Puma’s latest limited-life VCT has been awarded a five-star rating by Bestinvest.
The planned-exit Puma VCT 10 offers a conservative strategy while retaining the tax breaks that reward investors for the high-risk investment vehicle.
It hopes to raise £30m and closes on April 4. The annual management charge is 2 per cent.
The VCT will wind up after five years, and investors can expect their capital returned within the following year at no discount to NAV, Bestinvest says.
Using the same strategy as the previous nine VCTs, the managers have a “strong focus” on capital preservation, Bestinvest says.
Puma invests in established unquoted VCT-qualifying companies with good cash-flow and tangible assets such as property, or revenue streams which can be subject to a first charge.
Bestinvest says: “Deals will be structured using senior secured loans, ordinary and preference shares and other fixed income securities. These deals are structured to allow for greater security, so that if the underlying portfolio companies are not performing as expected, Puma will be able to liquidate assets that these investments are secured against to recover monies.”
The managers will not invest in companies where the loan will be greater than 65 per cent of the secured assets.
The investments generate a yield for the payment of dividends, targeted at 6p annually starting in the second year of the VCT’s life.
VCTs offer tax-free capital gains as well as tax-free dividends and 30 per cent income tax relief.
The minimum investment is £5,000, with an initial charge of 3 per cent and an early bird discount of 1 per cent before 3 January.
Puma is part of the AIM-listed Shore Capital Group which has more than £900m of assets under management, including £130m in VCTs. Shore Group has offices in London, Liverpool, Edinburgh, Guernsey and Berlin.
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