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The fund management team at Hargreave Hale has been managing AIM VCTs since 2004. To date, these VCTs have rewarded investors with strong performance and an attractive tax-free dividend stream, in addition to the income tax relief available at the point of investment.


Launched in August 2004, Hargreave Hale AIM VCT plc merged with Hargreave Hale AIM VCT 2 plc on 23 March 2018. Between them, the two VCTs have raised over £167m (as at August 2018). Hargreave Hale has been the appointed investment manager and custodian of the company’s assets since inception.


The board has four experienced non-executive directors, including three that are independent of Hargreave Hale. Their duties include:

  • overseeing delivery of the investment strategy
  • monitoring compliance with VCT rules
  • maintaining corporate governance standards
  • producing reports and accounts for shareholders.

Following a career in corporate finance and venture capital, Aubrey assumed his first role within the VCT industry in 1997. Since then he has gone on to become one of the most experienced directors within the industry. Aubrey maintains a wide range of business interests and has been a director of six AIM listed companies. He is the senior independent director of Downing Four VCT plc.

An experienced company chairman in both private and public companies, and a former main board director of MFI Furniture Group plc, David joined the Board in September 2010. David is chairman of Episys Group Ltd and Elderstreet VCT plc and a non-executive director of Puma VCT 12 plc.

Oliver Bedford graduated from Durham University with a degree in Chemistry. He served in the British Army for 9 years before joining Hargreave Hale in 2004. Oliver co-manages the VCT with Giles Hargreave and supports other unit trusts as part of the fund management team.

Ashton Bradbury was appointed a director on 14 May 2018. He is a non-executive director of Standard Life UK Smaller Companies Trust PLC and has previously held roles at Charterhouse Tilney, Hill Samuel Investment Management and HSBC Asset Management Europe. He was until 2014 a fund manager with Old Mutual Global Investors where he established its UK small and mid cap equities team.


9 November 2018

Ticker HHV
Launch Date September 2004
Year End September
Share Price (09.11.18) 74.75p
NAV per share 78.25p
Last Div. Paid (24.10.18) 1.00p
Next Div. N/A
Total Divs. Paid 51.00p
NAV Yield (30.09.18) 4.57%
Discount to NAV (09.11.18) 4.47%
Number of Shares 186,870,012
Market Cap £139.7m
Charges (AMC) 1.50%
Ongoing Expenses 1.62%
SEDOL Number B02WHS0
ISIN Number GB00B02WHS05

Investment Objectives

The company’s investment objectives are:

  • To invest in a diversified portfolio of small UK based companies on a high risk, medium-term capital growth basis, primarily being companies which are traded on AIM and which have the opportunity for significant value appreciation
  • To invest in smaller companies which may not be readily accessible to private individuals and which also tend to be riskier
  • To maximise distributions to shareholders from capital gains and income generated from the company's funds
  • Targeted investment in equities which are non-qualifying investments on an opportunistic basis; and to maintain the Companies’ exposure to small companies through an initial investment of new capital into the Marlborough Special Situations Fund pending investment into qualifying companies.

Investment Stratagy

The investment manager and the company have adopted the following strategy to implement the investment policies of the company (the full text of which is set out in the registration document):

Qualifying investments

The investment manager will primarily focus on investments in companies with a quotation on AIM or plans to trade on AIM. The investment manager prefers to participate in secondary issues of companies that are quoted on AIM as such companies have an established track record that can be more readily assessed and greater disclosure of financial performance.

The investment manager will follow a stock specific investment approach and is more likely to provide growth and development capital than seed capital.

Although VCTs are required to invest and maintain a minimum of 70% of their funds invested in qualifying investments as measured by the VCT rules, it is likely that Hargreave Hale will target a higher threshold of approximately 80% in order to provide some element of protection against an inadvertent breach of the VCT rules.

Whilst tax legislation limits each company's maximum exposure to a single qualifying investment to 15% of net assets (at book cost), Hargreave Hale’s preference for portfolio diversification means that qualifying investments typically vary from 1-3% of net assets at book cost and rarely exceed 5% of net assets at book cost.

Although Hargreave Hale prefers to maintain successful investments for the long term, it actively manages its portfolio risk through partial disposals. In most instances, single company exposure is limited to approximately 5% of net assets at market value, although on occasion this may run higher.

Non-qualifying investments

The company will have non-qualifying equity exposure to UK and international equities. This will vary between nil and 30% of the net assets of the company and will reflect the investment manager's view of equity market risk. The investment manager will also invest in fixed income securities and cash.

Subject to a maximum of 20% of the gross assets of the company, the investment manager will invest up to 75% of the net proceeds of the offers into the Marlborough Special Situations Fund to maintain the portfolio exposure to small companies whilst the investment manager identifies opportunities to invest directly in small UK companies through a suitable number of qualifying investments.

Risk Management

The structure of the company's investment portfolio and its investment strategies has been developed to mitigate risk where possible.

  • The company has a broad portfolio of investments to reduce stock-specific risk.
  • Flexible allocations to non-qualifying equities, the Marlborough Special Situations Fund, fixed interest securities and bank deposits allow the investment manager to adjust portfolio risk without compromising liquidity.
  • Regular company meetings aid the close monitoring of investments to identify potential risks and allow corrective action where possible.
  • Regular board meetings and dialogue with the directors, along with policies to control conflicts of interests and co-investment with the Marlborough Fund mandates, support strong governance.
  • Quarterly risk reports provide an oversight of potential vulnerabilities such as the concentration of balance sheet risk, earnings risk, valuation risk and liquidity.

Shares Buy-Back and Management of Shares Liquidity

In order to improve the liquidity in the ordinary shares of the company, the board has established share buy-back policies whereby the company will purchase ordinary shares for cancellation.

  • Targets a 5% discount to the net asset value per share to improve shareholder returns
  • Established track record with more than 14.6 million shares acquired through share buybacks and a further 5 million shares acquired through a tender offer
  • 3-year average share price discount of 5.0% to the net asset value per share of Hargreave Hale AIM VCT 1.

Share buy-backs are subject to the Companies Act 2006 (as amended), the listing rules and tax legislation, which may restrict the company's ability to buy shares back. The policy is non-binding and at the discretion of the VCT board.

Divided Policy

The company has established dividend policies that target tax-free dividend yields equivalent to 5% of the year end net asset value.

  • Established track record
  • Semi-annual distributions
  • Distributions will vary with investment performance.

The ability to pay dividends is also dependent on the VCT's available reserves and cash resources, the Companies Act 2006 (as amended) and the listing rules. The policy is non-binding and at the discretion of the VCT board. Dividend payments may vary from year to year in both quantum and timing. In good years, the directors may consider a higher dividend payment; in poor years, the directors may reduce or even pay no dividend.

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