WEBVTT - When to Invest in Venture Capital Trusts 0:00:02.720 --> 0:00:17.440 Bloomberg Audio Studios, podcasts, radio news. Welcome to Meron Talks 0:00:17.480 --> 0:00:20.080 Your Money, the personal finance edion of Meron talks Money. 0:00:20.200 --> 0:00:22.680 In these bonus podcasts, we talk about the best strategudes 0:00:22.680 --> 0:00:25.799 we're making the most of your money. Meren, suset Web. 0:00:26.440 --> 0:00:29.880 So this week we're talking about venture capital trust or VCTs. 0:00:30.080 --> 0:00:32.519 A few of you've written in asking us about. 0:00:32.360 --> 0:00:34.880 VCTs, what do they do? How do I get them? 0:00:35.000 --> 0:00:36.360 So we thought it'd be a good time to bring 0:00:36.360 --> 0:00:38.839 in an external voice to talk to us about exactly 0:00:38.880 --> 0:00:41.559 what VCTs are and if it can offer some of 0:00:41.600 --> 0:00:45.320 you a more tax efficient investment option, then maybe pensions, 0:00:45.360 --> 0:00:47.239 particularly in light of the changes we saw in the 0:00:47.280 --> 0:00:50.160 autumn budget, which of course increased some of the tax 0:00:50.200 --> 0:00:54.480 penalties on pensions. So with me today Tony DAHLWOOD'SO Gresham House, 0:00:54.480 --> 0:00:57.680 Gresham House and a specialist alternative asset manager managing a 0:00:57.760 --> 0:01:02.280 variety of VCTs. Two barrels ME VCTs and two Mobius VCTs. 0:01:02.480 --> 0:01:05.000 Welcome Tony, Thank you so much for joining us today 0:01:05.120 --> 0:01:07.360 on what is a relatively complicated subject. 0:01:07.680 --> 0:01:08.959 Real pleasure to be here, Meren. 0:01:09.319 --> 0:01:11.679 Okay, I'm going to start with one of those big 0:01:11.800 --> 0:01:14.440 questions that people find of putting. But you're so expert 0:01:14.480 --> 0:01:16.720 that I know you're not going to find it off putting, Tony. 0:01:17.000 --> 0:01:18.560 What is a VCT? 0:01:19.560 --> 0:01:23.200 So VCT starts a venture capital trust. Venture capital trusts 0:01:23.400 --> 0:01:27.160 are listed vehicles which are tax efficient ways of investing 0:01:27.200 --> 0:01:32.440 in early stage growth companies, primarily private companies, small private companies. 0:01:32.720 --> 0:01:36.160 But there are some AIM VCTs as well that invest 0:01:36.240 --> 0:01:40.320 in AIM for those companies that are eligible to be vctable, 0:01:40.400 --> 0:01:41.000 so to speak. 0:01:41.480 --> 0:01:44.160 I'm interrupting you already because we are super basic here. 0:01:44.400 --> 0:01:45.720 What is it aim? 0:01:46.240 --> 0:01:49.520 AIM is the alternative investment market of the London Stock Exchange, 0:01:49.680 --> 0:01:54.480 typically early stage companies that are starting on their journey 0:01:54.480 --> 0:01:54.960 for growth. 0:01:55.640 --> 0:01:58.640 Okay, so an AIM company is a listed company, but 0:01:58.800 --> 0:02:00.520 not a fully listed company. 0:02:01.280 --> 0:02:05.600 Correct. It has certainly slightly different rules, but typically it's 0:02:05.600 --> 0:02:08.320 an easier way of getting listed and access for the 0:02:08.320 --> 0:02:12.280 public to buy and sell shares in that AIM listed company. 0:02:13.160 --> 0:02:15.920 As I say, the primarily most VCTs are made up 0:02:15.960 --> 0:02:20.160 of private companies, unlisted companies, small ones with growth ambitions. 0:02:20.960 --> 0:02:23.520 Okay, So what then, is the difference between a VCT 0:02:23.720 --> 0:02:25.320 and a private equity trust? 0:02:25.960 --> 0:02:29.120 So that many private equity trusts listed ones three eyes 0:02:29.120 --> 0:02:32.760 an example of that, and these are trusts that typically 0:02:32.919 --> 0:02:37.799 hold private companies in a listed structure. Three three eyes 0:02:37.880 --> 0:02:40.280 cases a London Stock Exchange the main list, and you 0:02:40.320 --> 0:02:43.360 can access buying those shares on the London Stock Exchange 0:02:43.400 --> 0:02:46.919 and you're getting exposure to the underlying companies like three I. 0:02:47.040 --> 0:02:49.760 The biggest exposure you'll have on three I is a 0:02:49.880 --> 0:02:54.280 Dutch supermarket business called Action. So you have many different 0:02:54.320 --> 0:02:57.840 private equity trusts that give you underlying private equity exposure 0:02:57.960 --> 0:02:59.040 through a listed vehicle. 