Annual Financial Report

RNS Number : 1006A

Maven Income and Growth VCT 5 PLC

26 March 2012

 



Maven Income and Growth VCT 5 PLC

 

Final results for the year ended 30 November 2011 and issue of Circular to Shareholders

The Directors report the Company's financial results for the year ended 30 November 2011.

Market background and portfolio overview

Global quoted markets remain challenging and unpredictable, with investors and companies nervous about the prospects for recovery within the UK economy. Smaller quoted companies are particularly vulnerable to market sentiment and as a consequence, AIM, where your Company's portfolio has historically been concentrated, has endured another difficult year.

In light of these market conditions and the potential for further adverse movements on AIM, it has been a priority for the new Manager to mitigate the impact of further market declines by identifying opportunities to realise quoted holdings where possible. Although the value of the legacy portfolio has reduced over the reporting period, the commencement of a structured realisation of specific stocks has allowed the Manager to begin the process of rebalancing the portfolio by deploying capital released from these sales into a wide range of established later-stage private UK companies that have a combination of predictable revenues and low gearing, where each investment is structured to provide a premium yield to your Company. Your Board is optimistic that the change of investment policy will deliver improved portfolio performance and increased revenues, creating the prospect for higher levels of dividend payments to Shareholders, although this will inevitably take some time.

Net asset value and share price performance

The NAV reduced by 16% (to 30.24p per share) during the year, marginally less than the 18.26% fall in the FTSE AIM All-share index for the same period, and there was a corresponding fall in NAV total return (to 52.24p per share). However, since the year end, there has been some improvement with the unaudited daily NAV per share having increased by 10.1% to 33.3p at 19 March 2012.The most important measure of performance for a VCT is the NAV total return, being the long term record of dividend payments out of income and capital gains combined with the current NAV. The NAV in isolation is a less important measure of performance as the underlying investments are long-term in nature and often not readily realisable.

The primary reason for the Company's poor performance has been the continuing impact of the legacy portfolio and systemic issues affecting AIM, particularly the lack of new IPOs and the limited demand in the secondary market for existing stocks. At the time of the change of Manager, your Board took the view that an AIM concentrated portfolio could have been rendered largely moribund by these market conditions, leaving your Company exposed to low yielding illiquid stocks and unable to generate sufficient revenues to support a sustainable tax-free dividend programme.

It is also worth highlighting that the realisation of selected legacy quoted assets during the year prevented a more pronounced reduction in NAV. Had these holdings been retained the NAV would have fallen further in value by up to £665,000 (3.7%) based on the valuations as at 30 November 2011.

Whilst early progress to reposition the portfolio is in evidence, the Directors nevertheless recognise that the discount to NAV at which the Company's shares continue to trade remains a significant issue for Shareholders. The deterioration of the share price is partly a function of supply and demand for the stock, but is also influenced heavily by market perception of the AIM portfolio held by your Company, and indeed sentiment towards AIM as a whole, which lost further ground during 2011. While there has been some recovery in the value of the legacy portfolio in the early part of 2012, this is yet to be reflected in the share price because, as is often the case in the VCT sector, stock is traded in modest volumes.

Enhanced share buy-back scheme

The Board regularly considers its options to improve the share price discount referred to above, the most obvious of which is the buying back of shares. Whilst this can be a useful short-term strategy, in the view of the Directors, it is better for the Company to maintain its asset base, hence controlling the expense ratio, and make new private company investments that will benefit all continuing investors over the medium to long term.

However, in recognition of a perceived demand from Shareholders and to enable the Company to preserve capital, the Directors propose the implementation of an enhanced share buy-back scheme. Such schemes are arrangements by which shareholders in a VCT can sell their existing shares at a preferential discount to the prevailing net asset value and use the proceeds to invest in new shares in the same VCT. Enhanced share buy-back schemes, therefore, reward shareholder loyalty with further upfront VCT tax relief (depending on the qualifying status of a shareholder) for reinvesting in the same VCT and not another VCT.

Full details of an enhanced share buy-back scheme to be implemented by the Company will be included in a Circular to be sent to Shareholders as soon as practicable.

Change of Manager and investment policy

In February 2011, and after careful consideration of a number of potential candidates, the Board took the decision to appoint Maven Capital Partners UK LLP (Maven) as the new investment manager in pursuance of a change in investment policy which the Directors concluded was vital both for the future development of the portfolio and to protect the long term interests of all Shareholders.

