Core Growth launches £30m VCTs

London-based private equity partnership Core Growth Capital has launched two venture capital trusts (VCTs), aiming to raise a total of £30 million (€43 million; $58 million).
 
The new vehicles, Core VCTs I and II, aim to provide private investors with tax-efficient access to small and mid-sized UK companies. The trusts will invest in parallel, taking stakes of £2 to £5 million in established private UK companies.
 
The two Core VCTs will be sponsored by UK stockbroker Collins Stewart. In a statement, Rolly Crawford of Collins Stewart said: “We have seen many VCTs recently and this is the one we decided to sponsor. We believe this issue is unique in a number of areas, particularly in the area of fees, where the managers’ interests are fully aligned with those of the shareholders.”
 
According to a press release, the new vehicles will not charge any management fees and the management team will commit up to £3 million to invest in and alongside the trusts.
 
Commenting on the structure, founding partner of Core Growth Capital Walid Fakhry said: “We make no money unless investors have received back their full investment cost. We are fully incentivised to make distributions of capital and profits rather than retain profits within the fund.”
 
An independent board is to be appointed for the Core VCTs, comprising chairman Peter Smaill, director of Dunedin Capital Partners; Lord Walker, vice chairman of Dresdner Kleinwort Wasserstein and Helen Bagan, former finance director of ProVen Private Equity, according to the press statement.
 
Several VCT fundraising campaigns are currently underway in the UK. In October, Electra Kingsway VCT 2 came to market aiming to raise £40 million.