0:02:59.320 --> 0:03:01.320 Okay, still it's the same idea. 0:03:01.360 --> 0:03:05.720 You've got private companies, unlitted companies wrapped up insider trust. 0:03:06.919 --> 0:03:10.280 Correct. And the difference between a VCT and they standard 0:03:10.480 --> 0:03:15.440 private equity trust like three I or Htree Capital Trust 0:03:15.639 --> 0:03:20.000 would be that the VCTs are tax efficients. The VCTs 0:03:20.040 --> 0:03:24.160 offer thirty percent income tax relief when you buy new shares, 0:03:24.600 --> 0:03:28.680 and they provide in some respects more more flexibility than 0:03:28.840 --> 0:03:30.800 some of the pension tax changes that are happening at 0:03:30.800 --> 0:03:34.480 the moment, So you have some tax relief by investing 0:03:34.480 --> 0:03:39.040 in the new shares to then support the UK's ecosystem 0:03:39.480 --> 0:03:41.360 of growth. Small companies. 0:03:41.920 --> 0:03:44.680 Okay, So tax release is offered by the government in 0:03:44.800 --> 0:03:48.040 order to encourage us to put our money into smaller 0:03:48.040 --> 0:03:51.400 companies to help them grow. Right, So let's talk about 0:03:51.440 --> 0:03:56.480 how that tax relief works. So I buy new shares 0:03:56.840 --> 0:04:00.280 in a new launch VCT, I put the money in, 0:04:00.560 --> 0:04:03.880 and I can then apply to get the tax I've 0:04:03.920 --> 0:04:06.800 already paid back the income tax I've already paid back. 0:04:07.440 --> 0:04:09.760 So you put one hundred pounds in to the new shares, 0:04:09.840 --> 0:04:12.160 you'd get the shares worth one hundred pounds, and then 0:04:12.160 --> 0:04:15.840 for your h MRC submission, you would then be able 0:04:16.200 --> 0:04:19.800 to indicate that you've bought one hundred pounds worth and 0:04:19.839 --> 0:04:22.880 you'll be able to claim back thirty pounds offset against 0:04:22.920 --> 0:04:25.880 whatever income tax liability you were had in totality for 0:04:25.960 --> 0:04:28.440 your own personal affairs, as. 0:04:28.240 --> 0:04:30.200 Long as I paid that much income tax over the 0:04:30.279 --> 0:04:35.360 year obviously, right, Okay, correct, And there is also a 0:04:35.480 --> 0:04:37.479 capital gains tax relief here as well. 0:04:37.560 --> 0:04:39.279 Right correct. 0:04:39.360 --> 0:04:42.520 So if and when you make money on the shares 0:04:42.800 --> 0:04:45.239 in due course, you must hold them for five years. 0:04:45.279 --> 0:04:47.440 It's an important point. So once you invested, you must 0:04:47.440 --> 0:04:49.800 hold them for five years. Once you held them and 0:04:49.839 --> 0:04:52.400 you make a capital game, there is that a zero 0:04:52.560 --> 0:04:57.400 capital gains tax on that? As well? As these investment 0:04:57.760 --> 0:05:04.200 VCTs do pay dividends, and you're also have income tax 0:05:04.240 --> 0:05:05.560 free dividends. 0:05:06.600 --> 0:05:09.719 Okay, So I don't pay capital gains on any gains 0:05:09.880 --> 0:05:11.920 and I don't pay any income tax on the dividends 0:05:11.920 --> 0:05:12.360 that I get. 0:05:13.520 --> 0:05:15.720 Correct, quite big benefits. 0:05:16.160 --> 0:05:18.839 Let's say that I have bought shares in one of 0:05:18.839 --> 0:05:23.240 your VCTs on launch. After five years, I want to 0:05:23.279 --> 0:05:25.800 sell them. Who do I sell them to? Who is 0:05:25.839 --> 0:05:28.239 going to buy the stuff? Without the tax relief? 