Charge3.0% of the amount subscribed.

Annual CostsTotal running costs (excluding performance fees) capped at 3.5%. Any excess will be borne by the Manager and Administrator through a reduction in their fees.

For applications received: • before 4.00 pm

on 14 February 2018 1.0% extra shares

• before 4.00 pm on 1 March 2018 0.5% extra shares

Further information regarding the management of the VCTs and the performance fees are set out in the Prospectus