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Despite involving a degree of risk, they have provided consistent tax-free capital growth and dividends for investors, making them a natural adjunct to ISA and pension portfolios.
he growth of responsible and sustainable investing is changing the shape of the investment industry and could prove critical in
supporting the transition to a lower carbon and more socially just world.
T
venture capital trusts
For Professional Clients only
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Why venture capital trusts are a growing opportunity for tax-efficient investors
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he amount invested in venture capital trusts (VCTs) has risen 2.5x over the past decade. This is not just due to the myriad of tax advantages, but also because they have
proved their worth as an investment.
Today, more and more people are moving into the higher-rate tax net, and at the same time greater restrictions are placed on pension investment. This is likely to support continued demand for VCTs.
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For Professional Clients only, not for Retail Clients
However, as the economic recovery slows, it will be more important than ever to be with a VCT provider that has experience and skill in selecting and nurturing opportunities.
In this guide, Puma Investments discusses its approach to building carefully curated portfolios of scale-up companies, and how advisers can engage with VCT investment.
Case studies: Four successful VCT investments
What makes an attractive venture capital investment?
Profiles of typical VCT investors
WHY INVEST IN A VCT?
Why invest in a VCT?
(1) https://www.theaic.co.uk/aic/news/commentary/industry-trends
Source.
(1) SFDR Article 8 and Article 9 Funds: Q3 2021 in Review, from Morningstar.
Sources.
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SPOTLIGHT
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VCTs have seen their popularity soar in recent years. So what’s the appeal and why should VCTs be on investors’ radar?
(1) United Nations, Report of the World Commission on Environment and Development, Our Common Future, 1987
My starting point is that not everything that matters can be measured
who has lived with a teenager knows that fast maturation comes with challenges and a few wrong turns.
he world needs responsible and sustainable investing to mature and grow so that it can drive beneficial change more quickly. But anyone
According to Fox, who runs RLAM’s sustainable fund range, “the corporate world now understands the potential financial benefits as well as the social benefits of responsible and sustainable investing – a big shift because if a company believes it might get higher valued equity and cheaper debt from improved sustainability practices then its philosophy is going to move pretty rapidly.”
Ashley Hamilton Claxton, Head of Responsible Investment, has recently been attending broker-arranged conference calls for issuers and says many firms are asking themselves how they can attract the new Environmental, Social and Governance (ESG) oriented investors. “Even the ‘dirty’ companies are realising that this is now affecting capital flows and are reaching out,” she says, though her advice to them is straightforward (see box).
Researching reality
Hamilton Claxton says that a parallel trend is also now clear. “The conversation is moving on from ‘what is the financial ESG risk of my companies or my funds’ to ‘what is their direct impact on sustainability’, in addition to any financial risk implications,” she says. This shift is changing the approach of the Responsible Investment team – who work not just with Fox’s sustainable funds but across RLAM’s investment universe.
Fox thinks there is a danger that numbers will take priority over more subtle word-based judgements. “Words are inconvenient because they're unstructured – you can't spreadsheet them and they can mean different things,” he says. “If you're trying to come up with a low-cost, scalable solution, words are a nightmare – you just want a set of data to crunch and create a sustainable portfolio around.”
“But we're buying companies that exist in the real world,” he says, “and to think that you can entirely numericise those companies during the sustainability analysis and attribute no value to the words that provide context to the sustainability numbers is, I think, profoundly wrong.”
“In our own portfolio of companies, we’ve seen average headcount growth of 60% after receiving VCT investment”
Up to 30% income tax relief* on investments of up to £200,000, provided the investor’s tax bill is no greater than the amount of relief they are eligible to reclaim.
Dividends from VCT shares are free from income tax.
Investors do not have to pay capital gains tax when they sell VCT shares.
for five years. This applies for up to £200,000 per year, unlike pensions or ISAs, which have less generous annual allowances (currently usually £40,000 and £20,000 respectively).
big reason is that the government provides powerful incentives to invest in VCTs. Investors should receive up to 30% income tax relief* on new investments into VCTs, plus tax-free dividends and capital growth, providing the shares are held
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And that’s not all. Nadia Halila, senior business development manager at Puma Investments, says recent tax decisions have also increased the relative appeal of VCTs. “The income tax thresholds have been frozen until 2026, which means there will be another million people paying higher rate tax.”