Going forward, the investment policy will be to reduce the exposure to AIM and materially increase the level of investment in established private companies capable of generating significant revenues, using traditional private equity structures. This strategy has proved successful for other Maven managed VCTs and allowed them to achieve meaningful improvements in NAV total return over recent years. Whilst it is recognised that the process of changing the balance of the portfolio will take time, Maven has already realised substantial proceeds from the disposal of selected quoted holdings in order to release funds for five new income producing private company investments. These new assets have already more than doubled the annualised revenues generated across the private equity portfolio.

Following the change of Manager the Board provided that appropriate steps were put in place to ensure a smooth handover of fund management and administrative responsibilities to Maven, which was also appointed as Company Secretary with effect from the close of the Annual General Meeting held on 30 March 2011.

The new Manager

Maven is one of the most active and best resourced VCT managers in the UK, with a team of more than 30 experienced professionals providing investment management and administrative support to seven generalist VCTs from a network of six regional offices.

Maven focuses on investing in later-stage private companies, and aims to structure each transaction with a significant loan stock component which is forecast to generate attractive levels of revenue from the outset. A notable advantage for your Company is the opportunity to co-invest in transactions alongside the other Maven managed VCTs, which enables each of them to invest in more substantial private companies than would be the case if the Manager was investing on behalf of a single VCT.

A number of the other Maven managed VCTs have achieved significant uplifts in NAV total return over recent years, with four featured in the top 20 generalist VCT performers on the basis of three-year NAV total return as at 29 February 2012 (source: Trustnet). The four other Maven branded VCTs have some of the lowest discounts in their sector, ranging from a discount of 18% to a premium of 4.4% at 29 February 2012 (source: Trustnet), and your Board is confident that, as the Company's portfolio becomes more closely aligned with those of the other Maven VCTs, this will be reflected in improved performance and lead to greater demand from secondary buyers, an improvement in the share price and, over time, a narrower discount.

Investment activity

Your Board is pleased to report on a period of encouraging investment activity since the appointment of the new Manager as your Company aims to gradually refocus the portfolio towards mature and income producing private companies, across a range of UK industry sectors. Maven is introduced to around 400 companies each year, typically expecting to complete between five and eight transactions, and all of its VCTs, including your Company, will participate equitably in each investment, subject to available liquidity.

The change in investment policy has resulted in a number of early actions:

·      a detailed review and categorisation of the legacy portfolio has been completed, establishing a defined sale or retention strategy for each holding;

·      £3.7 million of cash proceeds have been realised from the disposals of AIM assets, creating sufficient liquidity to allow the new investment strategy to develop;

·      the Company has participated in all Maven led transactions since its appointment as Manager, resulting in four new substantial yielding private company assets being added to the portfolio during the year under review, through transactions structured to provide a yield of up to 15% on the loan stock element of the investment; and

·      subsequent to the year end, the Manager has added one further new private company investment.

Borrowing powers

It was stated in the Circular to Shareholders, dated 7 March 2011 in respect of the proposed change of investment policy, that the Manager would have the authority to borrow up to 15% of net asset value, on a selective basis, in pursuit of its investment strategy.

This authority remains in place as an available option, but neither the Board nor the Manager anticipate that the Company will require to make use of it in the foreseeable future and no borrowing will be undertaken without Board approval.

Valuation process

Investments held by Maven Income and Growth VCT 5 PLC in unquoted companies are valued in accordance with the International Private Equity and Venture Capital Valuation Guidelines. Investments quoted or traded on a recognised stock exchange, including AIM, are valued at their bid prices.

Proposed incentive fee

The Board recognises that Maven has demonstrated significant commitment towards achieving future success for your Company by agreeing to waive all management fees for a two year period from the date of appointment. This reduction in costs, taken in tandem with revenues receivable from new private company assets, should provide the platform to help to improve total Shareholder value over the medium term. It has already allowed your Company to benefit from the Manager's significant experience and resource at nil cost over the first 12 months since Maven's appointment, during a period which required intensive portfolio assessment and analysis, with a combination of realisations and a focus on building a new income producing private company portfolio. Maven has also agreed that beyond the two year nil-fee period it will manage the Company for a base annual management fee of 1.5% of NAV, which is less than the fee previously paid.

