This blog gives you the latest topical news plus some informal comments on them from ShareSoc’s directors and other contributors. These are the personal comments of the authors and not necessarily the considered views of ShareSoc. The writers may hold shares in the companies mentioned. You can add your own comments on the blog posts, but note that ShareSoc reserves the right to remove or edit comments where they are inappropriate or defamatory.

Changes at Oxford Technology VCTs

Announcements were made last week about further changes at the four Oxford Technology VCTs and the financial results for the year were also published. These companies experienced somewhat of a revolution last year after two of them narrowly escaped losing their Venture Capital Trust tax status. New directors were appointed to them at that time.

This is what is said by the Chairman in one of the Annual Reports about that problem: “Since taking up our appointment, the new Directors of the Company, Richard Roth and I, have been putting in place more robust procedures and are actively working with Oxford Technology Management and other stakeholders to ensure that its procedures comply with best practice commensurate for a VCT of the Company’s size and type.”

The latest changes which affect all four of the companies are that, after the AGM, there will be a common set of directors for all of them – namely Alex Starling, Richard Roth, Robin Goodfellow and David Livesley. Each of them will Chair one of the companies.

Merging the four companies was considered but there was a desire to keep separate investment pools because of the somewhat differing portfolio holdings of the companies. Having a common set of directors ensures some economies can still be achieved. In addition the companies are becoming “self-managed” via their own subsidiary companies who will contract services from Oxford Technology Management, the former manager. The fund management fees will be reduced to 1% per annum which is a substantial reduction, and reflects that it is unlikely that these companies will be making investments in new companies. The policy is “to seek to crystallise value from the portfolio and distribute cash to shareholders”. Furthermore the performance fee threshold has been rebased and is now subject to an escalation of 6% pa compound.

This appears to be a sensible move and hopefully will produce an improved outcome for shareholders in due course from what have been in essence disappointing investments on the whole. The history of events and ShareSoc’s involvement in a campaign to change things at these companies can be read on this web page: Our thanks must go to the investors who stepped forward to act as directors when it became necessary. It demonstrates that problems in companies can be tackled if shareholders are willing to take action.

The Annual General Meetings of these companies is on the 26th August when investors may no doubt learn more about the directors’ future plans for these companies.

Roger Lawson

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