0:05:28.680 --> 0:05:31.640 There is a liquid market to some degree, but as 0:05:31.680 --> 0:05:35.159 you say, sometimes that isn't there. The company themselves have 0:05:35.200 --> 0:05:38.880 a buyback mechanisms, so they often step into the market 0:05:38.960 --> 0:05:43.000 and buy from their balance sheet from realized gains from 0:05:43.080 --> 0:05:45.880 exited investments on their balance sheet, okay. 0:05:45.960 --> 0:05:49.279 Or perhaps do VCTs have a set life and that 0:05:49.360 --> 0:05:51.440 will wind it up after five years or ten years 0:05:51.480 --> 0:05:52.520 and you will get your money back. 0:05:53.440 --> 0:05:56.840 Some may do. Typically they are evergreen, which means they 0:05:56.839 --> 0:06:01.920 carry on until the boards decide in consultation with shareholders 0:06:01.920 --> 0:06:03.000 that something should change. 0:06:03.240 --> 0:06:03.600 Okay. 0:06:03.839 --> 0:06:07.159 So there could be situations where you buy into your 0:06:07.240 --> 0:06:10.799 VCT at the beginning, you get your income tax relief, 0:06:10.880 --> 0:06:12.880 and maybe you get your capital gains tax relief. 0:06:12.880 --> 0:06:15.720 You've had your tax free dividends, etc. 0:06:16.279 --> 0:06:19.000 All marvelous, but when you come to wanting to sell, 0:06:19.120 --> 0:06:21.120 you may end up doing that at a discount to 0:06:21.160 --> 0:06:23.560 the net as at value, which would make to a 0:06:23.640 --> 0:06:27.000 degree of set your tax benefits that is possible. 0:06:27.720 --> 0:06:30.400 You know, typically the buybacks, if you look at happen 0:06:30.640 --> 0:06:33.760 much closer to NAV than the average discount on investment trusts. 0:06:34.560 --> 0:06:37.520 You know, five percent maybe a number that I have 0:06:37.640 --> 0:06:40.279 in my head, but it's but you're right there that 0:06:40.360 --> 0:06:42.839 you don't always get your money back at NAV. So 0:06:42.880 --> 0:06:46.000 the important bit is one that the NAV has grown 0:06:46.040 --> 0:06:48.600 over that five ten year period that you hold the shares. 0:06:48.800 --> 0:06:52.000 And then two, what is the commitment by the board 0:06:52.040 --> 0:06:54.880 and the company to buy back shares or provide a 0:06:54.920 --> 0:06:57.800 secondary market in those shares to be brought by other people. 0:06:58.520 --> 0:07:01.200 Okay, And the other thing that we should talk about 0:07:01.240 --> 0:07:03.760 is the fee structure, because it tends to be that 0:07:03.880 --> 0:07:07.640 VCTs are very significantly more expensive than other types of 0:07:08.120 --> 0:07:11.840 listed investment vehicle. So a big listed investment trust that 0:07:11.920 --> 0:07:16.800 say invested in liquid UK equities or dividend paying equities 0:07:16.880 --> 0:07:19.440 or something like that would tend to have a total 0:07:19.440 --> 0:07:22.200 expense ratio of below one percent, but you would expect 0:07:22.360 --> 0:07:25.920 vct to have a total expense ratio much much higher 0:07:25.960 --> 0:07:26.200 than that. 0:07:26.680 --> 0:07:30.760 You're correct. There is the intensity and resourcing required to 0:07:30.800 --> 0:07:34.720 invest in private equity companies and small ones is much 0:07:34.760 --> 0:07:37.640 greater than buying and selling shares on the London Stock Exchange. 0:07:38.200 --> 0:07:41.040 As a result of that, the fees tend to be higher. 0:07:41.200 --> 0:07:43.880 Private equity fees as a whole tend to be higher. 0:07:43.920 --> 0:07:47.080 If you look at the unlisted market as well, you'll 0:07:47.120 --> 0:07:49.480 see them and they can range typically between one and 0:07:49.480 --> 0:07:51.360 a half and two and a half percent, and they 0:07:51.400 --> 0:07:53.720 will have some performance fees typically as. 0:07:53.640 --> 0:07:57.520 Well, so you'll get that management fee maybe two percent, 0:07:57.760 --> 0:08:00.320 possibly a performance feel on top of that. And there 0:08:00.400 --> 0:08:03.480 are other charges around the edge. I remember reading a 0:08:03.480 --> 0:08:06.400 while bag that a lot of VCTs will also charge 0:08:06.440 --> 0:08:08.520 the companies in which they invest a couple of percent 0:08:08.520 --> 0:08:10.880 a year for the input that they give to them, 0:08:10.920 --> 0:08:12.480 for example, and that's going to come back in the 0:08:12.600 --> 0:08:14.400 end as a charge on the end investor. 