Downing FOUR VCT plc - Healthcare
Downing FOUR VCT - Healthcare Share Class is raising £10.2 million and intends to offer you the opportunity to invest in a range of innovative healthcare and biomedical companies. Please read the key risks below.
- Strategy: focusing on a range of healthcare subsectors across the UK, including drug discovery, medical devices, diagnostic technologies and e-health and digital technology.
- A growing sector: the UK's healthcare market is expected to increase from £165.8 billion in 2016 to £186 billion in 2020 (source: PwC, Capture the growth: The opportunities for new entrants in healthcare and wellbeing, 2016).
Downing FOUR Healthcare Share Class aims to provide attractive returns to investors by investing in a portfolio of healthcare companies, while taking advantage of VCT tax reliefs.
The focus will be on development and expansion funding for innovative healthcare and biomedical businesses.
Alongside the standard lump sum available for one-off subscriptions, we are introducing the option for investors to subscribe monthly by way of a standing order. Share allotments will be made at least quarterly with tax and share certificates issued accordingly.
The key features of Downing FOUR VCT
- No penalties on exit: Downing FOUR operates a share buy-back policy at nil discount to NAV (subject to VCT regulations and liquidity). This should give you the opportunity to sell your shares and exit the VCT in one transaction, at a time that suits you, with no exit penalties.
- Monthly subscription option: unlike other companies, we offer a monthly standing order option. Subscriptions are subject to a minimum lump sum of £5,000 or £500 per month (maximum £200,000 or £16,666 per month across Generalist and Healthcare VCTs).
- Target dividend: 4% p.a., from summer 2020. Please note, this is a target only and is not guaranteed.
- Funds awaiting investment: as returns on cash deposits are currently at very low levels, up to 70% of the funds awaiting investment will be invested into listed opportunities and/or funds managed by Downing’s Public Equity team (subject to market conditions and cashflow requirements). The focus will be on funds with micro-cap and small-cap investment strategies.
|Minimum subscription: £5,000 lump sum or £500 per month (across both share classes)||Maximum subscription: £200,000 lump sum or £16,666 per month (across both share classes)|
Method of payment for application
Payments for applications can be made by cheque, made payable to:
Downing FOUR VCT plc, or by electronic bank transfer using the payment details below.
How to apply
If you would like to invest, please first read the Prospectus before completing an application form.
VCTs are considered to be higher risk investments and you may lose some or all of your capital. We’ve outlined the key risks associated with an investment in the Healthcare Share Class of Downing FOUR below – please refer to the Prospectus for a full list.
- Capital is at risk: the value of the shares and income derived from them can fluctuate. There’s no guarantee you’ll get back the amount you invest.
- Investments are long-term and high-risk: you should be prepared to hold your shares for a minimum of five years. Qualifying investments made by the Company will be in businesses which have a higher risk profile than larger “blue chip” companies and whose securities are not readily realisable and therefore may be difficult to realise.
- Tax reliefs are not guaranteed: the tax rules, or their interpretation, in relation to an investment in the Company and/or the rates of tax may change during the life of the Company. Changes may apply retrospectively, which could affect tax reliefs obtained by shareholders and the VCT status of the Company. If you dispose of your shares within five years of issue, you’ll have to repay any income tax reliefs originally claimed.
- Maintaining VCT status is not guaranteed: there can be no guarantee that the Company will retain its status as a VCT. Losing VCT status could lead to adverse tax consequences including a requirement for you to repay the 30% initial income tax relief.
- Shares may be difficult to sell: although the Company’s shares are traded on the London Stock Exchange, there may not be a liquid market in the shares and you may find it difficult to sell them. In addition, the price at which shares are traded may not reflect their underlying net asset value.
- You cannot rely on past performance: there can be no assurances that the Company will meet its objectives or identify suitable investment opportunities. The past performance of the Company and other funds managed or advised by Downing are not a guide to future performance.
- Single sector exposure: the qualifying investments in this share class will only be invested in the healthcare sector, which may increase risks compared to a VCT share class that is diversified by sector.
- There are investment restrictions: the Company’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 your returns. Several new investment restrictions came into force in 2015 and 2017, which include VCT funds being prohibited from being used to finance management buy-outs or the acquisition of existing businesses as well as the inclusion of a ‘capital-at-risk’ test. In addition, the maximum lifetime amount a company can receive from VCTs has been restricted, as well as limiting VCT investment to companies under a certain age.
- There are market risks: the investments the Company may make in funds managed by Downing and/or listed shares will be subject to normal market fluctuations and other risks inherent in investing in securities.