ProVen VCTs
The two ProVen VCTs – ProVen VCT (PVN) and ProVen Growth & Income VCT (PGI) – are the longest-standing VCTs with a focus on growth investing.
The manager invests in a broad range of opportunities, from B2B software and data providers to consumer brands. While it has a particular reputation for backing e-commerce companies, it has enjoyed success across the spectrum. Fast-growing companies from Watchfinder to Chargemaster have come out of the ProVen stable.
The two VCTs have combined net assets of £333 million and a portfolio of over 50 companies (March 2024), with a bias towards the consumer and B2B software sectors which account for 44% and 29.5% of the combined portfolio value respectively. The manager operates in both the UK and US, giving it a transatlantic outlook unusual in the sector.
In the 10 years to June 2024, PVN and PGI have produced a NAV total return (including dividends) of 50.6% and 33.7% respectively. Over the five years to June 2024, returns were 7.9% and 9.5% respectively. Past performance is not a guide to the future.
- Seeking to raise up to £30 million, with a £10 million overallotment facility
- Target dividends of 5% of NAV – variable and not guaranteed
- Available for the 2024/25 tax year
- Minimum investment: £5,000 (£2,500 per VCT) – you can apply online
- Deadline: 27 Sep 2024 (3pm) for final allotment
VCT | Capacity | Raised | Remaining |
---|---|---|---|
ProVen VCT | £15m | £13.4m | £1.6m |
ProVen Growth & Income VCT | £15m | £12.1m | £2.9m |
As at Fri 13 Sep; figures provided by Beringea and not updated in real time. |
Important: The information on this website is for experienced investors. It is not a personal recommendation to invest. If you’re unsure, please seek advice. Investments are for the long term. They are high risk and illiquid and can fall as well as rise in value: you could lose all the money you invest.
The manager
Since inception, the two ProVen VCTs have been managed by Beringea LLP, the UK arm of transatlantic venture specialist Beringea LLC. Beringea as a whole has successfully backed entrepreneurial businesses for over 30 years and currently manages UK and US venture capital funds of more than $850 million, including over £330 million of VCT assets in the UK and $466 million across four institutional funds in the US (March 2024). The manager’s international footprint means it can provide on-the-ground support to help companies expand across the Atlantic.
The VCTs are directly managed by an investment team of 10. This includes Founding Partner Malcolm Moss, Managing Partner Stuart Veale, and Chief Investment Officer Karen McCormick.
The investment team is assisted by the wider UK Beringea team of c.30, which provides assistance to portfolio companies, including in-house legal and marketing.
Meet the manager: Stuart Veale, Managing Partner of Beringea
Investment strategy
The ProVen VCTs launched in 2000 (PVN) and 2001 (PGI) and have always focused on growth capital investments.
Over the years, the funds have progressively converged towards identical investment mandates. Today, it’s expected they will mirror each other and co-invest on each new deal, albeit in different amounts. This does mean there are some differences; for instance, marketing software provider CreativeX is the largest position within PGI but a smaller position within PVN.
An ideal portfolio company should have a proven commercial business with an exceptional team capable of taking the company to exit. The majority of portfolio companies are tech-enabled and relatively capital light, with the potential, in Beringea’s view, to deliver a profitable exit within three to four years – not guaranteed.
Beringea will only invest in companies that are either already profitable, or where the manager sees a clear path to profitability. It aims to be a key part of the team with significant influence in the business. That may include using its transatlantic experience to support expansion into the US where appropriate.
In recent years, ProVen’s growing list of successful founders has helped create proprietary deal flow and value for the VCTs. As an example, the VCTs’ largest holding, Luxury Promise, the pre-owned luxury handbag marketplace, was introduced to Beringea by one of the co-founders of successful exit Watchfinder.
Current portfolio overview
The combined portfolio contains over 50 companies and a blend of new and maturing growth assets (February 2024).
In the 12 months to February 2024, Beringea invested £9.4 million into four new investments, and £1.7 million into two follow-on investments.
Combined portfolio sector breakdown (%) – invested assets
Examples of portfolio companies
Luxury Promise – largest combined holding
Luxury Promise is an online premium marketplace for buying, selling – or even swapping – luxury fashion and accessories, particularly designer handbags from brands such as Hermès, Chanel, and Louis Vuitton.
Officially launched in 2017 by Sabrina Sadiq, a former lawyer and experienced luxury goods authenticator, Luxury Promise was the world’s first resale platform to evaluate, authenticate, sell and buy pre-owned luxury goods using artificial intelligence to help price and authenticate items.
