AUTUMN 2017 THIRD BRIDGE EXIT - provenvcts.co.uk€¦ · programmatic advertising of the future. Since summer 2015, Honeycomb has worked closely with Sky and Sky Media to syndicate

MAGAZINE FOR THE PROVEN VCTs AUTUMN 2017

DEEPCRAWLNEW INVESTMENT PAGE 4-5

SMARTASSISTANT NEW INVESTMENT PAGES 6-7

APM HEALTHCAREINVESTMENT EXIT PAGE 10

VCTs

THIRD BRIDGE EXITLARGEST SALE PROCEEDS TO DATE FOR A PROVEN VCTS INVESTMENT

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Welcome to the Autumn issue ofProVen NewsCONTENTS

FOREWORD - 2

PORTFOLIO NEWS - 3

DEEPCRAWL - 4 - 5

SMARTASSISTANT - 6 - 7

THIRD BRIDGE - 8 - 9

APM HEALTHCARE - 10

MATSSOFT - 11

THE ROLE OF THE VCT INVESTMENT MANAGER - 12 - 13

THE PATIENT CAPITAL REVIEW - 14

TOP UP OFFERS - 15

2 | PROVEN NEWS: MAGAZINE FOR THE PROVEN VCTs

INTERIM DIVIDENDFollowing the significant investment realisations made in 2017, we are pleased to announced that the ProVen VCTs will be making interim dividend payments to shareholders on the register as at 20th October 2017. Shareholders of ProVen VCT will receive 7.0p per share and shareholders in ProVen Growth & Income VCT will receive 10.25p per share.

Beringea has made several profitable investment realisations for the ProVen VCTs in 2017. This summer’s exit from primary research company Third Bridge was particularly successful - resulting in the largest sale proceeds to date for a ProVen VCTs investment. Further details on Third Bridge can be found on pages 8-9. We have also made successful realisations from APM Healthcare and MatsSoft – featured on pages 10 & 11.

I am pleased to announce that these exits have resulted in the announcement of a special interim dividend to shareholders on the register as at 20th October 2017. Shareholders of ProVen VCT will receive 7.0p per share and shareholders in ProVen Growth & Income VCT will receive 10.25p per share - these dividends are scheduled to be paid on 17th November 2017.

We have also made some exciting new investments. The ProVen VCTs have invested £1.5m in DeepCrawl, a search marketing analytics and insights company, and led a €5M Series A funding round into SMARTASSISTANT. SMARTASSISTANT’s technology allows its clients to offer real time, interactive digital advice to their customers. Information on these deals can be found on pages 4 and 6 respectively.

This autumn we will be launching small share offers for both ProVen VCT and ProVen Growth & Income VCT. More details can be found on page 15. Please note that we anticipate high demand for these offers, so shareholders wishing to invest should act promptly. There will be an initial period in which existing shareholders will have exclusivity for investment but shares will be allotted on a first-come first-served basis, so there is no guarantee that applications made in this period will be accepted.

Stuart Veale Managing Partner


PORTFOLIO NEWS

PROVEN NEWS: MAGAZINE FOR THE PROVEN VCTs | 3

HONEYCOMB ANNOUNCES NEW BROADCAST SERVICES TECH TRACK 100

We’re delighted to announce that portfolio companies dianomi, a native content marketing platform focusing exclusively on business and financial services, and Blis, the global pioneer in advanced location data technology, have both been featured in The Sunday Times Hiscox Tech Track 100. The prestigious league table ranks Britain’s top 100 private technology companies with the fastest-growing sales over their latest three financial years.

“It’s an honour to be named as one of Britain’s leading private tech companies,” commented Greg Isbister, Founder and CEO of Blis. “Blis has demonstrated an exceptional year-on-year top line revenue growth of over 90 percent, highlighting our position at the forefront of the industry.”

Honeycomb has launched new broadcast services designed to dramatically improve broadcasters’ workflows, reduce overheads, and improve data collation: improving ad management today, and enabling a smooth and cost-effective transition to the programmatic advertising of the future.