0:08:14.880 --> 0:08:17.720 Effectively, well, it's a charge to the company typically that 0:08:17.960 --> 0:08:22.560 the company underline company pays for could be board representation 0:08:23.040 --> 0:08:26.760 or value creation plans, or advisory work or strategic work, 0:08:27.000 --> 0:08:30.640 and that's charged typically to the company themselves. 0:08:30.840 --> 0:08:32.600 Yeah, but it's an expense, if an expense of the 0:08:32.600 --> 0:08:34.640 company's an expense to the investor in the company, right, 0:08:34.640 --> 0:08:35.959 So it all ends up in the same place. 0:08:36.320 --> 0:08:39.240 So there is but there is a degree of tolerance. 0:08:38.760 --> 0:08:41.800 Among investors too, higher fees to higher cost dignificounts, etc. 0:08:42.040 --> 0:08:45.280 Because you're getting such a great tax rebate along the 0:08:45.320 --> 0:08:47.920 way that It's not that fees are not quite the 0:08:48.000 --> 0:08:50.199 issue with the VCT as they are with other types 0:08:50.200 --> 0:08:50.720 of vehicle. 0:08:51.760 --> 0:08:54.240 I think fees are all always an issue for an investor, 0:08:54.280 --> 0:08:56.600 so they're always under a scrutiny. They's certainly not be 0:08:56.640 --> 0:08:59.520 dismissed by boar boards do their producer job and make 0:08:59.559 --> 0:09:02.080 sure that the manager is held to account for its fees. 0:09:02.559 --> 0:09:06.080 But the market price of the fees are pretty well transparent. 0:09:06.600 --> 0:09:09.760 Private equity fees are pretty transparent, and they're all in 0:09:09.520 --> 0:09:10.520 in that region. 0:09:11.400 --> 0:09:13.920 All right. So performance, how's it been? 0:09:14.280 --> 0:09:16.760 Well, it varies. I mean, it depends on the manager 0:09:17.000 --> 0:09:18.720 and it depends on the type of it. As sectors 0:09:18.760 --> 0:09:24.240 you're exposed to. Some the last few years may been 0:09:24.280 --> 0:09:27.680 affected by COVID. You know, small companies with stretched balance 0:09:27.720 --> 0:09:30.480 sheets that went through COVID in a tough time. So 0:09:30.800 --> 0:09:34.120 I'd say the last few years, some companies, some VCTs 0:09:34.120 --> 0:09:37.120 have done quite well, are m Mobius, VTTMI receptionally well 0:09:38.160 --> 0:09:42.480 and some of the others have probably had a tough time, 0:09:42.520 --> 0:09:44.360 but they're still doing what they say in the team. 0:09:44.360 --> 0:09:46.480 And I think it's really important to remember these are 0:09:46.480 --> 0:09:50.040 not short term investments. You must have a long term 0:09:50.040 --> 0:09:51.600 horizon when investing in them. 0:09:52.160 --> 0:09:53.240 What do you mean by long term? 0:09:53.280 --> 0:09:55.640 Is that five years, well, at least five years for 0:09:55.679 --> 0:09:56.080 a VCT. 0:09:56.280 --> 0:09:58.600 You can't get the tax benefits without that, But I 0:09:58.600 --> 0:10:01.800 would say much longer. And you but or trusts typically 0:10:01.920 --> 0:10:04.439 not trust but venture capital itself. You go for a 0:10:04.520 --> 0:10:07.959 very diverse, fied portfolio because of the high risks associated 0:10:07.960 --> 0:10:09.839 with the online companies, and you should look at it 0:10:09.920 --> 0:10:11.760 typically at ten to fifteen year horizon. 0:10:12.480 --> 0:10:17.560 Okay, I'm still I'm still wondering about how long a 0:10:17.720 --> 0:10:20.760 VCT lasts, and that, let's say after fifty I say 0:10:20.840 --> 0:10:23.640 fifteen years is the long term. Pretty much everyone who 0:10:23.720 --> 0:10:27.439 might have invested when that VCT was launched might want 0:10:27.440 --> 0:10:29.880 to be out by the end of fifteen years, So 0:10:29.920 --> 0:10:34.200 who are the investors after that? Who holds a VCT 0:10:34.800 --> 0:10:36.120 after fifteen years. 