ProVen have put together the highlights for their VCTs and EPS products from the economically challenging year.
2022 was another challenging year for the UK economy as rising inflation and interest rates put pressure on both businesses and consumers. Inflation reached a 41-year high of 11.1% in October on the back of rising energy and food prices, and interest rates increased from 2.25% to 3% - the biggest jump since 1989, and meaning rates reached their highest level since 2008.
But despite the wider economic uncertainty, the year for ProVen has been marked by resilience, particularly within the ProVen Estate Planning Service (PEPS).
Client numbers have grown, we have received some fantastic press coverage, and we launched a new website to showcase more of our achievements.
Below, we round up some of our 2022 highlights for the ProVen products.
The ProVen Estate Planning Service (PEPS) was thrilled to receive 87 out of 100 in the latest Tax Efficient Review (TER).
The TER is an independent research service for financial advisers that analyses the performance, strengths and weaknesses of investment providers.
Its review concluded that PEPS has shown “impressive” recent performance and provides a “tailored investment proposition” that has generated returns above targets in recent years.
The overall blended return for investors in PEPS has been 5.2% a year over the past five years, above the stated target returns of 4-5% a year.
PEPS, which aims to offer investors access to BR-qualifying investments for inheritance tax planning, has two investment strategies: lending and solar.
Money invested in PEPS is directed to one or more of our four trading companies that loan money to SMEs and invest in solar technologies.
These four trading companies are: Solar Growth, Solar Income & Growth, Secured Lending and ProVen Legacy.
Our lending companies have now provided funding of more than £40m to UK SMEs and our solar companies now have total assets worth £88.3m. This includes a portfolio of 9 ground-mounted solar farms and 2,700 rooftop assets.
The five-year blended growth of PEPS as of September 2022 stands at 5.2%.
We also spent a lot of time this year preparing for the launch of our new website, proveninvestments.co.uk. The website brings together the ProVen VCTs and ProVen Estate Planning Service in one place, launching ProVen as a family of products covering a range of tax-efficient opportunities.
The website launched in October 2022. As well as including details of our VCTs and Estate Planning Service, the website also has insights and guides to help advisers and investors learn more about the UK’s tax system and tax-efficient schemes.
The ProVen Estate Planning Service officially launched in 2021, and this year we focused on spreading the word about our new service to financial advisers and private investors.
We were delighted to receive press coverage that highlighted our expertise in estate planning and inheritance tax mitigation.
This included Anne O’Loughlin’s comments on the growing burden of inheritance tax on UK investors in the i newspaper and an article in Money Marketing, written by director Andrew Webster, on how financial advisers can protect their clients’ portfolios in an era of high inflation.
This year, we were awarded the Official CPD Standards Office Accreditation. As an accredited provider, we hosted three CPD-accredited webinars in the second half of 2022.
The interactive sessions were aimed at intermediaries looking to boost their skills and expertise in financial services.
We enjoyed hosting these events and received such positive feedback from the attendees that we hope to do a programme of ten webinars in 2023 that covers a variety of topics in finance.
This year’s webinars are detailed below:
- An introduction to ESG and its role in private investing - hosted in June 2022
- The Venture Capital Trust (VCT) scheme and opportunities for income tax relief - it took place in September 2022
- Estate planning and managing inheritance tax liabilities - hosted in December 2022
We launched the ProVen LinkedIn page at the beginning of 2022. We have since built a dedicated network of loyal followers and are enjoying interacting with our audience.
Do subscribe to our page if you haven’t already. We share expert articles and news from both our ProVen VCTs and our ProVen Estate Planning Service. It’s a great way to learn more about investing and tax relief!
In the Government’s Autumn Statement of November 2022, it was confirmed that the inheritance tax threshold will remain unchanged until 2028.
This means the threshold at which households become liable for inheritance tax will have been unchanged for almost two decades.
We expect more estates to become liable for inheritance tax over the coming years, due to rising house prices and general inflation. This means there is likely to be increased demand for estate planning services such as PEPS and we believe we offer a strong opportunity for investors.
There was some relief for VCT investors this year though, as the Treasury confirmed the sunset clause for VCT income tax relief - due to end in 2025 - would be extended indefinitely.
ProVen VCT and ProVen Growth and Income VCT launched two combined offers for subscription in 2022. In January, the two funds launched an offer for subscription for the tax years 2021-22 and 2022-23, seeking to raise up to £20m each, with an over-allotment facility of up to £20m each. The offer closed in mid-August after raising close to £70m.
In October, the ProVen VCTs launched a new offer for subscription for the tax years 2022-23 and 2023-24. Each fund is seeking to raise up to £20m, with the potential of an over-allotment facility that would allow a further £20m to be raised per VCT.
2022 was not only busy with fundraising but with deploying the newly raised funds in companies as well. Our VCTs invested £56.5m this year into nine new deals and nine follow-ons, exceeding the investment rate achieved in 2021.
The VCTs have had some notable exits this year, including:
- Zoovu, an AI-powered discovery platform for e-commerce. Zoovu had been part of the ProVen VCTs' portfolio since 2017. The company successfully raised $169m Series C led by FTV Capital. As part of the round, the ProVen VCTs completed a partial exit from the company.
- Blis, an advertising technology company that uses location and demographic data to define digital audiences, without relying on personal data. The ProVen VCTs initially backed the business in 2008, before investing again alongside Beringea’s U.S. funds in 2012. The ProVen VCTs and Beringea U.S. completed an exit from Blis following a secondary buyout by LDC.
As with all investments, your capital is at risk and past performance is not a reliable indicator of future results. Investments accessed through the ProVen Estate Planning Service are made into private companies and are deemed to carry a higher risk than many other types of investments.
UK tax rules and regulations are subject to change, and such changes may be retrospective. Your ability to obtain tax reliefs will depend on your personal circumstances.
The contents of this article should not be construed as investment, tax, financial or legal advice. We recommend that you seek advice from a regulated Financial Adviser. Investors should only subscribe for shares in the ProVen VCTs or ProVen Estate Planning Service on the basis of information contained in the prospectus, a full copy of which is available on the ProVen website.
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Find out more about the ProVen VCTs’ annual shareholder event, which featured insights from Beringea, the investment manager, the boards of the two funds, as well as several of the companies from the portfolio
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