Exclusive: Oberon AIM VCT relaunches in search of small cap rebound
Oberon is relaunching its AIM VCT led by a team of City veterans as the firm prepares for a swell in valuations for small cap stocks.
In a strategic repositioning of the former New Century AIM VCT 2, the venture capital trust will relaunch with an aim to raise £5m, with an over-allotment facility of £3.4m, City PM can reveal.
Led by fund manager Simon Like, who has worked at Oberon since 2018, the firm has also recruited former portfolio manager at Jupiter Asset Management Paul Sheehan and City veteran Richard Penny, who previously worked at CRUX and Legal & General Investment Management.
The fundraise offer will end by 1 December, subject to early closure upon full subscription or director discretion.
After a prolonged stretch of underperformance, AIM valuations have fallen by a further 45 per cent since September 2021, leaving the managers eager for the market to bounce back.
“Seldom has the AIM market been this oversold and it isn’t because the quality of the companies has changed, but because sentiment has,” Penny told City PM.
“However, markets have always corrected, and today we are also seeing additional tailwinds, including a shift away from US stocks, an increasing number of larger funds being unable to invest in AIM, and a rise in M&A activity.”
Despite the troubles on AIM, VCTs focusing on the junior market continue to be a popular investment option, due to the tax relief they provide.
There are currently seven VCT focusing on AIM, which sit on an average eight per cent discount to underlying assets, compared to 14.6 per cent for the wider investment trust sector.
VCT investors receive 30 per cent upfront income tax relief of up to £200,000 per year, along with tax-free dividends and capital gains on the sale of shares.
The news comes following the launch of the first AIM-focused VCT on the London Stock Exchange for 18 years last week, with Puma floating the vehicle.