0:10:36.320 --> 0:10:39.800 Well, some people still retain them after fifteen years because 0:10:39.800 --> 0:10:43.120 they could be investing, you know, in their thirties and forties, 0:10:43.800 --> 0:10:45.920 and they can hold them well into pensions, so they 0:10:45.960 --> 0:10:48.040 can hold them for you know, twenty to thirty years. 0:10:48.080 --> 0:10:51.040 I mean, Baron's meeds been going since nineteen ninety five, 0:10:51.559 --> 0:10:54.200 so you've got something that's approached you thirty years and 0:10:54.240 --> 0:10:56.640 I think some people are still holding them from day one, 0:10:56.880 --> 0:10:59.240 So I think there is a range of investor. I 0:10:59.240 --> 0:11:02.679 think it's important this is this is an important point 0:11:02.920 --> 0:11:06.120 that people need to recognize that this is a benefit 0:11:06.200 --> 0:11:09.720 to both themselves from financial returns but also society in 0:11:09.720 --> 0:11:13.680 the UK for ecosystems of early growth companies that contribute 0:11:13.679 --> 0:11:15.920 to economic growth, and they are it's a very very 0:11:15.920 --> 0:11:18.360 important part of UK society. 0:11:18.559 --> 0:11:21.000 Because there is that funding gap for smaller companies in 0:11:21.040 --> 0:11:21.360 the UK. 0:11:22.240 --> 0:11:24.920 Yeah, because because over history of UK has been at 0:11:24.960 --> 0:11:29.920 the forefront of finance, provision, healthcare, innovation, and VCTs are 0:11:29.960 --> 0:11:32.360 there to catalyze some of that as well. And I 0:11:32.400 --> 0:11:35.679 think you know, with the work we're competing in a 0:11:35.920 --> 0:11:40.000 global marketplace. The US is now the default for technology 0:11:40.080 --> 0:11:43.600 and early stage related growth companies, and we are we've 0:11:43.640 --> 0:11:47.840 lost some of that market share and positioning. Yet we 0:11:47.920 --> 0:11:51.760 have some phenomenal academic institutions and platforms and hubs in 0:11:51.800 --> 0:11:55.520 the across the UK that have some very great specialisms 0:11:55.559 --> 0:12:00.000 and we really should be you know, catalyzing and supporting them. 0:11:59.120 --> 0:12:02.240 M okay, tell me about the types of companies that 0:12:03.320 --> 0:12:06.440 are in these said, the Moobius VCT had done very 0:12:06.440 --> 0:12:07.000 well recently. 0:12:07.120 --> 0:12:08.120 What kind of companies are in. 0:12:08.080 --> 0:12:11.480 That fundamentally early stage companies, but they're things that like 0:12:12.720 --> 0:12:15.679 so it is what I'm thinking of. An API platform 0:12:16.120 --> 0:12:18.559 developed by a team that design called Ozone API is 0:12:19.040 --> 0:12:21.400 developed by a team that designs open banking in the UK. 0:12:21.800 --> 0:12:24.560 It's a global platform, so it's selling to global customers. 0:12:25.600 --> 0:12:28.160 And these are for banking users. You know, when you 0:12:28.160 --> 0:12:30.760 look at your using your app in order for security 0:12:30.760 --> 0:12:32.320 of app and then to access your accounts and the 0:12:32.360 --> 0:12:35.040 various different services you want from your own bank. This 0:12:35.200 --> 0:12:37.520 is these are the types of things that are developed 0:12:37.559 --> 0:12:41.920 within within that product of that company. There's another one 0:12:41.960 --> 0:12:46.120 which is an Irish and UK based company called city Swift, 0:12:46.160 --> 0:12:48.960 which is a data platform that increases the performance of 0:12:48.960 --> 0:12:54.720 public transport networks, uses AI analytics and simulates and optimizes. 