Since summer 2015, Honeycomb has worked closely with Sky and Sky Media to syndicate their content. The company has also collaborated with other broadcasters - including content syndication and distribution for companies like ITV, Discovery, Ericsson, Viacom, Arqiva, SKY, NBCUniversal, and Channel 4.

“We have found the Honeycomb system easy to use, fast, reliable and robust, and built with the users in mind. It delivers our needs of today and is ready to meet our needs of tomorrow.”

Chris Aldous, Commercial Operations Controller, Sky.

Chargemaster has launched Powercharge, a new cost-effective and compact electric vehicle charging point, designed specifically for workplace charging. The new Powercharge unit can provide businesses with a simple solution for open access workplace charging, without the need for keys or RFID cards.

According to Chargemaster, the UK’s largest provider of electric vehicle charging infrastructure, British roads will be home to more than one million electric cars by 2022.

Allowing for a modest increase in adoption, Chargemaster’s projection is based on a growth in electric vehicles to just over 7 per cent of new car registrations.

CHARGEMASTER LAUNCHES POWERCHARGE

MY 1ST YEARS

Portfolio company, My 1st Years - a children’s product personalisation site - has appointed ex-Moonpig Managing Director Iain Martin as Chairman, to help with the next phase of its growth strategy. Martin, who headed up Moonpig for nearly 10 years, will bring expertise to help My 1st Years scale its business in the UK as well as the U.S.

Martin has been appointed to the role of Chairman at My 1st Years by founding team Daniel Price and Jonny Sitton. Since starting My 1st Years in 2010, the duo have created an impressive range of personalised products for babies and children, winning celebrity fans including HRH Prince George (who wore his very own personalised bathrobe and slippers when he met Barack Obama).



DeepCrawl provides ‘website crawler’ services to its clients. The company uses a range of automated programmes to analyse the architecture of its clients’ websites, providing detailed website analytics, whilst monitoring technical issues and reviewing the sites’ SEO performance.

These insights provide a comprehensive overview of the technical health of its client’s websites. This in turn provides in-house and agency search marketing teams with the information they need to make their website content more visible to users and help them turn web traffic into revenue.

DeepCrawl is a London-based company, founded in 2013 by Michal Magdziarz, Matt Jones, and Chris Evans. After struggling to find a tool that could give them the insights they needed, while working on the redevelopment of a property website with millions of pages, they decided to build one themselves. DeepCrawl now has a global team of 35, and grew revenues by 55 per cent year-on-year in 2016.

DeepCrawl currently counts six major global advertising and media agency groups , WPP, Omnicom, Publicis, Havas, IPG, and Dentsu Aegis as clients, and provides its services

to more than half of the Fortune 500. Global brands using DeepCrawl include Microsoft, IBM, eBay, Salesforce, P&G, Home Depot, Sears and Walmart.

Optimising websites for search is vital for brands offering goods and services online. 81 per cent of shoppers perform an online search before they make a purchase, and 40 per cent of all global ecommerce traffic is driven by search.

DeepCrawl’s tools enable brands to audit their websites for any faults that may reduce search visibility and provide the actionable insights required to correct those faults. They also provide ongoing performance monitoring, testing, and traffic optimisation capabilities.

Brands using DeepCrawl have seen an average increase in site visibility of 62 per cent within 12 months.

The ProVen VCTs’ investment will support the company as it aims to continue the rapid growth of its development team and global customer base.

Jon Myers, Chief Growth Officer at DeepCrawl, said: “We’ve matured considerably as a company over the past 12

NEW INVESTMENT

DEEPCRAWL This summer the ProVen VCTs invested £1.5m in DeepCrawl, a leading web crawler and search marketing analytics and insights company. A further £250k has also been provided by existing investors.



months. We completely overhauled the platform, rebuilding it from the ground up without reusing a single line of code from version 1.0. That’s set us up to provide our customers with even more innovative features – including a major release this month – which is a vital foundation for our own continued growth. Beringea’s investment provides the support we need to achieve that.”

Myers sees significant challenges on the horizon for brands as a result of Google’s move to mobile-first search indexing: “Google has been testing its mobile-first index since November 2016, and full rollout could happen at any time. But with less than half of the most prominent websites having adopted responsive design or dynamic serving so far, there could be several brands that see their sites’ rankings – and, therefore, revenues – take a hit when the switch is flicked. Mobile is the new battleground for e-commerce and search marketing, and DeepCrawl is innovating to support customers with leading setup and analysis tools in this critical area,” he said.