Recent restrictions on the tax breaks available from pensions have also increased the appeal of VCTs. In particular, the reduced tax relief on pension contributions for those earning over £200,000 (previously £150,000) has led investors to look elsewhere for savings options. There is also the problem of the lifetime allowances, which restrict the amount people can save into a pension to £1.07m before tax penalties apply.
While the tax incentives are undoubtedly part of the appeal of VCTs, there are other reasons to introduce them into a portfolio. In particular, many investors like the idea of investing in small businesses and helping them grow. By doing so, they are providing an important boost to the UK economy.
“VCTs help job creation, which in turn helps local communities,” says Halila. “Ultimately, more tax is being paid by these growing businesses. In putting powerful incentives around VCTs, the government hopes to create the next billion-pound company.
“This is a really important stage of the funding cycle. In our own portfolio of companies, we’ve seen average headcount growth of 60% after receiving VCT investment."
“Imagine that multiplied across the VCT universe, across hundreds of VCTs each year."
Halila emphasises that last year’s Budget continued to offer implicit support for VCTs. “The government’s dialogue was very encouraging. They didn’t directly mention VCTs, but they did talk a lot about levelling up, and 56% of VCT investments are made outside London.”
VCTs also act as a strong diversifier to conventional equity and bond portfolios, because the investee companies have different dynamics from large FTSE companies.
Supporting economic growth
Advisers have a vital role not just in helping their clients to navigate the often complex and jargon-heavy world of responsible investment, but also in helping shape their preferences. It may not be that clients aren’t interested, but that they haven’t been asked the right questions.
Given how differently clients feel about responsible investing once they understand what it involves, it is up to financial services providers, including advisers, to bring the concept to life, providing examples and showing where responsible investing has made a difference, including where engagement has prompted companies to change their practices.
The relationship advantage
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At a glance: the tax benefits of investing in a VCT
The types of client interested in VCTs are typically maxing out their ISA allowances, she explains. “The pension allowance and the ISA allowance don’t allow them to invest as much as they want to, particularly where it is tapered, and for pensions they are also restricted in their lifetime contributions. Lots of investors are looking for an additional way to invest that is tax-efficient.”
Income tax relief
Tax-free dividends
No capital gains tax
The average headcount growth across the Puma VCT portfolio is 60% from date of investment
In Puma’s own Portfolio, portfolio companies that have taken VCT money have seen an average revenue growth of 78%
The investment case
Different VCT providers can also target different sectors and different risk profiles. Some will aim to provide high-capital growth but with more risk, while others will target a steady tax-free dividend stream. They will also hold companies at different stages of development.
Halila says, “Like most VCT providers, we’re used alongside other VCTs. Advisers don’t usually pick one fund for an investor.
“There are very clearly diversified VCTs in different sectors, different stages and how many holdings they’ve got. If an investor is spread across two, three, four VCTs, that will help to mitigate risk.”
However, Halila says that many of these investments are less volatile than people believe. She points out that the Puma-backed portfolio companies have generally done well during the pandemic, in contrast to listed markets, which have been volatile.
While VCTs may invest in smaller companies, the VCT manager will be providing help and guidance on growing the business, which can help it avoid many of the pitfalls that might derail it. Puma invests in scale-up businesses rather than start-ups, because that is where its managers believe they can add the most value, and also help minimise risk for investors.
Eligibility requirements for a VCT investment
Companies must:
Carry out a “qualifying trade” Receive their first risk-finance investment no later than seven years after their first commercial sale Have fewer than 250 full-time employees Have gross assets less than £15m
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CLICK CIRCLES FOR DETAILS
(1) https://www.independent.co.uk/news/uk/rishi-sunak-jacob-reesmogg-house-of-commons-library-liberal-democrats-christine-jardine-b1988412.html
(4) https://www.gov.uk/hmrc-internal-manuals/venture-capital-schemes-manual/vcm50000
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*Tax reliefs are not guaranteed, depend on individuals’ personal circumstances and a five-year minimum holding period, and may be subject to change.
