Change of Manager
December 09 2010 - 2:01AM
UK Regulatory
TIDMSVC2
RNS Number : 6391X
Spark VCT 2 PLC
09 December 2010
9 December 2010
SPARK VCT 2 PLC
Change of manager
SPARK VCT 2 PLC
Not for release, publication or distribution (in whole or in part) in, into or
from any jurisdiction where to do so would constitute a violation of the
relevant laws of such jurisdiction.
9 December 2010
Change of manager
The Board of SPARK VCT 2 PLC ("SPARK VCT 2" or the "Company") is pleased to
announce that Albion Ventures LLP ("Albion Ventures") will be appointed
investment manager to the Company with effect from 1st January 2011. The Company
and SPARK Venture Management Limited ("SPARK Venture Management") have agreed to
terminate the existing investment manager's agreement. A similar announcement
is being made by the Board of SPARK VCT PLC simultaneously with this
announcement.
On 29th January 2010, the Board announced that there should in future be a focus
on investments selected with a view to yield as well as capital stability. In
the Annual Report published on 31st March 2010 (the "Annual Report"), the Board
noted that there will be a greater emphasis on positioning some of the more
developed investee companies for an exit, and providing conditions develop
favourably, making a start of turning some of the more significant assets into
cash. Since then successful realisations have enabled the Company to pay a
dividend of 1 pence per share on 24th September 2010. A number of further
realisations are in progress and SPARK Venture Management will work alongside
Albion Ventures during its notice period in order to assist with these
investments.
Given the existing manager, SPARK Venture Management, is a specialist technology
investor, and is moving its fund management focus away from retail funds towards
regional and institutional funds, the Board believes that the appointment of a
new manager with expertise of growing more mature businesses across a broad
range of sectors furthers the Board's core aim of providing a sustainable future
for the Company with a view to delivering a steady annual yield. Following an
intensive selection process the Independent Directors unanimously selected
Albion Ventures as new investment manager. The Board wishes to thank SPARK
Venture Management for its efforts in stabilising the portfolio and starting the
work in realising investments. A number of potential exits from the existing
investment portfolio are in progress and SPARK Venture Management has agreed to
work alongside Albion Ventures during the first 12 months in order to assist
with these investments. Albion Ventures will be responsible for the
administration of the portfolios with SPARK Venture Management's assistance.
Albion Ventures (formerly Close Ventures) is one of the largest and most long
established VCT managers with just under GBP200 million of VCT funds under
management. The business was started in 1996, and currently manages seven VCTs,
with a broad policy of balancing income generating, asset based investments with
higher growth companies.
Pursuant to the existing investment management agreement (the "Existing
Agreement"), the Company is required to give SPARK Venture Management 12 months
notice of termination. The Company and SPARK Venture Management entered into a
termination agreement (the "Termination Agreement") on 8 December 2010, pursuant
to which the Company has agreed to pay SPARK Venture Management the management
and administration fees due under the Existing Agreement. Under the Termination
Agreement, the management fee shall be calculated by reference to the net asset
value of the Company as at 31 December 2010, subject to appropriate adjustments
in respect of dividends or realisations made during 2011. SPARK Venture
Management and the Company have agreed that the Termination Agreement is in
settlement of all claims against each other.
Albion Ventures has agreed to waive its management and administration fees for
the first year. Thereafter Albion Ventures will be entitled to an annual
management fee of 2% of net asset value, along with an administration fee of
GBP50,000 p.a. The aggregate fees payable for management and administration
(including the management and administration fees due to Albion Ventures,
directors' remuneration, registrars' fees, stockbrokers' fees, company
secretarial fees and the fees of Company's auditors) will be subject to an
aggregate annual cap of 3% of net asset value. The Board intends to discuss an
appropriate incentive arrangement with Albion Ventures at a later date, which
will be subject to shareholder approval at the time.
Once appointed Albion Ventures will review methods of increasing the cost
effectiveness of the management of the VCT including potential economies of
scale.
Change of Investment Policy
The Company's investment policy was refined at the start of 2010 towards later
stage opportunities but within the existing sector focus given SPARK Ventures
expertise. The Board now believes that it is in shareholders' interests to adopt
a new investment strategy which is to build a portfolio comprising a greater
proportion of lower risk, income producing investments with a lesser proportion
of higher risk investments with greater growth prospects. Together, it is
intended that these two categories of investment, which are common to the
majority of the seven Albion Ventures managed VCTs, will enable the Company to
produce a predictable dividend stream with the prospect of a gradual recovery in
capital value.
Accordingly, a general meeting of the Company will be convened to explain
further the proposed investment strategy, its implications for the Company's
dividend and buy back policies, and to seek shareholder approval of the new
investment policy. At the same time the Board will propose a shareholder
resolution to change the Company's name.
Commenting upon the proposed change of Manager, Robert Wright, Chairman of SPARK
VCT 2 PLC, said, ' Albion has an excellent reputation and its record as a
manager of venture capital trusts speaks for itself. The board is confident the
appointment should bring significant benefits in terms of shareholder value in
the medium term'.
Patrick Reeve, Managing Partner of Albion Ventures, added: 'We were very pleased
to be asked to become the fund manager of the Company. Albion is strongly
committed to VCTs and we look forward to working with the Board to increase
shareholder value.'
Andrew Carruthers, Managing Director of SPARK Venture Management said: "We look
forward to working with Albion and the Board to realise the value that now
exists within the portfolio".
Note to Editors
For further information please visit www.albion-ventures.co.uk or contact:
Albion Ventures
Peregrine Communications
Patrick Reeve/Robert Whitby-Smith Roddie
Vaughan-Thomas
Managing Partner/Partner Partner
Tel: 0207 601 1850 Tel:
020 3178 6870
Execution Noble & Company Limited SPARK Venture
Management Limited
Financial Adviser
Andrew Carruthers
John Riddell/Harry Stockdale Managing
Director
Tel: 0207 456 9191 Tel:
020 7857 7736
This information is provided by RNS
The company news service from the London Stock Exchange
END
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