Ventus VCT Shareholders
 
 

Introduction and Strategy

Twenty shareholders across the Ventus 1 and Ventus 2 VCTs (together called Ventus), who hold approximately 10 percent of the shares, have requested that resolutions be put at the Annual General Meeting (to be held before the end of August 2019) to replace the existing directors with new directors, whom they believe are better qualified to lead the funds and provide a fresh perspective.

The decision to take this action has come after discussions with the existing directors, which have not adequately addressed shareholder concerns.

The resolutions require a simple 50% majority of those votes cast. Your vote therefore does count and the future strategic direction of the fund will impact the value of your shares.

Whilst the positive yields and total returns are recognised, it is believed that a greater proportion of the income generated from investee companies should be returned to shareholders. There is no suggestion of impropriety or wrong doing on behalf of the existing directors or Temporis in any aspect of the management of the funds. There are, however, in the opinion of these shareholders, significant areas of concern that warrant shareholder action and a more pro-active management approach.

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The proposed directors have been talking with ShareSoc throughout the requisition process. ShareSoc has delayed publishing its recommendation until the directors issued the most recent accounts which were included with their letter of the 24 Jun 2019.

ShareSoc has now issued the following supportive statement following a detailed review:-

“ShareSoc, the UK Individual Shareholders Society, has a campaign called the ShareSoc VCT Investors Group who campaign against high fees and long tenure NEDs and is supportive of the Ventus shareholder resolutions submitted by the Requisitioners”.

Further information can be found at
www.sharesoc.org/sharesoc-news/ventus-and-ventus-2-voting-recommendations-from-sharesoc-28-june-2019.

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Strategy

Until the new directors are in place and are able to have access to the Temporis Management Agreement, review the investee companies and understand the reasons for the high operating costs, it would be unwise to set a detailed strategy.

It has long been planned that there will be a vote in 2020 on whether the funds would be wound up or continue to operate. It is the view of many shareholders that this review should be undertaken by a fresh set of directors who can better assess the assets in the investee companies.

Ventus provides a valuable tax shelter for shareholders; however without a reduction in management costs there is a risk that the future dividends are less than the value of the shares, resulting in the decision to wind-up the funds.

With reduced fees, cost cutting and effective management, Ventus has the potential to significantly enhance returns to investors for the remaining life of the assets.

Serious consideration should be given to competitively tendering the Investment Manager role, splitting the role into smaller parts or the self-management of the funds with an in-house asset manager owned by the funds.

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