2nd UK tech VCT launched

British Smaller Technology Companies VCT2 has launched on the back of the success of the first fund. VCT1 raised GBP13 million when it was launched two years ago and about half of that money has been invested since the fund was closed in June last year. The fund invests between GBP150,000 and GBP750,000 million in British start up technology companies. Of the 17 companies in the VCT1 portfolio three have received second round funding through the fund. VCT1 is trading at around GBP1 a share, the price at which it was launched, although that value fell to 93 pence per share on launch as a result of the cost of fund raising.

Fund raising is carried out through marketing efforts directed at private client brokers, IFAs and direct to investors.

Following the current market trend for private equity investors British Smaller Technology Companies VCT2 looks to raise a much larger fund, this time for GBP30 million. Consequently typical investments will fall between the GBP250,000/GBP300,000 to GBP1 million bracket – GBP1 million being the most a VCT is legally allowed to invest in a company in any one year.

VCT2, which requires a minimum commitment of GBP3,000, may stay open until May 31, 2001 unless it fills prior to that date. Yorkshire Fund Managers is investment adviser to VCT2 and it advises in conjunction with Generics Asset Management, a technology, consulting and investment firm that recently floated on the London Stock Exchange.

Paul Cammerman, managing director of Yorkshire Fund Managers, notes that his firm became involved with Cambridge-based Generics three years ago. A partnership was struck whereby Generics provides both advice and deal flow for British Smaller Technology Companies VCTs. Yorkshire Fund Managers was established in 1989 and initially started investing in locally focused firms in the UK and has expanded throughout the UK. It also advises the Baring English Growth Fund. Currently three out of around eight investment professionals at Yorkshire Fund Managers focus on technology investments.