In recognition of this commitment to the success of your Company, the Board recommends that a suitable performance incentive arrangement should be introduced, which rewards Maven for achieving positive returns on the legacy portfolio and generating realised capital gains on new investments. A Resolution to this effect will be proposed at the Annual General Meeting, and further details are available in the Circular and Notice of Annual General Meeting to be sent to Shareholders with the Annual Report as well as set out below.

In the view of the Board, this would represent an excellent outcome for your Company, by reducing the base management fee from historical levels and introducing a composite fee structure which more appropriately aligns the interests of Shareholders and the Manager when positive returns are achieved.

Board of Directors

Three of the four members of the Board, including myself as Chairman, have held office since the Company's launch. The Directors are keen to ensure that the changes made last year have been given the opportunity to show improved results. However, the Board would then intend to implement a process of renewal with one or more Directors stepping down in each of the next three years and allowing new Board members to be appointed.

Principal risks and uncertainties

The Board has reviewed the principal risks and uncertainties facing the Company, which are set out in the Directors' Report. In order to limit the investment risk, the Company has a broadly-based portfolio of holdings in unlisted and quoted companies in the UK. Currently the Company remains over-exposed to AIM and the Manager is pursuing a policy of steadily reducing that concentration and rebalancing the portfolio to increase the exposure to established private company assets.

The VCT qualifying status of the Company is reviewed regularly by your Board and monitored on a continuous basis by the Manager in order to ensure that all of the criteria for VCT qualifying status are satisfied. The Board can confirm that all tests continue to be met.

Dividend

The Board proposes a final capital dividend of 1.0p per share in respect of the year ended 30 November 2011, payable on 27 April 2012 to Shareholders on the register on 30 March 2012. Upon payment of this dividend, Shareholders who invested at inception will have received aggregate distributions of 23.0p per share.

Outlook

The Board is satisfied with the early progress made in implementing the new investment strategy, and is optimistic that this will, in due course, produce an improvement in the performance of your Company when the new assets begin to mature and generate significant revenues. The medium term objectives are to stabilise the NAV, broaden the portfolio and, over time, improve the level of tax-free distributions to Shareholders which, in turn, should exert a more positive influence on the share price and its discount to NAV.

Maven Income and Growth VCT 5 PLC
Income Statement
For the year ended 30 November 2011
	Year ended 30 November 2011			Year ended 30 November 2010
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Losses in investments	-	(2,147)	(2,147)	-	(1,872)	(1,872)
Income from investments and deposit interest	194	-	194	183	-	183
Investment management fees	(67)	(201)	(268)	(109)	(329)	(438)
Other expenses	(298)	-	(298)	(286)	-	(286)
Net return on ordinary activities before taxation	(171)	(2,348)	(2,519)	(212)	(2,201)	(2,413)
Tax on ordinary activities	-	-	-	-	-	-
Return attributable to Equity Shareholders	(171)	(2,348)	(2,519)	(212)	(2,201)	(2,413)
Earnings per share (pence)	(0.29)	(3.96)	(4.25)	(0.36)	(3.72)	(4.08)

A Statement of Total Recognised Gains and Losses has not been prepared, as all gains and losses are recognised in the Income Statement.

The total column of this statement is the Profit and Loss Account of the Company.

Reconciliation of Movements in Shareholders' Funds
For the year ended 30 November 2011
	Year ended 30 November 2011		Year ended 30 November 2010
	£'000		£'000
Opening Shareholders' funds	21,337		24,632
Net return for year	(2,519)		(2,413)
Proceeds of share issue	-		2,038
Repurchase and cancellation of shares	-		(1,881)
Share issue expense	(4)		(148)
Dividends paid - revenue	-		-
Dividends paid - capital	(889)		(891)
Closing Shareholders' funds	17,925		21,337

Maven Income and Growth VCT 5 PLC
Balance Sheet
As at 30 November 2011
	30 November 2011		30 November 2010
	£'000	£'000	£'000	£'000
Fixed assets
Investments at fair value through profit or loss		16,289		20,936
Current assets
Debtors	34		33
Cash and overnight deposits	1,645		489
		1,679		522
Creditors
Amounts falling due within one year		(43)		(121)
Net current assets		1,636		401
Net assets		17,925		21,337
Capital and reserves
Called up share capital		5,928		5,928
Share premium account		1,384		1,388
Capital reserve - realised		(20,735)		(19,691)
Capital reserve - unrealised		(10,998)		(8,805)
Special distributable reserve		41,082		41,082
Capital redemption reserve		2,666		2,666
Revenue reserve		(1,402)		(1,231)
Net assets attributable to Ordinary Shareholders		17,925		21,337
Net asset value per Ordinary Share (pence)		30.24		36.00

