Our Current Offer
We have successfully raised £18.1m in our Ordinary share offer, which is now closed, and £25.8m in our B Share offer currently still open and continuing our consumer focused investment strategy. Our objective is to generate significant capital appreciation whilst enabling Investors to benefit from substantial tax benefits.
As part of the Oakley Capital group we have an extensive deal flow and we are sought out by some of the UK’s most promising entrepreneurs. Collectively, our Board, Management Team and Advisors have extensive experience of running businesses in the industries we focus on, and the Oakley Capital infrastructure provides key resources and support.
Pembroke VCT 2017-18 Prospectus
Please find below a download link for our latest offer for the 2017-18 fund raise.
Application Form & Key Information Document
Please find below our application form for making an investment in Pembroke VCT and the Key Information Documents for the Ordinary Share Class and the B Ordinary Share Class.
Letter from the Chairman
I am pleased to announce that Pembroke VCT plc has launched a new share offer to raise up to £20 million. After having raised over £43 million since 2013, Pembroke has invested £29 million in 27 companies. The Board is pleased with the performance to date and the continued progress of the portfolio. The additional cash will allow the Company to grow its existing portfolio of investments and take advantage of a healthy pipeline of prospective investment opportunities.
Existing Portfolio of Investments – New investors will gain immediate access to a maturing portfolio of growing businesses and to a well‑established dividend‑paying VCT. These assets include high growth opportunities such as Plenish, Five Guys and Alexa Chung. Additionally, Pembroke intends to use the funds raised to make a number of follow‑on investments in companies in which the Company has already invested – where further capital will accelerate their growth plans. Approximately 42% of the investments (by value) made to date have been into businesses that are now trading profitably at the operating profit level.
Brexit vote – Following the UK’s vote to leave the EU, the Manager has been closely monitoring the portfolio for any subsequent impact. Whilst there is still uncertainty around what the UK’s trading relationship with the EU will look like in a few years’ time, the portfolio companies should be mostly unaffected. Given they are UK based businesses and a number sell their products internationally, the majority are benefiting from the depreciation of Sterling. This should make both their products more attractive to potential customers and the portfolio companies themselves more attractive to potential buyers. The UK boasts a significant track record in the sectors in which the Company invests; this is not expected to change and the portfolio may indeed benefit from greater geographic diversity in the UK’s trading relationships.
VCT Regulatory Changes – Changes to the VCT Rules in 2015 severely restricted the types of companies that VCTs can invest in. Many VCT managers have been forced to develop new investment capabilities and hire new staff. Given the Company’s focus on providing development capital to high growth companies rather than ‘management buy‑out’ transactions and mature businesses, the Board is confident that the Manager remains well placed to manage the Company and identify suitable investment opportunities. Neither the Company’s investment strategy nor the types of company it invests in has had to alter since these rule changes.
Patient Capital Review – The Budget statement on 22 November 2017 heralded changes to the VCT regime which will nonetheless leave the Company’s investment strategy unchanged. The aim of the changes is to halt the flow of VCT funds into companies that provide a low risk investment opportunity where the up-front tax relief provides most of the return. Companies seeking investment for their long‑term growth and development, where the investment is at genuine risk, will not be impacted.
Investments made following Royal Asset of the Finance Bill, expected in Summer 2018, will be subject to two tests, based on the views of a ‘reasonable’ person: i) does the company intend to grow and develop over the long term, and ii) is there the risk of a loss of capital to the investor of an amount greater than the net return? The Company believes its current portfolio and future pipeline meets these tests without difficulty, and will not see any meaningful changes to its investment strategy.
Investment Strategy – The Company’s objective remains the same; Pembroke provides investors with access to a series of carefully researched investments focusing on the consumer retail and lifestyle segments. Pembroke will continue to invest in a diversified portfolio of smaller unquoted companies, with a preference for companies that are producing profits. The objective is to generate significant returns, whilst enabling Investors to benefit from substantial tax advantages.
Pembroke seeks opportunities which are capable of significant organic growth and sustainable cash generation. The Company benefits from the same investment strategy already pursued and successfully implemented by Peter Dubens at Oakley Capital since 2002. A key feature of this strategy is an investment bias towards consumer‑facing businesses which have an established brand or with the potential to develop their brand.
The B Ordinary Shares target an annual dividend of 3 pence per Share. B Ordinary Shareholders received a 2 pence dividend per Share on 26 October 2017 and, subject to performance, the intention is to pay at least another 1 pence dividend shortly after 5 April 2018. However, this is a statement of intention, and no forecast or projection should be implied or inferred.
Tax Advantages – VCTs offer significant tax benefits over most investment products, including:
- income tax relief of 30% on the amount invested;
- dividend payments are tax free; and
- no capital gain arises when shares are sold.
If you are not already, I hope you will join me as an investor in Pembroke VCT.