0:12:54.960 --> 0:12:58.120 So again, lots of these are technology related. They're at 0:12:58.120 --> 0:13:01.400 cutting edge of innovation, and they are you know, the 0:13:01.440 --> 0:13:04.719 future of how the world is evolving, rather than historically, 0:13:04.840 --> 0:13:08.280 you know, VCTs. Previously you could invest in a much 0:13:08.320 --> 0:13:11.439 more traditional old style businesses and you might be able 0:13:11.480 --> 0:13:14.000 to invest in asset backed business that have property like pubs. 0:13:14.280 --> 0:13:17.480 Those things are no longer able to be invested in 0:13:17.520 --> 0:13:18.600 within VCTs. 0:13:19.000 --> 0:13:25.360 Okay, So let's talk about most investors and their rappers 0:13:25.360 --> 0:13:28.360 in their journeys. So I think a lot of listeners 0:13:28.400 --> 0:13:30.960 to this podcast, they will have a pension, so they'll 0:13:30.960 --> 0:13:34.240 have things inside their pension rapper, they'll have things inside 0:13:34.240 --> 0:13:35.280 their ISA wrapper. 0:13:35.960 --> 0:13:37.320 Is this the next stage? 0:13:37.559 --> 0:13:39.839 So once you've pretty much maxed out your pension, it 0:13:39.920 --> 0:13:41.360 was a lot easier to do than it used to 0:13:41.400 --> 0:13:42.880 be maxed out your isold. 0:13:42.960 --> 0:13:44.319 Of course we're talking we had quite a lot of 0:13:44.320 --> 0:13:44.679 money there. 0:13:44.679 --> 0:13:46.480 That's up to sixty grand a year put ahead, right 0:13:46.520 --> 0:13:49.520 if you're using your maximum pension maximum iSER is a 0:13:49.600 --> 0:13:52.079 VCT The thing that you would come to next when 0:13:52.080 --> 0:13:56.000 you're looking for tax efficiency and you've filled your other rappers, it's. 0:13:55.800 --> 0:13:59.440 Definitely one that you would consider immediately. I mean, of course, 0:13:59.480 --> 0:14:02.400 there are other private vehicles where you can get LHT 0:14:02.640 --> 0:14:10.480 or a capital allowance, capital gains allowances, benefits, so there 0:14:10.520 --> 0:14:14.439 are other things where they are they're for more sophisticating investors, 0:14:14.520 --> 0:14:18.240 let's say, probably not the retail investor who's got who's 0:14:18.320 --> 0:14:21.280 just just about maxed out on their ices and their pensions. 0:14:21.800 --> 0:14:24.360 So I would definitely put them there as that next choice. 0:14:25.200 --> 0:14:27.800 But if you are further up the quantum scale or 0:14:27.800 --> 0:14:30.760 the sophistication or risk return scale, you can go into 0:14:31.040 --> 0:14:33.120 some direct private deals. 0:14:33.600 --> 0:14:36.360 Direct private deals. How would an ordinary investor do that? 0:14:37.200 --> 0:14:40.080 Well, there's ei s's that's one way of doing it. 0:14:40.440 --> 0:14:42.600 You can get similar type of tax rates on a 0:14:42.680 --> 0:14:45.520 director single deal, single projects. 0:14:45.200 --> 0:14:47.440 Yeah, Enterprise investment scheme. 0:14:48.040 --> 0:14:51.200 Correct, yes, And that's another way of you know, identifying 0:14:51.560 --> 0:14:53.960 a company that you have you think is good for 0:14:54.000 --> 0:14:58.680 whatever reason for both management, valuation, sector, and you can 0:14:58.720 --> 0:15:01.720 put money directly into that single company. Of course it 0:15:01.800 --> 0:15:05.040 is much more high risk return, but that is another 0:15:05.080 --> 0:15:05.800 option as well. 0:15:05.920 --> 0:15:08.160 And what are the tax benefits there? How does that work. 0:15:09.200 --> 0:15:13.880 So it's very similar. You get thirty percent back from 0:15:14.440 --> 0:15:16.960 investing and you have a capital gains benefits, you have 0:15:17.000 --> 0:15:18.920 to hold it for a certain period of time. There 0:15:18.960 --> 0:15:21.280 is also something called SCIS where you can get up 0:15:21.320 --> 0:15:23.520 to fifty percent back. I think that's the number fifty 0:15:23.520 --> 0:15:27.800 percent now still, and so that's for a smaller company 0:15:28.040 --> 0:15:31.000 at an earlier stage. So there are these other much 0:15:31.120 --> 0:15:34.200 higher risk opportunities where you can go as well to 0:15:34.200 --> 0:15:35.280 put into your portfolio. 