Maven Income and Growth VCT 5 PLC
Cash Flow Statement
For the year ended 30 November 2011
	30 November 2011		30 November 2010
	£'000	£'000	£'000	£'000
Operating activities
Investment income received	177		225
Deposit interest and other income received	1		17
Investment management fees paid	(303)		(436)
Secretarial fees paid	(115)		(69)
Directors' expenses paid	(71)		(60)
Other cash payments	(140)		(159)
Net cash outflow from operating activities		(451)		(482)
Financial investment
Purchase of investments	(1,180)		(4,739)
Sale of investments	3,680		5,646
Net cash inflow from financial investment		2,500		907
Equity dividends paid		(889)		(891)
Net cash inflow/(outflow) before financing		1,160		(466)
Financing
Issue of Ordinary Shares	-		2,038
Repurchase of Ordinary Shares	-		(1,881)
Expense of share issue	(4)		(160)
Net cash inflow/(outflow) from financing		(4)		(3)
Increase in cash		1,156		(469)

Notes

Accounting Policies - UK Generally Accepted Accounting Practice

(a) Basis of preparation

The Financial Statements have been prepared under the historical cost convention, modified to include the revaluation of investments, and in accordance with the Statement of Recommended Practice 'Financial Statements of Investment Trust

Companies and Venture Capital Trusts' (the SORP) issued in January 2009. The disclosures on going concern in the Directors' Report form part of these Financial Statements.

(b) Income

Dividends receivable on equity shares and unit trusts are treated as revenue for the period on an ex-dividend basis. Where no ex-dividend date is available dividends receivable on or before the year end are treated as revenue for the period. Provision is made for any dividends not expected to be received. The fixed returns on debt securities and non-equity shares are recognised on a time apportionment basis so as to reflect the effective interest rate on the debt securities and shares. Provision is made for any fixed income not expected to be received. Interest receivable from cash and short term deposits and interest payable are accrued to the end of the year.

(c) Expenses

All expenses are accounted for on an accruals basis and charged to the income statement. Expenses are charged through the revenue account except as follows:

·      expenses which are incidental to the acquisition and disposal of an investment are charged to capital; and

·      expenses are charged to realised capital reserves where a connection with the maintenance or enhancement of the value of the investments can be demonstrated. In this respect the investment management fee has been allocated 25% to revenue and 75% to realised capital reserves to reflect the Company's investment policy and prospective income and capital growth.

(d) Taxation

Deferred taxation is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date, where transactions or events that result in an obligation to pay more tax in the future or right to pay less tax in the future have occurred at the balance sheet date. This is subject to deferred tax assets only being recognised if it is considered more likely than not that there will be suitable profits from which the future reversal of the underlying timing differences can be deducted. Timing differences are differences arising between the Company's taxable profits and its results as stated in the financial statements which are capable of reversal in one or more subsequent periods.

Deferred tax is measured on a non-discounted basis at the tax rates that are expected to apply in the periods in which timing differences are expected to reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date.

The tax effect of different items of income/gain and expenditure/loss is allocated between capital reserves and revenue account on the same basis as the particular item to which it relates using the Company's effective rate of tax for the period.

UK corporation tax is provided at amounts expected to be paid/recovered using the tax rates and laws that have been

enacted, or substantially enacted, at the balance sheet date.

(e) Investments

In valuing unlisted investments the Directors follow the criteria set out below. These procedures comply with the revised International Private Equity and Venture Capital Valuation Guidelines (IPEVCV) for the valuation of private equity and venture capital investments. Investments are recognised at their trade date and are designated by the directors as fair value through profit and loss. At subsequent reporting dates, investments are valued at fair value, which represents the Directors' view of the amount for which an asset could be exchanged between knowledgeable and willing parties in an arm's length transaction. This does not assume that the underlying business is saleable at the reporting date or that its current shareholders have an intention to sell their holding in the near future.

A financial asset or liability is generally derecognised when the contract that gives rise to it is settled, sold, cancelled or expires.

1.   For Investments completed within the 12 months prior to the reporting date, fair value is determined using the Price of Recent Investment Method, except that adjustments are made when there has been a material change in the trading circumstances of the company or a substantial movement in the relevant sector of the stock market.