Stuart Veale, Managing Partner at Beringea, said: “DeepCrawl has built a market-leading position over the past four years, with some impressive technical innovation and a roster of high-profile global clients. As the ecommerce market continues to grow, and as mobile becomes the primary online platform, brands will have to pay even more attention to optimising their sites for search performance to unlock additional revenues. DeepCrawl is well-placed to help them through this process. We’re pleased to support the team in its continued growth and success.”

For more information, visit DeepCrawl’s website:

www.deepcrawl.com

NEW INVESTMENT

“We completely overhauled the platform, rebuilding it from the ground up without reusing a single line of code from version 1.0. That’s set us up to provide our customers with even more innovative features – which is a vital foundation for our own continued growth. Beringea’s investment provides the support

we need to achieve that.”

Jon Myers, Chief Growth Officer at DeepCrawl


SMARTASSISTANT This Summer the ProVen VCTs invested in SMARTASSISTANT, a European start-up set to revolutionise purchasing decisions in the digital era by providing real-time, interactive advice across all channels.

NEW INVESTMENT

Linder, CEO, and Co-Founder at SMARTASSISTANT.

“Our technology simplifies decision-making and makes sure consumers and buyers get the best product or solution according to their specific needs. This personalised and needs-based approach ultimately helps our clients to become the go-to destination for expert advice within their domain of expertise.”

“The success we’ve had to date is a strong testament to the market’s growing need for intelligent Digital Advice solutions, and the last quarter was another record period, which resulted in a doubling of year over year annual recurring revenues. With further international expansion one of our key goals, Beringea is the perfect partner to help us on the next part of our journey. The team has significant experience in working with businesses like ours and combined with its presence in the U.S., Beringea is perfectly placed to help us further increase our footprint in our largest market.”

SMARTASSISTANT is now actively expanding its U.S.-based sales team in New York. It will continue to strengthen its ‘freemium’ offering, zuvoo.com, and its global solution partner network.

Eyal Malinger, Investment Director at Beringea, said: “SMARTASSISTANT’s universal appeal to companies across a broad set of industries, its proven track record in expanding internationally, and its already impressive client portfolio, are all clear indicators that C-suites are recognising the strong need to be more than just product or service providers in competitive and consolidation-prone markets.

‘Smart’ and artificially intelligent devices and services are increasingly becoming part of our everyday reality. Digitally advised or guided shopping, virtual assistants, and digital curated media experiences are designed to guide users through the myriad of choices offered by online retailers and services – helping them find what they are looking for more efficiently.

Many services, that once seemed to belong only within the realms of science fiction, are rapidly becoming helpful tools in our everyday lives.

Many theorise that this technology is proving so successful because it taps into a human desire to interact – to communicate – as well as tailoring our online experiences to make them efficient and pleasant.

SMARTASSISTANT’s cloud-based technology allows retailers and service providers to create personalised Digital Advisors, which can be integrated within a website, an app or feature on devices at physical points of sale, to support users in the decision-making process.

The Digital Advisors engage users in a personal dialogue, making appropriate recommendations based on the user’s preferences.

Whether buying a laptop, a kayak or a mobile data plan, SMARTASSISTANT Digital Advisors recommend products, services, and content based on their needs. This can reduce feelings of choice overload, confusion, and indecision which may occur when browsing the vast amount of options offered by many online marketplaces.

The technology incorporates insights from crowdsourced data,

automation features, and machine learning capabilities to optimise the process and improve accuracy. The innovative Software as a Service (SaaS) solution operates in virtually any language and has proven a success in hundreds of product areas. It is used by retailers, brands and service providers of all sizes, among them Microsoft, Canon, and T-Mobile.

The latest product developments include the implementation of interfaces to make SMARTASSISTANT’s advice capabilities available via rising technologies such as chatbots and voice-enabled assistants.

This summer Beringea, manager of the ProVen VCTs, led a €5million Series A funding round into SMARTASSISTANT. The investment will be used to continue the company’s global expansion and further growth of the U.S.-based team.

