Peter Hicks, research analyst at Chelsea Financial Services, has urged the Maven Renovar VCT board to return cash to investors.
“Following the Amati AIM VCT change of manager to Maven Renovar VCT and the recent special dividend of 10p, Chelsea Financial Services would like to see the Maven Renovar board return any further remaining surplus cash to investors. According to the latest annual financial report, approximately 20% of the portfolio consists of cash and cash equivalents. Beyond cash, there are also several readily realisable and highly liquid holdings.
“Chelsea believes that returning excess cash to investors, alongside a managed return of readily realisable and liquid capital, is the most tax-efficient use of shareholders’ assets. Shareholders would then be free to reinvest the proceeds into a new VCT share offer for an additional 30% income tax relief.
“The majority of Maven Renovar shareholders are either approaching the five-year qualifying holding period or past it, with the last significant allotment occurring in March 2022. Redeploying capital within the portfolio into unquoted and illiquid holdings, instead of paying out tax-free dividends, would mean locking away funds for a further indefinite period.
“It is also important to note that Maven Renovar’s shareholders originally invested in an AIM-focused strategy, not an unquoted strategy. Returning realised capital to investors provides them with the most tax-efficient means of deciding what to do with their money, whether by reinvesting it into the Maven Renovar VCT for an additional 30% income tax relief or choosing to invest elsewhere.”
