The specialist investment funds team from SGH Martineau has completed multiple VCT mergers during what is a turbulent economic and regulatory time for the industry.
The VCTs, all of which were listed on the main market of the London Stock Exchange, were merged using schemes of reconstruction governed by section 110 of the Insolvency Act 1986.
This process was first pioneered by law firm SGH Martineau in 2005 and, since then, it has been adopted across the VCT market.
The merger of two VCTs managed by Albion Ventures, Albion Venture Capital Trust plc and Albion Prime plc were completed first, resulting in an enlarged VCT with net assets of approximately £42 million.
This was followed 48 hours later by the completed merger of four Octopus Apollo VCTs, managed by Octopus Investments, resulting in an enlarged VCT with net assets of over £50 million.
The week ended with proposals being sent to shareholders to merge the four Octopus Eclipse VCTS, which if approved by shareholders and completed, will result in an enlarged VCT of around £44 million.
Kavita Patel, who heads up the SGH Martineau team, said: “This has been a very busy period for the VCT sector with multiple restructuring and mergers. Changes in the VCT rules, as well as cost and strategic benefits have been material factors in the continuing activity in this area. A merger of ‘sister’ vehicles with identical investment policies and similar investment portfolios would appear therefore to be a logical step for investment managers and boards seeking to reduce costs and create enlarged companies of more economically efficient sizes.”