Founded in 2006 by Markus Linder, Svetlana Hollerer and Martin Schliefnig, with the mission to revolutionise and simplify decision-making, SMARTASSISTANT received early backing from a group of angel investors including Ariel Luedi, the former CEO of Hybris, an e-commerce software technology company acquired by SAP in 2013 - who is now Chairman of the company.

“As consumers and buyers, we appreciate the accessibility of information that digitisation has provided. But it has also brought with it an overwhelming amount of choice, which is already transforming how people make decisions,” said Markus



“Becoming a customer’s trusted advisor is one of the few remaining key areas to compete and differentiate, as total digitisation is only a matter of time. We’re delighted to be supporting SMARTASSISTANT in the next phase of its promising journey, and to be working alongside a group of fantastic angel investors.”

For more information visit SMARTASSISTANT’S website: www.smartassistant.com




This summer, Beringea realised the ProVen VCTs’ investment in Third Bridge, resulting in the largest sale proceeds to date for a ProVen VCTs investment.

INVESTMENT EXIT

THIRD BRIDGE EXIT

100 EMPLOYEES

200 EMPLOYEES

2012 2013 2014

HONG KONG OFFICE OPENS

LAUNCH OF INTELLIGENCE

PRODUCT

DELHI OFFICE MOVES TO

MUMBAI

COGNOLINK REBRANDS AS THIRD BRIDGE

SOME OF THIRD BRIDGE’S GROWTH MILESTONES SINCE THE PROVEN VCTs INVESTED IN 2012

The ProVen VCTs have realised their investment in portfolio company Third Bridge after a four-and-a-half year holding period. The realisation was part of a transaction in which IK Investment Partners acquired a minority stake in the fast-growing primary research provider.

Third Bridge provides its clients with unique insights into companies and markets through access to industry experts and market research. It currently serves a client bas e of over 300 customers, including private equity funds, consulting firms, hedge funds and corporates.

Third Bridge has a global footprint, with six offices covering America, Asia and Europe. Since inception in 2007, the company has doubled its turnover every two years and now employs more than 550 people.

Beringea invested in Third Bridge in 2012, through its ProVen VCTs. Between 2012 and 2016 the company’s revenues grew from £8.7 million to $67.4 million, an increase of c. 6x. Over the four-and-a-half-year life of Beringea’s investment, the number of employees has grown from c. 100 to over 550.

Stuart Veale, Managing Partner of Beringea commented: “The calibre of the management team at Third Bridge is exceptional and, from the start of our relationship, inspired us with confidence that the company would be successful. The experience across the founding team, and those that have been appointed to senior roles over the years, has driven strong and consistent growth for Third Bridge. I’ve enjoyed my time working with the company and supporting this growth as a director immensely. This deal is an exciting step for the founders, and it also provides some great returns to our VCT investors. I look forward to seeing Third Bridge continue its success in the future.”

Emmanuel Tahar, CEO and co-founder of Third Bridge, said: “We are grateful for Beringea’s support over the last four-and-a-half years as we continued to expand Third Bridge’s global footprint and develop our primary research offering. The new investment from IK will enable us to maintain this strong performance, and bring us closer to our vision of being the first port of call for investors seeking the best intelligence.”



INVESTMENT EXIT

500 EMPLOYEES

2015 2016 2017

DELHI OFFICE MOVES TO

MUMBAI

COGNOLINK REBRANDS AS THIRD BRIDGE

INTERNATIONAL TRACK AWARD

FAST TRACK AWARD

PROVEN VCTS EXIT

SOME OF THIRD BRIDGE’S GROWTH MILESTONES SINCE THE PROVEN VCTs INVESTED IN 2012


INVESTMENT EXIT

The ProVen VCTs have realised their investment in APM Healthcare, following Day Lewis Pharmacy’s acquisition of the business and resulting in a 3x return for ProVen shareholders.

The sale saw Day Lewis Pharmacy, a national pharmacy chain, take over APM Healthcare’s 18 UK pharmacies, which run in Joint Venture Partnerships with GP practices across the country.