0:15:36.560 --> 0:15:37.880 But by the time you get to that, you are 0:15:37.920 --> 0:15:40.080 really into the world of very high risks, aren't you 0:15:40.120 --> 0:15:42.640 with one individual small company? 0:15:42.800 --> 0:15:45.200 Yeah, I mean when you look at portfolio construction, a 0:15:45.240 --> 0:15:47.880 single company does have a specific risk. However, if you 0:15:47.960 --> 0:15:50.240 are you have an edge then you believe you're getting 0:15:50.240 --> 0:15:52.280 a good valuation, you believe in something that can be 0:15:52.320 --> 0:15:54.800 executed on, then you might have an edge that says 0:15:54.920 --> 0:15:56.600 it's not as higher risk as some people perceive. 0:15:57.680 --> 0:16:00.640 We tooked briefly Tony back of the beginning of this 0:16:00.840 --> 0:16:02.800 about the funding gap in the UK. 0:16:03.640 --> 0:16:05.680 Are we really behind the curve technologically? 0:16:05.680 --> 0:16:08.040 Did you think when you look at kirs Darma, was 0:16:08.040 --> 0:16:10.680 it yesterday the day before talking about I'm going to 0:16:10.680 --> 0:16:12.440 go change back. This last week's is going to be 0:16:12.520 --> 0:16:14.480 When you look at Kirs Darma last week talking about 0:16:14.520 --> 0:16:16.440 AI as the driver of growth in the UK, etc. 0:16:16.760 --> 0:16:17.320 Is this possible? 0:16:17.440 --> 0:16:19.520 Are we genuinely too far behind the curve on some 0:16:19.560 --> 0:16:20.080 of these things. 0:16:20.840 --> 0:16:24.640 This country has a culture historically of being innovative and 0:16:24.800 --> 0:16:30.280 entrepreneurial and if you put an ecosystem around that, then 0:16:30.440 --> 0:16:33.800 you will get good results. Therefore, people should be commended 0:16:33.840 --> 0:16:35.880 to make money and be a success, and they should 0:16:35.880 --> 0:16:38.600 be commended also if they take risk and they fail 0:16:38.640 --> 0:16:40.200 and they get back up on their feet and go again. 0:16:40.520 --> 0:16:44.000 And this is what entrepreneurism and startstup and growth companies 0:16:44.000 --> 0:16:45.760 are all about. We are behind the curve when it 0:16:45.760 --> 0:16:47.440 comes to some of that now. We used to be 0:16:47.480 --> 0:16:49.480 at the forefront, but now we are behind. If you 0:16:49.480 --> 0:16:52.600 look at the US, the money, the capital gravitates to 0:16:52.680 --> 0:16:55.560 the US. When people think about listing, they think about 0:16:55.600 --> 0:16:58.720 the US primarily and the London Stock Exchanges is in 0:16:58.760 --> 0:17:01.600 the secondary field. That is not a good place to be. 0:17:01.720 --> 0:17:03.680 Is not where we were when I started in the 0:17:03.760 --> 0:17:07.440 nineties in investing. So how do we change? That? Is 0:17:07.480 --> 0:17:10.159 a cultural change. VCTs are part of that, but venture 0:17:10.160 --> 0:17:12.920 capital and is part of that. But in general, investing 0:17:13.160 --> 0:17:16.399 and commending good managements to take risks and then to 0:17:16.440 --> 0:17:20.760 be rewarded financially and otherwise should be commended and applauded, 0:17:20.840 --> 0:17:24.000 not taxed. And that is an important point. The aim 0:17:24.040 --> 0:17:27.160 market I've mentioned earlier, the growth market has gone from 0:17:27.200 --> 0:17:30.280 about eighteen hundred companies fifteen years ago to about seven 0:17:30.359 --> 0:17:33.239 hundred to day. And people talk about that, but they 0:17:33.280 --> 0:17:36.520 don't then start addressing how do we solve that? And 0:17:36.600 --> 0:17:39.199 there's many components that solution, and one of them is 0:17:39.240 --> 0:17:44.080 the fact that it's the regulatory burdens, the transparency, the 0:17:44.160 --> 0:17:47.440 constraints on making money and being successful. All of those 0:17:47.480 --> 0:17:49.919 go to the best management team saying why do I 0:17:49.960 --> 0:17:51.680 need to be listed? If I have an option, I'll 0:17:51.720 --> 0:17:52.440 do the option. 