Quester VCT merger is beginning of a trend

Following shareholder approval last month, Quester has successfully merged its three venture capital trust offerings into one vehicle with combined assets of 53.8m.

Investors in Quester VCT 2 are to receive 1,024 new VCT shares for every 1,000 shares they previously held, while Quester VCT 3 shareholders will get 981 new shares for every 1,000 they held.

According to the group, the mergers of Quester VCT, Quester VCT 2 and Quester VCT 3 into one enlarged vehicle is beneficial as it increases the range and diversity of the investment portfolio and spreads the risk. Additionally, by spreading the cost base there will be a reduction in annual running costs as a percentage of net assets. The new portfolio consists of 34 investments: 10 quoted and 24 unquoted.

All three VCTs invested in life science, healthcare and technology-related companies. Consequently Ben Yearsley (pictured), senior investment manager at Hargreaves Lansdown, says their merger is a good idea.

He says: ” Following the merger of four Chrysalis VCTs, this is the second set of mergers to have taken place this year and I think it is the beginning of a trend. If a group is managing a number of venture capital trusts that use the same manager and have similar mandates, a merger makes sense. Indeed, the boards of Murray VCTs 1, 2 and 3 have indicated they too would like to merge.”

The board of the enlarged Quester VCT intends to declare a special dividend to all shareholders this September, which will be paid out of the surplus assets of the merger.