Trading under the name Community Pharmacies, APM Healthcare was founded in 2009. The ProVen VCTs initially invested in the company in 2011, when APM was on the verge of expanding its network from just one pharmacy, having secured a number of deals with local doctors. The expertise of Andrew Murray – who previously founded and built Assura Pharmacy, part of the FTSE listed Assura Group – helped to extend the network to what it is today. The ProVen VCTs made a number of follow on investments to support the growth, totalling £2m in equity and debt financing.

The investment realisation has generated a 3x return for Beringea, and will help Day Lewis to extend its network to over three hundred pharmacies across the UK.

“We’ve seen APM Healthcare grow into an incredibly successful business over the course of our six-year relationship,” said Steven Tuckley, Chief Financial Officer at Beringea LLP. “Andrew’s experience has been invaluable

to the business, making for a strong and well-researched proposition, tight control on operational costs, and the ability to secure partnerships with the NHS. This, combined with having a clear exit strategy from the beginning, has made APM Healthcare an excellent investment for Beringea.

“As part of Day Lewis, APM can continue delivering a first class service to patients and we’re excited to see how they develop together going forward.”

Day Lewis is an independent, family-owned business that has been operating in the pharmaceutical sector for over forty years. The acquisition of APM will help the business reach more health centres and GP surgeries, working to improve pharmacy facilities for more NHS patients.

Andrew Murray, Managing Director of APM Healthcare, said: “This deal will give our pharmacies broader operational expertise, and the alignment in our cultures and business goals will also ensure our people get the support they need to continue offering exemplary service to patients. We’re incredibly grateful to Beringea for its support in our growth so far, which would have been simply unachievable without them, and we look forward to the journey ahead with Day Lewis.”

APM HEALTHCARE EXIT ACHIEVES 3X RETURN




The ProVen VCTs have sold their investment in MatsSoft, a ‘low-code’ software company that enables brands like Vodafone, Nationwide, ITV and the Department for Education to build web and mobile applications with minimal coding.

The exit occurred as Netcall – a multichannel customer engagement solutions provider – acquired 100per cent of the equity in MatsSoft.

Founded in 2008, MatsSoft has built up an impressive roster of clients, and is named one of “The 14 Providers That Matter Most” in the Low-code Wave published by Forrester Research. According to Forrester, companies report that their Low-code platforms helped them accelerate development by five to 10 times.

MatsSoft’s low-code software development platform (MATs) enables rapid delivery of enterprise-grade business applications with a minimum of hard coding and upfront investment. This addresses the growing gap between the demands of organisations for business applications and the resources available to deliver these solutions.

Beringea has supported the growth of MatsSoft over the last six years, investing over £2m via its ProVen VCTs in 2011 and 2012. The acquisition, by Netcall, allows Beringea to realise its investment, delivering healthy returns for VCT shareholders. It will allow Netcall to extend its offering to clients in the public and private sectors, as well as access the rapidly growing low-code market, which Forrester predicts will grow to over $21billion in the next five years.

Commenting on the realisation, Rob Dagger, Investment Manager at Beringea, said:

“MatsSoft was one of the first providers in the now rapidly expanding low-code market. The impressive management team and flexibility of the MATs platform to support a wide range of business applications has allowed the company to secure big name clients across a range of industries. It’s been great to work alongside them and Beringea is delighted to have been able to support the growth of the company over the last six years.”

MATSSOFT EXIT

MatsSoft’s MATs provides all the components its clients need to build, deploy and improve business applications without coding. It’s designed to be quick to learn and easy to use and give its clients the freedom to create, deploy and improve digital applications faster and cheaper than ‘hard code’ options.

WHAT IS MATS?

INVESTMENT EXIT


THE ROLE OF THE VCT INVESTMENT MANAGER

VCT FOCUS

There has been some commentary in the financial press questioning the level of fees charged for managing Venture Capital Trusts. Some commentators - possibly those unfamiliar with VCTs and how they work - have expressed surprise that VCTs tend to charge around 2% p.a. compared to 0.75% which is typically charged by funds investing in public companies quoted on the stock exchange.

