Our Investment Strategy
"They are, to date, the only limited life VCTs to have reached the benchmark of returning 100p per share to investors"
Martin Churchill, Tax Efficient Review
With all of the investments and funds that Shore Capital manages, our primary focus is to preserve capital. We exhaustively scrutinise the potential downside of a transaction, seeking to understand all associated risks.
Our approach to managing the Puma VCTs is no different, and since the launch of our first fund in 2005, we have concentrated on protecting our clients from loss, whilst making a good risk-adjusted return, and letting the associated tax benefits do the lion's share of the work.
The notion of risk-adjusted return in critical here. The tax benefits of the Puma VCTs are such that a relatively low rate of return on invested capital can yield a very positive result for our investors on a tax adjusted basis. As such our aim for these funds is not to “shoot the lights out”, but to make lower return and accordingly low risk investments during the defined life of the trust.
Whilst many VCT managers concentrate on taking equity stakes in small – and therefore naturally high risk – companies, we concentrate on advancing loans to mature businesses that own substantial assets (over which the Puma VCTs take a charge in order to reduce the risk on the investment) or have predictable revenue streams. So, the loans that the Puma VCTs make function in a similar way to a mortgage: our clients’ money is secured against a physical asset that could be sold to recover funds in the worst case scenario of a counterparty being unable to repay.
Making investments primarily by advancing loans rather than equity facilitates the 5 year defined life of the Puma VCTs, eliminating the perennial problem of illiquidity applying to investors in my other VCTs.
Continuing our role as a pioneer in the VCT market, for the 2010 / 2011 tax year we incorporated a tax free dividend stream (see How VCTs Work) into our product with the launch of Puma High Income VCT. This strategy is repeated in the newly launched Puma VCT 8.
This approach has made us a leader in the field, with a track record that speaks for itself (see Our Track Record).
Shore Capital Stockbrokers Limited is a member of the London Stock Exchange and is authorised and regulated by the Financial Services Authority.
Shore Capital Limited and Shore Capital and Corporate Limited are authorised and regulated by the Financial Services Authority.
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