A vendor can submit a picture online and receive an instant valuation. After an item is sold, the vendor sends it to Luxury Promise, which authenticates it, repairs it if needed, sends it to the buyer and receives a commission on the sale. It has proven popular with customers, with sales rising 450% between 2019 and early 2022.
The ProVen VCTs first invested in mid-2020 following a referral from Lloyd Amsdon, co-founder of previous successful exit, Watchfinder. The company’s subsequent funding round, which raised $11 million in February 2022, saw the group win backing from Pierre Denis, the former Jimmy Choo chief executive and Francois Delage, the ex-CEO of De Beers, with ProVen also supporting the round.
To date the two VCTs have invested a total of £11.7 million, a position currently valued at £20 million (February 2024). Past performance is not a guide to the future.
Farmer J – recent investment
After years working as an investment banker and eating soggy sandwiches at his desk, Jonathan Recanti saw a gap in the market for a food brand whose restaurants could deliver on quality, flavour, and speed.
Farmer J takes its inspiration from large fast-casual chains in the US, such as Chipotle. Its food is cooked on-site and served counter-style, meaning customers can mix and match a selection of seasonal, freshly sourced ingredients.
The company launched its first restaurant in 2014 and now has ten sites across London. Sales hit £18 million over the last year and the chain has garnered a handful of celebrity customers, including musician Dua Lipa, and actor Jamie Dornan.
The ProVen VCTs invested a total of £5.5 million in the business at the start of 2024. The funding will be used to expand into the US as well as open more sites across the UK.
Exit track record
In the year to February 2024 the VCTs exited their remaining position in jewellery designer Monica Vinader. Combined with their earlier partial exits, this generated a total return of between 7.7x and 7.8x.
The VCTs also sold their stakes in Aistemos for 1.7x cost and received proceeds from the sale of Blis Global, Firefly and Sealskinz (disposals completed in the previous financial year).
Past performance is not a guide to the future.
Monica Vinader – recent exit
Monica Vinader is an award-winning jewellery brand, founded by sisters Monica and Gabriela Vinader. Described as affordable luxury, the company offers high-quality and responsibly sourced designs without an eye-watering price tag.
Since launching in 2008, the business has garnered a loyal following, with notable customers including Jennifer Lopez, Kendall Jenner, and the Princess of Wales. Revenues quadrupled to c.£100 million over the six years to March 2023.
The ProVen VCTs originally backed the business in 2010 and later sold 60% of the combined stake in 2016 for a 5.2x return on cost. In March 2023, Monica Vinader agreed a strategic sale to Bridgepoint Development Capital IV, a private equity fund. The VCTs realised their remaining holding for initial proceeds of £8.7 million, bringing total proceeds to between 7.7x (PVN) and 7.8x cost (PGI). Past performance is not a guide to the future.
MYCS – example of previous failure
As is to be expected, not all investments work out. Online furniture retailer MYCS is an example.
The company had to hold large quantities of expensive stock for extended periods. This caused problems when loan providers introduced lending caps in March 2022 at the same time as consumer confidence fell sharply.
In response to these challenges, MYCS entered into a merger with another private equity-backed business. The ProVen VCTs invested a total of £10.9 million in the business. The VCTs will not receive any proceeds from the merger, although there is the possibility of some contingent returns should the buyer secure a future sale of the enlarged group.
Performance and dividends
Whilst the ProVen VCTs have a good longer-term track record, driven primarily by profitable exits. Recent performance has proved more challenging, with write-downs to key portfolio holdings, although several have since recovered.
In the 10 years to June 2024, PVN and PGI have produced a NAV total return (including dividends) of 50.6% and 33.7% respectively. Over the five years to June 2024, returns were 7.9% and 9.5% respectively. Past performance is not a guide to the future. Note, we show VCT returns over a five-year period as a minimum, where possible. Where a VCT has followed the same investment strategy for longer, we also show returns over 10 years.
The VCTs target an annual dividend yield of approximately 5% of NAV, variable and not guaranteed. Over the five years to June 2024, the VCTs have delivered a cumulative dividend yield of 22.9% (PVN) and 23.8% (PGI), based on the starting NAV of each VCT over the period – dividends are variable and not guaranteed.