However, non-AIM VCTs, like the Proven VCTS, are very different from funds investing in quoted public companies, so a direct comparison between the fee structures is misleading. Non-AIM VCTs are specialist investment vehicles, investing in small/medium sized illiquid private companies, which must comply with complex regulations.

Whereas, fund managers investing in quoted companies can select and trade quoted shares electronically in a fraction of a second online, the process of selecting and investing in privately held businesses is very different and takes substantially longer, often several months.

Non-AIM VCT investment managers first need to seek out new opportunities for investment then apply a rigorous investment process and undertake extensive due diligence before making an investment in a private company. After the initial investment is made, they then need to work in partnership with that company during the life of the investment before finally steering it through the exit/sale process.

Because of this, the amount of skilled resource needed to manage non-AIM VCT investment is substantially greater than for the equivalent amount invested in a quoted company. By way of example, the investment team of a fund manager managing several billion in capital and investing in quoted shares can comprise just five executives. The ProVen VCTs, with capital of £200m require an investment team more than double this size.

The fees charged by VCT managers therefore reflect the additional cost of this resource.

This article explains in more detail what is involved in creating and managing a portfolio of VCT investments.

INVESTMENT PROCESS

Our investment team reviews a huge number of opportunities, with the objective of making 10-15 new investments for the ProVen VCTs each year.

On average 1500 opportunities are initially analysed against general investment criteria and filtered down to around 800, which we look at in more detail. We may then hold initial meetings with the management team and share an overview of the opportunity within the investment team for feedback. About 200 investment proposals are then

selected for due diligence, where we will review the market, competition, financials and financial model and make an initial assessment as to the quality of the team.

A major consideration in any investment we make is the strength and vision of the management team. Our role is ultimately to invest in people—people who are passionate about their business and have the skills, drive and intelligence to succeed.

Following the initial due diligence, we are likely to have highlighted 60 investment opportunities we feel demonstrate real potential for VCT investment. We explore these in more detail and share details with the ProVen VCTs’ boards of directors - highlighting both the investment case and key risks or issues we may have identified.

We start to discuss terms with about half of the opportunities that reach this level. We carry out further site visits and management meetings, take customer references, study the market segment in more depth and undertake rigorous model testing. We’ll produce investment papers on 20 of these opportunities and seek Investment Committee approval before initiating third party due diligence on about 15. The third party due diligence comprises comprehensive evaluation of financial, legal and possibly sector specific/ regulatory issues. We also continue our own internal processes. Finally, we invest in 10 -15 opportunities we believe will make suitable additions to the ProVen VCTs’ portfolio of companies.

After the deal is completed our investment team still has an active role. Committed to working in partnership with our portfolio companies, Beringea almost always takes a seat on the board of the companies we invest in. As well as allowing us to oversee the general health of the ProVen VCTs investment, we can help to evaluate expansion and growth plans, assist with recruitment and bring to the table our considerable expertise in dealing with the numerous challenges faced by growing businesses.

We are also able to leverage our extensive network, offering a number of networking opportunities and sector-specific events. We run our own annual ‘Invested’ Portfolio



Conference and provide dedicated online resources for our entrepreneurs.

When the company is ready to take the next step, we are able to support and manage the exit process.

SHAREHOLDER OBJECTIVES AND PORTFOLIO MANAGEMENT

As well as considering the growth potential and commercial viability of the companies we invest in – we only invest in opportunities that we believe offer the potential for great returns. We are committed to securing the best possible deal for our shareholders.

Shareholder objectives are often broadly aligned with those of the business - both are aiming for the company to grow and fulfil its potential.

But there are key points we do need to consider from the VCTs’ perspective – for example are we able to negotiate an attractive entry price for the VCTs? Might we have the opportunity to structure the investment with a proportion of secured loan notes in order to reduce risk?

The ProVen VCTs invest across a range of sectors and we are careful to create a balanced portfolio to help reduce risk. Within this balanced framework, however, the opportunities presented by some sectors, such as digital technology, remain a particular area of focus and success for us. We therefore, look to manage the portfolio so as to benefit from these areas without exposing our shareholders to an inappropriate level of concentration. We also have to ensure that our investments are in line with the Government’s VCT regulations and deal with any regulatory issues that may arise.

