Downing Four VCT

Sponsor Service – Prospectus for £30million secondary fundraise for Downing FOUR VCT.

Downing FOUR VCT plc

Downing FOUR VCT is a long established venture capital trust (VCT) with a number of share classes with various investment strategies, created at the time of fundraisings subsequent to the Company’s formation in 2009. It was renamed from Downing Structured Opportunities VCT 1 plc in July 2015, following its merger with three other Downing VCTs. At the time of SPARK’s appointment all but two of its eight share pools were in realisation mode, with two “evergreen” pools – the Healthcare and Generalists pools having been formed in 2016.

In November 2018, Downing FOUR issued a prospectus relating to an offer for subscription for new Generalist Shares and new Healthcare Shares in readiness for the peak VCT season ahead of the 5 April 2019 tax year end. The aim was to raise approximately £30 million total, £20 million in Generalist Shares and £10 million in Healthcare Shares (with an over-allotment facility of up to £20 million for each class). The Board believed that the economic climate created opportunities for investors to take medium to long term views in investments in well managed UK businesses looking for capital to expand. Additionally, recent changes to VCT legislation narrowed the range of investments which VCTs could invest in, providing opportunities for well established VCT managers with strong track records to successfully source funding.

The Company raised this money in order to invest predominantly in unquoted VCT Qualifying Companies, which is in line with the Company’s investment policy.

SPARK and partners Neil Baldwin and Mark Brady have strong track records in acting as Sponsor to VCTs, having brought numerous VCTs to market since VCTs were first enabled by the Finance Act in 1995. SPARK has acted for a number of different VCT managers on IPOs and top up offers, as well as VCT mergers since 2012. SPARK has successfully worked with Downing VCTs before, notably Downing ONE VCT plc on its merger with 5 other VCTs, and subsequent fundraises, and tender offers for Downing Planned Exit VCT 6 plc and Downing Planned Exit VCT 7 plc.