NAV and cumulative dividends per share over five years (p)
Dividend payments in the calendar year
Dividend yield history (% of starting NAV)
PVN | PGI | |
---|---|---|
2019 | 5.4% | 5.0% |
2020 | 4.8% | 5.3% |
2021 | 4.9% | 5.2% |
2022 | 7.1% | 7.2% |
2023 | 5.3% | 5.4% |
YTD | — | — |
Dividend Reinvestment Scheme
The VCTs operate a dividend investment scheme that allows shareholders to reinvest future cash dividend payments in new shares if desired. As these are new shares they should be eligible for tax relief (you will need to claim this on your tax return or directly with HMRC) and the shares will count towards the VCT annual subscription limit.
Share buybacks
The boards intend to buy back shares at up to a 5% discount to the prevailing net asset value. This is not guaranteed – please see the offer documents for details.
Discount history
VCT shares are traded on the London Stock Exchange. Similar to investment trusts, the share price can fluctuate and can be different from the VCT’s net asset value (NAV), i.e. the value of the VCT’s underlying investments. The difference between the share price of a VCT, and its net asset value per share, is called a discount.
Based on data from Morningstar, the average discount to NAV as at 30 June 2024 was -6.9%. Over the previous five years the average discount to NAV was -6.4%.
The discount history is based on the closing share price of the VCTs at the end of each month, divided by the latest net asset value at the time. Past performance is not a guide to the future. Investors looking to sell their VCT shares may get a better price using the VCTs’ share buyback facilities, although this is not guaranteed.
Risks – important
This, like all investments available through Wealth Club, is only for experienced investors happy to make their own investment decisions without advice.
VCTs are high-risk so should only form part of a balanced portfolio and you should not invest money you cannot afford to lose. They also tend to be illiquid and hard to sell and value. Before you invest, please carefully read the Risks and Commitments and the offer documents to ensure you fully understand the risks.
To retain the tax benefits, VCTs should be held for at least five years. If you sell VCT shares and reinvest in new shares of the same VCT (including any mergers) within six months, tax relief can be restricted. Tax rules can change and benefits depend on circumstances.
Charges and savings
A summary of the main charges and savings is shown below. The net initial charge shown includes the Wealth Club saving. The investment may have additional charges and expenses: please see the provider documents including the Key Information Document, for more details, offer price and share allotment calculation methodology.
Please note, capacity – for the offer or any early bird savings – can be reached early, and we may not be notified of this by the VCT in real time.
Full initial charge | 5.5% |
Early bird discount | — |
Wealth Club initial saving | 3% |
Existing shareholder discount | 0% |
Net initial charge through Wealth Club (new investors) | 2.5% |
Net initial charge through Wealth Club (existing investors) | 2.5% |
Annual management charge | 2% |
Annual administration charge | See details below |
Performance fee | 20% |
Annual rebate from Wealth Club | 0.10% |
More detail on the charges
Annual rebate when you invest through Wealth Club
The VCT offer includes an annual rebate for Wealth Club investors, payable for the first three years. This is a rebate of our renewal commission and should be equivalent to a percentage (shown in the table above) of the Net Asset Value of the Offer Shares issued to you when you invest. Terms and conditions apply.
Deadlines
- Offer closes 27 September 2024 (3:00 pm)
Our view
The ProVen VCTs have a long and successful track record of growth capital investing, having achieved several profitable exits – most recently with the sale of jeweller Monica Vinader to Bridgepoint (detailed above).
More recent performance has been mixed, with failures such as MYCS offset against the portfolios’ successful consumer and software investments, such as camera reselling platform MPB Group and energy data platform Gorilla.
Beringea has been backing entrepreneurial businesses for the last 30 years and has a highly experienced management team. The VCTs have continued to deploy capital into an encouraging pipeline of predominantly consumer and SaaS investments, Farmer J (detailed above) is one such example.
In our opinion the manager is highly credible and Beringea’s transatlantic connections set it apart from some other VCTs, although investors should form their own view.
Wealth Club aims to make it easier for experienced investors to find information on – and apply for – investments. You should base your investment decision on the offer documents and ensure you have read and fully understand them before investing. The information on this webpage is a marketing communication. It is not advice or a personal or research recommendation to buy any of the investments mentioned, nor does it include any opinion as to the present or future value or price of these investments. It does not satisfy legal requirements promoting investment research independence and is thus not subject to prohibitions on dealing ahead of its dissemination.
The details
- Type
- Generalist
- Target dividend
- 5% of NAV
- Initial charge
- 5.5%
- Initial saving via Wealth Club
- 3%
- Net initial charge
- 2.5%
- Annual rebate
- 0.10%
- Funds raised / sought
- £25.5 million / £30.0 million
- Deadline
- 27 Sep 2024 (3pm) for final allotment