News

New Downing VCT Launched

21 October 2011

Downing Planned Exit VCT 2 & 3 – F Share Offer

Downing Planned Exit VCT 2 & 3 has just launched a new £20m offer in an F share class ("F Shares"). For full details click here.

The F Shares will focus on capital preservation by making investments into businesses with asset-backed investments (e.g. children's nurseries, health clubs, conference centres) and may also invest in businesses with predictable revenue streams (e.g. renewable energy businesses).

Investors qualify for 30% income tax relief on their subscription (up to £200,000 per tax year, subject to personal circumstances and a five year holding period). Your attention is drawn to the risk factors set out on page 1 of the Securities Note.

Early Bird Offers
If you are an existing Downing VCT shareholder, you qualify for an extra 2% in shares of the amount subscribed if your application is received and accepted by 21 December 2011. If you are new to Downing, you can still receive an extra 1% in shares if your application is received and accepted by this date.

Track Record
Downing Planned Exit VCT 2&3 has already had three successful fundraisings. The first launch was in 2005 and raised gross aggregate proceeds of £20.3m and paid dividends totalling 90.4p per share, equating to a tax-free return, calculated as an IRR, of 11.2% per annum, 18.7% gross equivalent to a 40% taxpayer.

The second (2008 Share Offer) raised aggregate proceeds of £14.3m and to date has an unaudited Total Return of 99.0p per share. The third (2009 Share Offer) raised aggregate proceeds of £20.0m and to date has an unaudited Total Return of 97.0p per share.

Past performance is no guide to future performance.

Risk Factors
The key risks are set out below (please read page 1 of the Securities Note for a full list of risk factors):

  • Tax reliefs: the availability of the tax reliefs depends on the companies invested in maintaining their qualifying status. If the Trust does not maintain VCT qualifying status investors could lose the upfront 30% income tax relief and all other tax reliefs. All tax reliefs are subject to change in the future and personal circumstances. Please refer to HM Revenue & Customs' website for further guidance on the tax reliefs available on VCT investments.
  • Liquidity: it may prove difficult for shareholders to sell their shares at a fair price, or at all.
  • Investment performance: the Trust will invest in small unlisted companies which, by their nature, are higher risk than larger "blue-chip" companies. Shares in such companies may be difficult to sell. Past performance is not a reliable indicator of future performance.
  • Investment restrictions: the Trust's ability to obtain maximum value from its investments may be limited by the VCT rules. Changes in the VCT rules may be applied retrospectively and may reduce the level of returns for investors.
  • Speculative risk: the value of shares may go down as well as up and shareholders may not receive back the full amount invested. In addition, there is no certainty as to the level of dividends.