New Investment Process

AnalysisRevenueGrowthManagementUK presence

Initial DDQuality of team and planMarketCompetition FinancialsForward model

Terms & DDContinued site visits and management meetingsCustomer referencesMarket studyModel testing

3rd Party DDFinancial DDLegal DDTech DDContinued internal diligence

Deal FlowShare overview of businessBegin diligenceManagement meetings

Fast Forward

Investment Paper

1500800

20060

2030

15

Closing

10

• Number of deals at each investment stage

TRENDS AND SECTOR EXPERTISE

For the ProVen VCTs, Beringea tends to look for companies in industries undergoing fundamental change – often driven by new technology or consumer behaviour. These dynamic sectors are moving at a rapid pace and our investment team therefore need to constantly be abreast of change within these sectors, as well as being able to assess the market for new areas of possible opportunity. Our sector expertise, in areas such as digital technology for example, makes us a compelling investment partner, differentiating us from other investors and allowing us to secure some very attractive investment opportunities.

OUTSTANDING TEAM

We have an outstanding, award-winning investment team – several of whom have personal experience as an entrepreneur, as well as professional private equity experience. They are supported by exceptional finance and operations staff who deal with the regulatory reporting and management for the VCTs, investor relations, fundraising activities and shareholder communications.

Beringea aims to provide excellent value-for-money management of the ProVen VCTs, in return for the management fees it receives. Our rigorous investment processes, our commitment to working in partnership with our portfolio companies for the life of the investment and our award-winning team have enabled us to deliver some great returns for the ProVen VCTs’ shareholders.

For more information visit Beringea’s website www.beringea.co.uk



VCT FOCUS


SPECIAL FOCUS

PATIENT CAPITAL - PORTFOLIO EXAMPLES

The Patient Capital Review

Chess Technologies – a specialist manufacturing company providing leading-edge solutions for the defence industry, which has been an investment for nine years. When the ProVen VCTs invested in Chess in 2008, turnover was £1.8 million and it had 26 employees. With support from the ProVen VCTs, revenue has grown to nearly £17 million in the last financial year, with 98 employees. More than 50 per cent of the company’s sales are exports.

The Government is currently undertaking a review of the availability of ‘Patient Capital’, with the objective of ensuring that high growth innovative businesses can access the long-term capital that they need.

Amongst other things, this review will evaluate the existing tax reliefs aimed at encouraging investment and entrepreneurship, to make sure that they are effective, well targeted and provide value for money. This will include a review of the VCT scheme.

We believe that VCTs are an ideal vehicle for the provision of Patient Capital for early-stage, high-growth SMEs. Unlike other types of venture capital funds, VCTs do not have any limitations on the period of investment and the underlying investments do not

need to be sold to provide liquidity for shareholders. In addition, the tax-free nature of the VCT dividends encourage shareholders to retain their investment. Many investors in the ProVen VCTs have held their investments for over ten years. VCTs consequently have helped nurture an important and growing source of long term patient capital from retail investors.

Beringea has made a detailed contribution to the consultation, highlighting the successful role VCTs are playing in providing Patient Capital to fast growing, dynamic SMEs in the UK.

The outcomes of the review, including any implications for the VCT scheme, will be announced in the budget on 22nd November 2017. While it is possible that there may be some significant

changes to the VCT scheme, we hope that the Government will recognise the valuable role VCTs play in supporting the growth of businesses across the UK economy, and not do anything to jeopardise this.

Shane Elliott Partner, Beringea LLP

Espresso Group – a provider of educational video content for schools, which was an investment for 12 years. The ProVen VCTs invested in Espresso in 2001, when its turnover was less than £1 million. It subsequently grew to provide educational video to around half of UK primary schools, as well as schools in the USA and Sweden. By the time it was sold in 2013 it had annual revenues of £13.5 million and employed 130 people.


Important NoticeAn investment in ProVen VCT and ProVen Growth & Income VCT involves risk and is not suitable for all investors. Potential investors are advised to seek advice from an authorised financial advisor before investing. Please refer to the Risk Warnings on the back of this document and in the Offer Document.

