Venture capital firm launches new fundraising round with £20m potential

John Davies

Seneca Growth Capital VCT, the generalist VCT specialising in expansion capital managed by Seneca Partners, has launched a new offer for subscription for its B shares to raise £10m, with an over-allotment facility to raise up to a further £10m.

Haydock-based Seneca says investors will gain access to some of the UK’s most innovative growing businesses, via a diverse portfolio of established, private and AIM quoted businesses.

The VCT aims to provide investors with an attractive income stream as well as capital growth over the longer term, by targeting established, well managed businesses with strong and proven leadership teams that can demonstrate established concepts and are seeking an injection of growth capital to support their continued development.

Seneca is an experienced growth capital investor having deployed around £100m into more than 50 SME companies, through more than 100 funding rounds as at June 30, 2020.

Its strong network and extensive footprint in the Northern regions of the UK provides excellent proprietary deal flow and opportunity for investors seeking regional exposure to growth opportunities within a VCT, it says.

Directors of the VCT and Seneca and key members of the management team are also invested in the VCT.

Since launch in 2018, the VCT has already established an exit track record with three full and partial exits with returns of 2.1x, 1.5x and 1.6x, respectively.

In addition, 4.5p dividends have been paid over an 18-month period with a target to maintain dividends of at least 3p per annum in relation to the B Shares and an ambition to increase this to around five per cent per annum of the B Share NAV by 2023.

John Davies, investment manager, Seneca Partners, said: “With a strong pipeline of opportunities currently in due diligence, we believe we will continue to find attractive investment opportunities in innovative growth businesses for the VCT portfolio.

“We expect to see an increase in the number of businesses seeking investment to support their growth plans over the next year, as they react and adapt to this ever-changing economic climate.

“Having delivered against its strategic objectives since launch, and with c.50% of the B Share pool net assets in cash, we believe that the VCT is now well positioned to take advantage of new post-COVID investment opportunities and deliver capital growth and dividends.”