And that’s not all. Nadia Halila, senior business development manager at Puma Investments, says recent tax rises have also increased the relative appeal of VCTs. “The income tax thresholds have been frozen until 2026, which means there will be another million people paying higher rate tax. (1) There is also the new social care levy, meaning there are more conversations about paying tax.”
Carry out a “qualifying trade” Receive their first risk-finance investment no later than seven years after their first commercial sale (10 years for knowledge-intensive companies) Have fewer than 250 full-time employees Have gross assets less than £15m
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2
(2) Puma Private Equity. Figures taken 24/08/2022.
3
(3) https://www.theaic.co.uk/aic/news/press-releases/vcts-vital-role-supporting-small-businesses-through-the-pandemic. The survey period covered investments made after 4 December 2017 up to June 2020.
With the exception of knowledge-intensive companies, which must:
Be developing intellectual property that they expect to be their main source of business within the next 10 years, or have 20%+ of employees carrying out research for at least three years from the date of the investment Receive their first risk-finance investment no later than 10 years after their first commercial sale Have fewer than 500 full-time employees Have gross assets less than £15m
(2) https://www.gov.uk/hmrc-internal-manuals/venture-capital-schemes-manual/vcm50000
(1) RLAM as at June 2021
responsible investment and good governance across all asset classes. Alongside this, we also believe that considering environmental, social and governance (ESG) issues in the investment process can help us deliver better returns for our customers and clients.
The following scenarios are for illustrative purposes. We would always recommend that you speak to a financial adviser before making any decisions.
Risk Factors
Calculator tool: How much could a client save through a VCT?
Mandi owns and operates a successful IT company. She has built up substantial retained profits within her business and now wishes to extract some of it in a tax-efficient way.
Mandi wants to retain some funds within the business for operational purposes and cashflow management. However, due to her business’s success, the amount of surplus cash will allow her to pay a dividend.
Some do, however. Royal London’s Responsible Investment research shows that there are three groups of adviser: a reasonably large segment who expect to see a rise in client demand; a second segment who are hedging their bets; and a third, fairly small segment, who believe demand for responsible investment will be short-lived.
This does mean that a majority are on board with the concept. Yet despite this, only half of advisers reported asking about responsible investment during their client fact-find and only a third raised the subject at client review meetings.
Those advisers that don’t speak to their clients about this topic may be missing a commercial opportunity, says Ryan Medlock, Senior Investment Development Manager at Royal London. “Customers’ attitudes are changing,” he says, highlighting that many would prefer their pension to be invested responsibly, if only they knew about the effect it could have.
Medlock argues that advisers have a role in helping their clients to connect the dots, understanding that their investments have power and can contribute to carbon emissions every bit as much as turning down the heating. While many clients may not ask about responsible investing, it doesn’t mean they aren’t interested.
Mandi currently pays herself a salary from her business, and is a higher-rate taxpayer. She is in the fortunate position of being able to decide how to invest her dividend.
The solution
Mandi’s financial adviser conducts a suitability assessment based on her risk profile, attitude towards investing in smaller companies, and her target investment time horizon. The adviser suggests that she pay herself a £100,000 dividend and invest all of it into a VCT, holding the investment for at least five years.
With a VCT investment, Mandi can claim up to 30% income tax relief on investments of up to £200,000 in each tax year, provided she holds the VCT shares for at least five years. Other tax benefits include tax-free dividends, which could provide an additional source of income, as well as no capital gains tax to pay when she sells the shares.
Mandi can claim the tax refund as soon as she receives her income tax certificate from the VCT’s share registrar.
Mandi
The calculation compares a VCT investment to paying a dividend to yourself without any planning and is for illustration purposes only. These two situations are likely to have different outcomes and risk profiles, and we would always recommend that you speak to a financial adviser before making any decisions.
This calculator does not take into account fees and charges. It’s worth bearing in mind that typical charges for VCT investments include initial fees, annual management charges, performance fees and adviser charges.
Goal: To enhance his retirement fund
Robert
Robert’s financial adviser makes an assessment based on Robert’s risk profile, attitude towards investing in smaller companies and his target investment time horizon. She suggests investing £25,000 of his annual income in a VCT.
