The following summary is intended to give a broad outline of the various criteria which will be applied when considering
deals for inclusion in Advent VCT's qualifying portfolio:
Industry Sectors
Most industrial and commercial markets, especially those with growth potential
Specific areas of specialisation include product and service businesses in healthcare, IT and electronics
Businesses in financial services, energy and property-related sectors will not normally be considered
Stage of Investment
Predominately established revenue generating (typically £500k to £5.0m) businesses, preferably profitable or near-profitable.
A select few early-stage and start-up investments may be considered but not initially
Mainly expansion development capital. Some MBO's and MBI's. Secondary purchases only if deal structure meets VCT legislation.
Amount of Investment
Minimum £250,000 but preferably in the range of £500k to £1.0m.
For larger financings (up to around £3.0m), Advent is an experienced syndicate leader and can introduce other suitable investors.
Other Key Deal Assessment Criteria
Strong management team and leadership
Ability of product and/or service to sustain a competitive advantage
Attractive exit prospects in 3 - 7 year timeframe, with either revenues at that time of at least £10m or a market capitalisation in excess of £15m
Certain Key VCT-Specific Requirements (for Inland Revenue Approval)
A VCT can only subscribe for new shares
Gross Assets must not exceed £10m immediately before investment
An individual VCT cannot invest mote than £1.0m in any investee company in any one year
The company must carry on a qualifying trade, wholly or mainly in the UK
Any subsidiary must be at least 90% owned and carry on a qualifying trade or be dormant
The company must be private but may be listed on AIM or OFEX markets
Normal Advent VCT Requirements
Typical investments by way of equity package (mix of ordinary/preference shares and 5 year loans), mainly for capital gain
Reimbursement of transaction and legal fees at completion
Covenant by company to retain VCT qualifying status for period of investment