0:17:52.680 --> 0:17:55.480 I'm going to put you in charge, Tony, completely in charge. 0:17:55.560 --> 0:17:56.560 You can do whatever you like. 0:17:57.000 --> 0:18:01.400 It's the one policy change focus on to try and fix. 0:18:01.440 --> 0:18:01.800 Part of that. 0:18:02.440 --> 0:18:08.960 It would be the regulatory burden around transparency on being 0:18:09.000 --> 0:18:13.720 listed and therefore capital access, getting the best management teams 0:18:13.760 --> 0:18:18.080 to run quoted and unquoted companies. Those things are if 0:18:18.080 --> 0:18:20.960 you've got the best management teams, the rest will. 0:18:20.840 --> 0:18:24.080 Flow is there anything we could do with the tax 0:18:24.119 --> 0:18:27.080 system to encourage companies to list or encourage companies to 0:18:27.080 --> 0:18:28.919 be more innovative. I mean, I always think it might 0:18:28.960 --> 0:18:32.800 be useful if say, when a company a company listed, 0:18:32.840 --> 0:18:35.560 it had a lower rate of corporation tax for five 0:18:35.640 --> 0:18:36.639 years or something like that. 0:18:37.119 --> 0:18:39.520 Well you can see the benefits of having from a 0:18:39.560 --> 0:18:43.200 societal point of view, in the Ireland lower corporation tax 0:18:43.200 --> 0:18:45.960 twelve percent or recently. And look what's happened to Ireland 0:18:45.960 --> 0:18:49.440 in the last ten years. It's phenomenal the amount of 0:18:50.080 --> 0:18:55.080 the money that's gravitated there, but importantly the skills the companies, 0:18:55.160 --> 0:18:58.360 the global companies that are now based there, They are 0:18:58.359 --> 0:19:01.000 sitting pretty now thinking about what to do with the 0:19:01.040 --> 0:19:03.760 surplus for society and island as a result. So you 0:19:03.760 --> 0:19:07.240 can see that trickle down effect. Is it works? 0:19:08.640 --> 0:19:12.359 Yeah, Let's say Rachel Reaves is listening. Eh, now you've 0:19:12.400 --> 0:19:14.560 got a new launch. I know you've got a new 0:19:14.600 --> 0:19:16.840 launch coming out with Baron's Mead. Right, You've got a 0:19:16.880 --> 0:19:17.480 share offer. 0:19:18.359 --> 0:19:21.440 Yes, so one of our brands, Baron's Meat, is coming 0:19:21.440 --> 0:19:24.520 out on new VCT offering in the next week or so. 0:19:25.600 --> 0:19:28.040 And you know they cap the amount that they raised 0:19:28.040 --> 0:19:32.280 typically between up to fifty million, So hopefully, like last time, 0:19:32.320 --> 0:19:35.600 we hit the cap. But we've you know, Gresham houses 0:19:35.720 --> 0:19:38.640 many of these offerings for people, and we've always got 0:19:38.640 --> 0:19:39.159 something on the go. 0:19:39.280 --> 0:19:40.679 Merry, I know you have. 0:19:40.920 --> 0:19:43.080 I know you have, and that's somewhere listeners for you 0:19:43.160 --> 0:19:45.160 to go and look if you have filled up every 0:19:45.200 --> 0:19:47.600 single other rapper and you're looking for something with some 0:19:47.640 --> 0:19:51.400 tax benefits and possibly rather more risk. Tony, is there 0:19:51.440 --> 0:19:53.160 anything that we haven't covered that we should cover? 0:19:54.280 --> 0:19:58.359 No? I think you know. Investing is a fundamental part 0:19:58.359 --> 0:20:02.600 of economic growth. Taking risk, making returns and applauding people 0:20:02.640 --> 0:20:05.600 for taking that risk is something which this country has 0:20:05.600 --> 0:20:08.280 been good in history, and we really need to continue 0:20:08.320 --> 0:20:08.639 to do that. 0:20:09.200 --> 0:20:09.440 Well. 0:20:09.480 --> 0:20:11.600 Well, hopefully we will get better at that over the 0:20:11.640 --> 0:20:13.720 next decade or so, possibly than not the next couple 0:20:13.760 --> 0:20:14.120