With a VCT investment, Robert can claim up to 30% income tax relief on investments of up to £200,000 in each tax year, provided he holds the VCT shares for at least five years. After five years and subject to the liquidity of the VCT shares, Robert could sell his first VCT investment, then reinvest any sales proceeds in another VCT and use the additional income tax relief to reduce his year six income tax bill. Similarly, Robert’s year two VCT investment could be sold and reinvested in another VCT in year seven, giving him additional income tax relief, and so on.
Other tax benefits of investing in a VCT include tax-free dividends, which could provide an additional source of income, as well as no capital gains tax to pay when he sells the shares.
The tax refund can be claimed as soon as he receives his income tax certificate from the VCT’s share registrar.
Goal: To save tax-efficiently, having exceeded her lifetime pension allowance
Amina is a GP and has been paying into her pension for the last 25 years. As she has progressed through the ranks and become practice partner, her earnings have risen, and she is now at risk of exceeding the current £1.07m lifetime allowance (LTA).
Amina is worried about incurring a tax charge of up to 55% on any pension savings above this threshold. She is therefore investigating alternative options to save for her retirement tax-efficiently.
Amina
Based on Amina’s risk profile and tolerance, as well as her target investment horizon, her financial adviser recommends that she invests in a VCT.
A VCT could enable Amina to claim up to 30% income tax relief on investments of up to £200,000 in each tax year. Other tax benefits include tax-free dividends, which could provide an additional source of income to Amina, as well as no capital gains tax to pay when she sells the shares.
Because Amina still has a number of years left before retirement, she has no problem holding her investment in the VCT for the minimum five-year period required to qualify for the available tax benefits.
Amina’s financial adviser does explain that a VCT investment is not without risk. He outlines the key risks, and explains that if Amina decides to proceed on the basis of the recommendation, she would need to read the prospectus in full first.
The table below shows how an investor can take advantage of the tax benefits associated with investing in a VCT. VCTs could be considered as part of a portfolio for some people, alongside their pensions and ISAs.
The scenarios above are for illustrative purposes only and assume no gains or losses on the original investments. In practice, VCT shares, and any income from them, could fall or rise in value more than other shares listed on the main market of the London Stock Exchange. Investors may not get back the full amount they invest, and they may also be harder to sell. VCTs are high risk and should be considered as long-term investments. The adviser will need to consider the eligibility and timings of tax rebates and tax liabilities depicted, and the impact of charges as relevant to the offer represented and/or any specific offer chosen. Tax reliefs depend on the VCT maintaining its qualifying status. Tax relief is available on investments of up to £200,000 per year. Tax reliefs depend on individuals’ personal circumstances, minimum holding periods and may be subject to change.
(1) The government has confirmed plans to increase the minimum pension age from 55 to 57 from 2028. From then on, the minimum pension age will stay ten years below the state pension age, which is due to increase in line with the expected increase in life expectancy.
Meet Mandi, a company owner Mandi wants to pay herself £100,000 in dividends She will have to pay a 32.5% rate of tax since she is a higher rate taxplayer
WITHOUT VCT INVESTMENT
£100,000 paid to Mandi
WITH VCT INVESTMENT
£100,000 paid to Mandi and invested in a VCT
£2,000 annual dividend allowance
£31,850 tax due on dividend
£68,150
£30,000 tax rebate
gross position, excluding fees
£98,150
YEAR 1
£25,000
YEAR 2
YEAR 3
YEAR 4
YEAR 5
YEAR 6
YEAR 7
£7,500
Reinvest sales proceeds from the original £25,000 VCT investment made in Year 1*
Reinvest sales proceeds from the original £25,000 VCT investment made in Year 2*
* The amount will vary depending on how much Robert can sell his shares for
30%
income tax credit
VCT investment
30% income tax credit
• The tax due on dividends is set assuming the business owner is a higher rate taxpayer. Your tax rate may be different.
Notes.
• Tax reliefs depend on individuals’ personal circumstances, a minimum five year holding period, and are not guaranteed.
