As the tax year draws to a close, the Downing FOUR Venture Capital Trust (VCT) Healthcare Share Class remains open for end of tax year investments as part of a £10.2m top-up offer.
The VCT, which is managed by investment manager Downing LLP, seeks to offer investors exposure to the specialist healthcare and biotech sector, while taking advantage of attractive VCT tax reliefs.
The offer will support the growth of existing portfolio companies and take advantage of a strong pipeline of new opportunities identified by the management team.
The global healthcare sector is growing, with spending expected to accelerate by an average of 4.1% per year between 2017 and 2021, driven in part by ageing populations, advances in medical treatments and an increase in chronic conditions.
The UK’s healthcare sector shows similar growth potential, with the size of the private and public market expected to increase from a projected £165.8 billion in 2016 to £186.1 billion in 2020. Downing’s offer provides investors with an opportunity to invest in this growing sector.
The Downing FOUR Healthcare Share Class will focus on development and expansion funding for innovative healthcare and biomedical businesses occupying the intersection between healthcare and technology. Target sectors will include drug discovery, medical devices, diagnostic technologies and e-health technology, targeting to pay dividends of at least 4% p.a of NAV from summer 2020.
Existing investments in the portfolio include Destiny Pharma, an innovative biotech company developing treatments for antibiotic-resistant bacteria; Arecor, a leading developer of biopharmaceuticals in the field of diabetes care; and Open Bionics, producer of the world’s first medically approved 3D printed bionic arm.
In addition to Downing’s 45-strong investment team – and our in-house expertise, led by Will Brooks, investment director for healthcare activities – the Downing FOUR Healthcare Share Class is supported by healthcare sector specialists, BioScience Managers Limited, to assist in the sourcing and investment of funds.
Downing’s offer comes with additional benefits not usually available on VCTs. Investments of £5,000 to £200,000 can be made as a lump sum, split across two tax years. Alternatively, investors also have the option to make instalments of a maximum of £16,666 per month. Downing is also offering a nil discount buy-back policy, aiming to give shareholders the opportunity to exit Downing FOUR Healthcare Share Class in one transaction, at a time that suits them, with no exit penalties.
From summer 2020, the company expects to be able to pay dividends of at least 4% per annum of NAV on shares held in the Healthcare Share Class.
Kostas Manolis, Partner, Downing said,
“Healthcare investing is becoming increasingly popular in the UK, as investors look for investments with a social purpose alongside attractive returns and favourable tax treatment. Our experienced healthcare team and our ongoing relationship with BioScience Managers enables us to offer the breadth and depth of expertise to source and work with some of the most dynamic companies in the sector.”
Jeremy Curnock Cook, Managing Director, BioScience Managers said,
“British biosciences are going through a sustained growth period, with a strong pipeline of companies producing novel solutions to tackle the world’s most pressing health challenges. VCT structures are an ideal way for managers with the requisite specialist skillset to bring together a portfolio of companies capable of delivering robust risk-adjusted returns to investors.”
Andy Lane / Nick Corrin / Fran Hart / Justine Crestois
Tel: +44 (0)20 7457 2020
VCT tax treatment
VCTs offer investors tax benefits of income tax relief at 30% when shares are held for at least five years, tax free dividends over the course of the investment, and capital gains tax exemption on any gains arising on the disposal of the shares.
Please note that this is a very brief summary of the current UK tax reliefs on VCTs. All tax reliefs are subject to change in the future and personal circumstances.
This is for information only and does not form part of a direct offer or invitation to purchase, subscribe for or dispose of securities and no reliance should be placed on it. An investment should only be made based on the relevant product literature. Capital is at risk. We recommend investors seek professional advice before deciding to invest. The value of an investment, and any income derived from it, can fall as well as rise. Investors may not get back the full amount they invest and target returns are not guaranteed. Any personal opinions expressed are subject to change and should not be interpreted as advice or a recommendation. Past performance is not a reliable indicator of future results. Downing does not offer investment or tax advice or make recommendations regarding investments. Downing is authorised and regulated by the Financial Conduct Authority (Firm Registration No. 545025). Registered in England No. OC341575. Registered Office: St Magnus House, 3 Lower Thames Street, London, EC3R 6HD
About Downing LLP
Downing LLP is an FCA authorised and regulated investment manager with over 30 years of experience and has raised funds from 35,000 investors. It currently has over £1 billion funds under management. The healthcare activities of the Downing venture funds are led by Will Brooks, investment director, who has over 30 years’ experience in healthcare and biotechnology with over 18 years’ experience in venture capital across Europe and the US. Find out more online at downing.co.uk.
About BioScience Managers
BioScience Managers is a leading healthcare investment specialist founded in 2003, with the assistance of VicStart. It invests in a portfolio of biomedical companies which have clear technological and market advantages in which it can influence success and is confident of managing an exit. Past funds have averaged a net annual internal rate of return above 20 per cent. Jeremy Curnock Cook is an industry veteran with more than 30 years of experience in healthcare investing. Find out more online at biosciencemanagers.com.
 Deloitte, Global health care outlook, The evolution of smart health care, 2018
 PWC, Capture the Growth: The opportunities for new entrants in healthcare and wellbeing 2016