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“Creating a panel of VCTs requires an upfront investment of resources, but can save time and effort
later on and ensures compliance with a centralised investment proposition throughout a firm”
ASPECT
DESCRIPTION
WHAT SHOULD BE MEASURED?
FINANCIAL
Asset coverage
Nature / level of unencumbered assets and
giving investment security
FINANCIAL
Income (at investee company level)
Certainty of income
FINANCIAL
Control and influence (at investee company level)
Ability of the Manager to control and influence
FINANCIAL
Certainty of co-investment and follow on funding Requirement and visibility of follow on funding
DIVERSITY
Investment portfolio
Diversity of portfolio in terms of number of
different companies invested into
DIVERSITY
Sector spread
Diversity of portfolio in terms of number of
different sectors invested into
DIVERSITY
Portfolio maturity
Maturity of portfolio as a measure of security
VCT MANAGER RISK
Operational history of Manager entity
Depth of experience (in years) of Manager
VCT MANAGER RISK
Manager's number of employees
Size of Managing entity
VCT MANAGER RISK
Manager's net staff numbers and retention
Stability of operations
VCT MANAGER RISK
Manager / senior employed team longevity
managing VCT products
Depth of experience specific to VCT market
VCT MANAGER RISK
Investment sector experience of Manager /
senior employed team
Depth of experience specific to investment
sector
VCT MANAGER RISK
VCT assets under management
Quantum of VCT assets under management as
a measure of presence and experience
LIQUIDITY
Type of product
Ability to access funds at any time defined by
product type / liquidity mechanisms
LIQUIDITY
Underlying nature of investment
Ability to access funds at any time defined by
nature of underlying investment
LIQUIDITY
Estimated liquidity time frame and nature of
any discount management policy
Time frame and conditions stated in IM for
giving liquidity if investor wishes to access
funds
EXIT
Nature of exit
The likely complexity of anticipated exit
EXIT
Manager track record of exits (general)
The Manager's experience of providing exits
in general
EXIT
Manager has track record of exits (specific to
asset class)
The Manager's experience of providing exits
specific to this asset class
EXIT
Anticipated realisation period (where relevant)
The amount of time that the manager
anticipates realisation will take
TAX
HMRC pre-clearance status (pipeline investee
companies)
The level of HMRC pre-clearance
TAX
Manager track record of achieving tax relief
The Manager's track record of achieving tax
reliefs for investors
TAX
HMRC challenges (if any)
The amount and level of challenge the
Manager has faced from HMRC on the tax
reliefs
TAX
Ongoing monitoring systems and controls
The level of ongoing tax monitoring of the
portfolio
REGULATORY
Manager Regulatory Permissions
The status of the Manager's FCA Regulatory
Permissions and compliance function as a
measure of accountability / professional
standards
REGULATORY
FCA Status of product/offer
The level of Regulatory scrutiny of the product
/offer
DUE DILIGENCE: AREAS TO QUERY