Enter the amount of dividend you would like to pay yourself from your business
Goal: To extract profits from her company tax-efficiently
(1) The tax due on dividends is set assuming the business owner is a higher rate taxpayer. Your tax rate may be different.
(2) Tax reliefs depend on individuals’ personal circumstances, a minimum five year holding period, and are not guaranteed.
Robert is a high-earning dentist. He has accumulated significant Individual Savings Account (ISA) savings and pays large amounts into his Self-Invested Personal Pension (SIPP) each year. As he is restricted in what he can pay into his pension, he is looking for other tax-efficient options to invest his income.
With a high annual tax bill, a substantial tax-efficient pension and ISA investments already, Robert is interested in other government-backed ways to reduce the amount of income tax he pays. He would consider investing in UK smaller companies with the associated investment risk.
Mandi’s financial adviser conducts a suitability assessment based on her risk profile, attitude towards investing in smaller companies, and her target investment time horizon. He suggests that she pay herself a £100,000 dividend and invest all of it into a VCT, holding the investment for at least five years.
(3) The government has confirmed plans to increase the minimum pension age from 55 to 57 from 2028. From then on, the minimum pension age will stay ten years below the state pension age, which is due to increase in line with the expected increase in life expectancy.
Early-stage companies come with a level of risk. They need to be not only chosen with care, but nurtured through their lifecycle
We've come up with a climate score which I think is innovative. We've decided to split climate out from environment, for two reasons. First, it recognises that climate affects every company; and second, it recognises that in ESG scores, the climate metrics and variables tend to drown out other important environmental issues like water usage and a company’s impact on biodiversity.
‘Hygiene factors’ for a Puma investment
Puma will typically invest for five to seven years. “This gives us time to get in and work closely with the business, and put in place some of the processes that will yield better value or lead to them being more valuable over time,” says West.
It is an intense process. Puma assigns two people from its own team to work closely with the company. “We will be on the board, so we will have a board director and a board observer,” explains West. “We work with the company on the business plan, we sign off the budget each year, and they send us monthly management accounts. We put those into our base monitoring system and that produces lots of analytics.
The relationship between the VCT manager and business owner will be long term, and can be intense. They will need to work together through good and bad moments, and decisions will incorporate qualitative and quantitative considerations. For West, this means that all decision-making needs to be team-based.
“Everyone in our team sees everything and is involved in discussions on the strengths and the weaknesses of that business,” he says. “This will include the sales and marketing structure, information structure and HR structures. We bring together all of the knowledge we’ve built as a business to make our decisions.
Managing through a company lifecycle
“Small companies don’t just bob along – if they don’t succeed, they fail. They run out of money. So we need to be active.”
best opportunities, and this is where the right network and reputation come in. “You get known and build a reputation for having available funds, being good at what you do, and helping management teams to create value in their businesses,” says West. “We see approximately 400 opportunities a year, of which we end up completing investments into four or five.”
hen it comes to selecting the right company, experience and reputation matter, says Rupert West, managing director of the Puma Investments Private Equity division. VCT managers need to be able to access the
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ambition and action to reduce carbon emissions. Yet advisers still report that relatively few clients ask how they can invest more responsibly.
t is clear that people care about climate change. From reducing energy consumption and recycling to protesting outside Parliament, there is no shortage of will,
I
There is also increasing evidence that given clear choices, investors are plumping for the responsible option. Morningstar data for Europe shows that in the third quarter of 2021, ESG and sustainability funds drew in 57% of all fund flows.(1) This is a rise from 44% in the second quarter.
Regulation is only likely to accelerate that growth. Jamie Jenkins, Director of Policy and External Affairs at Royal London, says that while the UK, US and Europe are at different stages, they are moving in the same direction. The priority from here is likely to be to create clear parameters around sustainability, to tackle greenwashing and to ensure proper measurement, so that progress is tangible.
Regulatory pressure
Jenkins points out that responsible investing is intimately connected with retirement outcomes – it seeks to ensure that we improve the environment for everyone, so people don’t live in a house that floods or in a world where their grandchildren’s future is unsustainable. “It is not an act of charity or selflessness. It is fundamentally important to all of us. Increasingly it is also being seen as a critical factor in getting good investment returns over the long term.”