PROVEN VCT PLC & PROVEN GROWTH & INCOME VCT PLCOFFERS TAX YEAR 2017/18

THE OFFER This Autumn we are launching two small share offers. These will seek to raise a maximum of €5m (approximately £4.5m) for

each of ProVen VCT plc and ProVen Growth & Income VCT plc (PGI VCT).

ProVen VCT and PGI VCT are long established VCTs, launched in 2000 and 2001 respectively. Both VCTs have an existing

diversified portfolio, have a target dividend yield of 5% pa(1) and are managed by award winning manager Beringea LLP.

The ProVen VCTs aim to provide investors with a higher return than they could achieve by investing in a portfolio of quoted

shares, by investing in a diversified portfolio of unquoted companies selected as having the potential for rapid growth.

The returns generated from the investment portfolio are enhanced by a range of attractive tax benefits, including 30%

income tax relief on the initial investment and tax free dividends (2).

SHAREHOLDER OFFER DETAILS

• The Offers will open to current shareholders in the ProVen VCTs on the 20 October 2017(3).

• The Offers will then open to other potential investors on the 9 November 2017

• Both Offers close at 1pm on 20 December 2017 unless fully subscribed earlier.

• Current shareholders with the ProVen VCTs will benefit from a 1 per cent discount to thenormal offer price, which will be given in the form of additional shares.

(1)The target dividend yield is a target and is not guaranteed. The ProVen VCTs may pay a lower dividend than the target, or no dividend at all. (2)The tax reliefs quoted are based on current legislation, which may change. (3)We anticipate that there will be high demand for these Offers. While there is an initial period in which existing shareholders will have priority, shares will be allocated on a first-come first-served basis so there is no guarantee that applications received

during this period will be accepted.

PLEASE SPEAK TO YOUR ADVISER OR CONTACT US FOR MORE INFORMATION

For more information call Beringea on 020 7845 7820, email [email protected] or visit www.provenvcts.co.uk


This newsletter has been approved by Beringea LLP (“Beringea”). The information and opinions contained herein were prepared by Beringea. The information herein is believed by Beringea to be reliable and has been obtained, where possible, from public sources believed to be reliable. However, Beringea makes no representation as to the accuracy or completeness of such information. Copyright© October 2017 Beringea LLP. Beringea LLP is authorised and regulated by the Financial Conduct Authority (FRN496358). Beringea LLP’s registered office is 39 Earlham Street, London, WC2H 9LT

For more information please call us on:020 7845 7820, or email [email protected] visit www.provenvcts.co.uk

Write to: ProVen News, 39 Earlham Street, London, WC2H 9LT

Beringea is an international venture and growth capital investment firmwith offices in London and Michigan (U.S.).

London Office39 Earlham Street LondonWC2H 9LTt:+44 (0) 20 7845 7820 e: [email protected]

Michigan Office32330 W.12 Mile Road Farmington Hills Michigan 48334t:+1 248 489 9000

Risk Warning – ProVen VCT plc & ProVen Growth & Income VCT plcVenture Capital Trusts (VCTs) are not suitable for all investors. If you are in any doubt about the suitability of an investment in a VCT you should consult an authorised Independent Financial Adviser. The sale of VCT shares within 5 years will result in the loss of the initial tax relief, so an investment in a VCT should be considered a long-term investment. The value of shares in a VCT may fluctuate and you may not get back the amount you invested. There is no certainty as to the level of dividends. You may have difficulty selling your shares and any sale is likely to be at a discount to the net asset value. VCTs invest in a portfolio of small companies, which by their nature carry greater risk than larger, quoted companies. The dividends paid to shareholders may exceed the VCT’s net income from investment (after the cost of running the VCT) in which case the net asset value per share may fall. The continuing entitlement of shareholders to the VCT tax reliefs is dependent on the VCT maintaining its status as a VCT. The legislation relating to VCTs may change, including changes to tax reliefs available to investors in VCTs and to the types of investments which VCTs are permitted to make, which may increase the risk of an investment in a VCT. Such changes may be retrospective.


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AUTUMN 2017 THIRD BRIDGE EXIT - provenvcts.co.uk€¦ · programmatic advertising of the future. Since summer 2015, Honeycomb has worked closely with Sky and Sky Media to syndicate