2.   Whenever practical, recent investments will be valued by reference to a material arm's length transaction or a quoted price.

3.   Mature companies are valued by applying a multiple to their fully taxed prospective earnings to determine the enterprise value of the company.

3.1  To obtain a valuation of the total ordinary share capital held by management and the institutional investors, the value of third party debt, institutional loan stock, debentures and preference share capital is deducted from the enterprise value. The effect of any performance related mechanisms is taken into account when determining the value of the ordinary share capital. Preference shares, debentures and loan stock are valued using the Price of Recent Investment Method.

3.2  When a redemption premium has accrued, this will only be valued if there is a reasonable prospect of it being paid. Preference shares which carry a right to convert into ordinary share capital are valued at the higher of the Price of Recent Investment Method basis and the price/earnings basis.

4.   Where there is evidence of impairment, a provision may be taken against the previous valuation of the investment.

5.   In the absence of evidence of a deterioration, or strong defensible evidence of an increase in value, the fair value is determined to be that reported at the previous balance sheet date.

6.   All unlisted investments are valued individually by the Maven Capital Partners portfolio management team. The resultant valuations are subject to detailed scrutiny and approval by the Directors of the Company.

7.   In accordance with normal market practice, investments listed on the Alternative Investment Market or a recognised stock exchange are valued at their bid market price.

(f) Fair value measurement

Fair value is defined as the price that the Company would receive upon selling an investment in a timely transaction to an independent buyer in the principal or the most advantageous market of the investment. A three-tier hierarchy has been established to maximise the use of observable market data and minimise the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, for example, the risk inherent in a particular valuation technique used to measure fair value including such a pricing model and/or the risk inherent in the inputs to the valuation technique. Inputs may be observable or unobservable.

Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on best information available in the circumstances

The three-tier hierarchy of inputs is summarised in the three broad levels listed below:

·      Level 1 - quoted prices in active markets for identical investments;

·      Level 2 - other significant observable inputs (included quoted prices for similar investments, interest rates, prepayment speeds, credit risk etc); and

·      Level 3 - significant unobservable inputs (including the Company's own assumptions in determining the fair value of investments).

(g) Gains and losses on investments

When the Company sells or revalues its investments during the year, any gains or losses arising are credited/charged to the

Income Statement.

Movement in reserves

	Share premium account	Capital reserve realised	Capital reserve unrealised	Special distributable reserve	Capital redemption reserve	Revenue reserve
	£'000	£'000	£'000	£000	£000	£'000
At 1 December 2010	1,388	(19,691)	(8,805)	41,082	2,666	(1,231)
Gains on sales of investments	-	46	-	-	-	-
Net decrease in value of investments	-	-	(2,193)	-	-	-
Investment management fees	-	(201)	-	-	-	-
Dividends paid	-	(889)	-	-	-	-
Expense of share issue	(4)	-	-	-	-	-
Net return on ordinary activities	-	-	-	-	-	(171)
At 30 November 2011	1,384	(20,735)	(10,998)	41,082	2,666	(1,402)

Returns per Ordinary Share

The returns per share are based on the following figures:

	Year ended	Year ended
	30 November 2011	30 November 2010
	£'000	£'000
Weighted average number of Ordinary Shares in issue	59,277,137	59,272,902
Revenue return	(£171,000)	(£212,000)
Capital return	(£2,348,000)	(£2,201,000)
Total return	(£2,519,000)	(£2,413,000)

Net asset value per Ordinary Share

Net asset value per Ordinary Share as at 30 November 2011 has been calculated using the number of Ordinary Shares in issue at that date of 59,277,137 (2010: 59,277,137).

Principal risks and uncertainties

The principal risks facing the Company relate to its investment activities and include market price, interest rate and liquidity risk. An explanation of these risks and how they are managed is contained in Note 18 to the Financial Statements. Additional risks faced by the Company, and the mitigation approach adopted by the Board, are as follows:

·      investment objective: the Board's aim is to achieve long term capital appreciation and generate maintainable levels of income for Shareholders, while managing risk by ensuring an appropriate diversification of investments;

·      investment policy: inappropriate stock selection leading to underperformance in absolute and relative terms is a risk which the Manager mitigates by operating within investment guidelines and regularly monitoring performance against the peer group. The regulations affecting Venture Capital Trusts are central to the Company's investment policy;

·      discount volatility: due to the lack of liquidity in the secondary market, venture capital trust shares tend to trade at discounts to net asset values; and

·      regulatory risk: the Company operates in a complex regulatory environment and faces a number of related risks. A breach of Section 274 of the Income Tax Act 2007 could result in the Company being subject to capital gains tax on the sale of its investments. A breach of the VCT Regulations could result in the loss of VCT status and consequent loss of tax reliefs currently available to Shareholders. A serious breach of other regulations, such as the UKLA Listing Rules or the Companies Act, would lead to suspension of its shares from the Stock Exchange, loss of VCT status and reputational damage. The Board receives quarterly reports from the Manager in order to monitor compliance with regulations.