There are other elements that are starting to emerge as the market becomes increasingly sophisticated. The drive to measure impact, for example, is becoming a vital part of asset managers’ offering to investors. It is not enough to want to do good; investors require tangible results. As disclosure improves, this is becoming increasingly possible and desirable.
He also believes that an ‘H’ – health – may be added to ESG analysis by many investment managers. There are increasing targets on healthy life expectancy from policymakers, and employers have a vital role to play in ensuring mental well-being and long-term good health.
“Advisers are in the perfect position to help clients recognise that where they invest today will help shape the world of tomorrow”
“We are minutely focused on the probability of success for the business model of any potential investment.”
Unusually, the team at Puma don’t see themselves as venture capitalists. They want to find businesses with the clear intention of growing, developing high-grade corporate structures and becoming well-run businesses. They back scale-ups rather than start-ups. They consciously avoid aggressively entrepreneurial businesses, as the risks are far greater.
“We will miss out those really superstar opportunities that are all about innovation, new and amazing returns. But equally we will miss out on MySpace, and we will miss out on all the entrepreneurs that go rogue and cannot be controlled, making their businesses unviable.”
A company needs:
A proven product A broad-based need and desire for its product or service Management experience and aptitude A desire to run a professionalised, scaled business A leadership willing to take on board insights and best practice
“On top of that, we will speak to them weekly if not daily, and we will be involved in almost all hiring and strategic decisions. We do lots of coaching and advising.”
This deep involvement is part of the risk management process. In essence, it brings a collective memory into the business. “We’re trying to draw on all of the mistakes that we’ve made in the past and prevent them being made again.”
Puma also strongly protects its rights within the investee company. “We have a very robust set of legal documents, that give us a lot of veto rights around the direction the company can go in,” says West. “While we’re not taking operational control, we are agreeing a business plan with the management team, and if things change, everyone comes back to the table and we agree a new plan.”
However, despite all these protections, West believes that selective risk-taking is desirable. “If you just worry about the downside, you’ve got no upside to cushion it. And if you invest into a loss-making company because they’re in strong growth mode – as we often do – then you can’t just sit still and mitigate risk. Eventually you run out of money.
Puma’s approach to ESG
Puma Investments is committed to a range of environmental, social and governance (ESG) principles to help it operate and invest responsibly. These fall under the headings of governance, environment, marketplace, workplace and community.
Puma has produced bespoke ESG policies for different business areas, which take into account their exposure to different opportunities and risks. The business heads for each area of the business are accountable for implementing these policies, and the relevant decision-makers also incorporate these policies when assessing investments or funding opportunities.
“If you invest into a loss-making company because they’re in strong growth mode, then you can’t just mitigate risk”
• • • • •
“We will miss out on all the entrepreneurs that go rogue and cannot be controlled, making their businesses unviable”
“Guided by Yanto’s performance insight, design expertise and drive for perfection, Le Col is becoming the go-to brand for cyclists looking for the best kit,” says Harriet Rosethorn, investment manager at Puma Private Equity.
Pure Cremation has been the driving force behind the UK-wide adoption of direct cremations, a straightforward and flexible alternative to a traditional funeral. Here, the deceased is taken straight to the crematorium without a funeral ceremony, enabling loved ones to hold a more personal event to commemorate the deceased’s life, away from a crematorium.
Between 2017 and 2018, Puma Investments deployed £7.35m of growth capital into Pure Cremation. An exit was secured for the Puma VCTs in June 2021, with Puma VCT 13 achieving a 4x money multiple on its investment, resulting in an internal rate of return (IRR) of 71%.
Investment: £7.35m Sector: Direct cremations Established: 2015 Expansion plans: Nationwide
What explains this apparent gap? For Sarah Pennells, Consumer Finance Specialist at Royal London, most people do not make the connection between their pension pot and the climate crisis. This matters, because new research from Royal London shows that once people recognise that their long-term savings can make a difference, the proportion of those who say they would prefer their pension to be invested responsibly jumps from 7% to 57%.
(1) Responsible Investment: A passing fad or a permanent future?, from Royal London
Important Information
Pure Cremation’s revenues grew nearly 10x over the holding period, and the company moved into profitability. Puma’s private equity division helped the company explore the abundance of strategic options available to it, including meeting potential acquirers.
Puma’s investment also helped with marketing activity, and ensured the business was able to continue operating safely, despite very high demand during the Covid-19 crisis.
Pure Cremation
The company now delivers its low-cost service across England, Scotland, Wales and Northern Ireland, and has ambitious future plans.
Le Col
In 2018, Puma Funds invested £2.35m to support Le Col’s initial growth plans, and following continued strong performance, a further £6.53m, in total, was invested in 2020 and 2022.
Le Col uses the latest technology to bring high-performance kit to consumers, with a quality formerly reserved for professionals. Le Col’s revenues have, on average, quadrupled year on year since 2017.
Le Col entered the pandemic with a strong platform, having grown well since Puma’s initial investment. The business experienced a boom in sales during lockdown, due to an increased focus on exercise.
Successful marketing initiatives have also driven sales throughout the pandemic. These included multi-sport Strava Challenges, partnerships with Wahoo, Zwift rides and ongoing sponsorship of Team Bahrain McLaren, a leading Grand Tour team.
Investment: £8.88m Sector: Sports apparel Established: 2011 Expansion plans: Continued global growth
“Our investment will support the team to leverage the explosive growth it’s achieved over the last two years, ensuring Le Col continues on its exciting journey.”
Connectr has an award-winning digital delivery platform, enabling it to capitalise on the shift towards digital media, and growing demand for integrated automation in recruitment. It also has an expert management team with an established reputation in the market as thought leaders, as well as significant technical and commercial experience.
The company has robust plans to expand its offering, supported by the scalability of its solutions when addressing a range of retention issues.
Connectr
Puma Funds initially invested £2.7m in August 2019 to support Connectr to develop its core product. Following impressive revenue growth in the following two years, Puma Funds invested a further £6m across two investment rounds (October 2020 and December 2021) to capitalise on the expansion opportunities available to the company. Connectr has an extensive client base, which has been bolstered by the government’s Apprenticeship Levy, which incentivises corporates to invest in their own apprenticeships.
Focusing its recruitment on young people, Connectr aims to help students from a range of backgrounds develop employability skills and succeed in the workplace, while also supporting employers with their recruitment needs – from work experience and apprenticeships through to graduate programmes. Its clients include BT, Deloitte, Cisco and Burberry.
In 2021, Connectr launched a partnership with the Department for Work and Pensions and Jobcentre Plus, to provide digital content, mentoring and training support for unemployed people looking to get back into work or start their own business.
Investment: £8.7m Sector: Emerging talent Established: 2011 Expansion plans: Nationwide
CameraMatics has seen triple-digit growth in recurring revenue in 2020, and has clear expansion plans – its pipeline contains attractive, large-scale opportunities that will further accelerate business growth. This investment will help the business build on its domestic and international presence in key markets.
CameraMatics
In 2021, the Puma funds invested £4.72m into CameraMatics, an international provider of award-winning risk management technology for large fleets of vehicles.
Established in 2016, CameraMatics is a leading Internet of Things (IoT) fleet and vehicle-safety technology specialist, working across Ireland, the UK and US. Its disruptive technology incorporates artificial intelligence, machine learning, camera technology, vision systems and telematics, to help fleet operators reduce risks and drive new safety standards.
Investment: £4.72m Sector: Technology Established: 2016 Expansion plans: US and Europe
Past performance of Puma Investments in relation to its other VCTs is no indication of future results. The payment of dividends is not guaranteed. Investors have no direct right of action against Puma Investments. The Financial Ombudsman Service/the Financial Services Compensation Scheme are not available.
Investment: £6.35m Sector: Sports apparel Established: 2011 Expansion plans: Continued global growth
In 2018, Puma Investments deployed £2.35m of equity into Le Col, a leading British cycling brand founded by ex-professional cyclist, Yanto Barker. Following the company’s continued strong performance, a further £4m was invested in 2020 and February 2022.
Investment: £8.75m Sector: Emerging talent Established: 2011 Expansion plans: Nationwide