At least twice each year the Board considers all of the above risks and the measures in place to manage them.

Basis of preparation of the Financial Statements

This Financial Statements included in this Announcement has been prepared on the same basis as the Annual Report and Financial Statements for the year ended 30 November 2010. The Annual Report and Financial Statements for the year ended 30 November 2011 will be filed with the Registrar of Companies and issued to Shareholders in due course.

The financial information contained within this Announcement does not constitute the Company's statutory Financial Statements as defined in the Companies Act 2006. The statutory Financial Statements for the year ended 30 November 2010 have been delivered to the Registrar of Companies and contained an audit report which was unqualified and did not constitute statements under S498(2) or S498(3) of the Companies Act 2006.

Directors' responsibility statement

The Directors confirm that, to the best of their knowledge:

·      the Financial Statements have been prepared in accordance with the applicable accounting standards and give a true and fair view of the assets, liabilities and financial position of the Company as at 30 November 2011 and for the year to that date; and

·      the Directors' Report includes a fair review of the development and performance of the Company, together with a description of the principal risks and uncertainties that it faces.

Circular to Shareholders

Along with the Annual Report and Financial Statements for the year ended 30 November 2011, the Company has issued a Circular to Shareholders containing the Notice of Annual General Meeting and recommended proposals to approve a performance incentive arrangement. The forthcoming Annual General Meeting of the Company will be held at 10.30am on 17 April 2012 at 9-13 St Andrew Street, London EC4A 3AF and the notice includes the usual resolutions for which authority from Shareholders is sought at Annual General Meetings together with a proposal to obtain Shareholder approval to introduce a performance incentive fee arrangement for Maven, the investment manager of the Company.

As set out in further detail in the Circular, the proposed performance incentive arrangement will entitle Maven to receive:

·      a sum equivalent to 12.5% of the total return over cost generated by the new private equity investments made by Maven that achieves a realisation, adjusted for any realised losses incurred in respect of other new investments and subject to an annual hurdle of 4% on the new investments realised;

·      a sum equivalent to 7.5% of the total return over cost generated by inherited private equity investments that achieve a realisation, adjusted for any realised losses incurred in respect of other legacy private company investments; and

·      a sum equivalent to 7.5% of any annual increase in the value of the inherited quoted portfolio.

The base date for the valuation of the inherited investments was set at 28 February 2011 and the value for these portfolios is to be subsequently recalculated as at 30 November each year from 2012 onwards. In the case of the inherited quoted portfolio, a high water-mark is re-set on each occasion that a fee becomes payable to ensure that subsequent fees can only be earned on performance improvements in excess of those achieved in previous periods.

Maven is, in its capacity as investment manager of the Company, regarded as a related party of the Company under the Listing Rules. Therefore, the performance incentive arrangement constitutes a related party transaction requiring the approval of Shareholders pursuant to the Listing Rules and a resolution to that effect will be proposed at the Annual General Meeting.

The Board believes that the proposals and the resolutions to be proposed at the Annual General Meeting are in the best interests of the Shareholders as a whole and unanimously recommends they to vote in favour of all Resolutions to be put before the Meeting.

Other information

Copies of this announcement, and of the Annual Report and Financial Statements  for the year ended 30 November 2011, will be available to the public at the office of Maven Capital Partners UK LLP, 149 St Vincent Street, Glasgow G2 5NW; at the registered office of the Company, 9-13 St Andrew Street, London EC4A 3AF and on the Company's website at www.mavencp.com/migvct5.

Neither the content of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

The Annual Report and the Circular have been submitted to the National Storage Mechanism will be available for inspection at: www.Hemscott.com/nsm.do.

By Order of the Board

Maven Capital Partners UK LLP

Secretary

26 March 2012

 

END

 

 

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