Change of Manager

 

TIDMSVC2 
 
RNS Number : 6391X 
Spark VCT 2 PLC 
09 December 2010 
 

 
                                                                 9 December 2010 
SPARK VCT 2 PLC 
Change of manager 
SPARK VCT 2 PLC 
 
 Not for release, publication or distribution (in whole or in part) in, into or 
    from any jurisdiction where to do so would constitute a violation of the 
                      relevant laws of such jurisdiction. 
 
9 December 2010 
 
 
 
Change of manager 
 
The Board of SPARK VCT 2 PLC ("SPARK VCT 2" or the "Company") is pleased to 
announce that Albion Ventures LLP ("Albion Ventures") will be appointed 
investment manager to the Company with effect from 1st January 2011. The Company 
and SPARK Venture Management Limited ("SPARK Venture Management") have agreed to 
terminate the existing investment manager's agreement.  A similar announcement 
is being made by the Board of SPARK VCT PLC simultaneously with this 
announcement. 
 
On 29th January 2010, the Board announced that there should in future be a focus 
on investments selected with a view to yield as well as capital stability. In 
the Annual Report published on 31st March 2010 (the "Annual Report"), the Board 
noted that there will be a greater emphasis on positioning some of the more 
developed investee companies for an exit, and providing conditions develop 
favourably, making a start of turning some of the more significant assets into 
cash. Since then successful realisations have enabled the Company to pay a 
dividend of 1 pence per share on 24th September 2010. A number of further 
realisations are in progress and SPARK Venture Management will work alongside 
Albion Ventures during its notice period in order to assist with these 
investments. 
Given the existing manager, SPARK Venture Management, is a specialist technology 
investor, and is moving its fund management focus away from retail funds towards 
regional and institutional funds, the Board believes that the appointment of a 
new manager with expertise of growing more mature businesses across a broad 
range of sectors furthers the Board's core aim of providing a sustainable future 
for the Company with a view to delivering a steady annual yield. Following an 
intensive selection process the Independent Directors unanimously selected 
Albion Ventures as new investment manager. The Board wishes to thank SPARK 
Venture Management for its efforts in stabilising the portfolio and starting the 
work in realising investments.  A number of potential exits from the existing 
investment portfolio are in progress and SPARK Venture Management has agreed to 
work alongside Albion Ventures during the first 12 months in order to assist 
with these investments. Albion Ventures will be responsible for the 
administration of the portfolios with SPARK Venture Management's assistance. 
Albion Ventures (formerly Close Ventures) is one of the largest and most long 
established VCT managers with just under GBP200 million of VCT funds under 
management. The business was started in 1996, and currently manages seven VCTs, 
with a broad policy of balancing income generating, asset based investments with 
higher growth companies. 
Pursuant to the existing investment management agreement (the "Existing 
Agreement"), the Company is required to give SPARK Venture Management 12 months 
notice of termination. The Company and SPARK Venture Management entered into a 
termination agreement (the "Termination Agreement") on 8 December 2010, pursuant 
to which the Company has agreed to pay SPARK Venture Management the management 
and administration fees due under the Existing Agreement. Under the Termination 
Agreement, the management fee shall be calculated by reference to the net asset 
value of the Company as at 31 December 2010, subject to appropriate adjustments 
in respect of dividends or realisations made during 2011. SPARK Venture 
Management and the Company have agreed that the Termination Agreement is in 
settlement of all claims against each other. 
Albion Ventures has agreed to waive its management and administration fees for 
the first year. Thereafter Albion Ventures will be entitled to an annual 
management fee of 2% of net asset value, along with an administration fee of 
GBP50,000 p.a. The aggregate fees payable for management and administration 
(including the management and administration fees due to Albion Ventures, 
directors' remuneration, registrars' fees, stockbrokers' fees, company 
secretarial fees and the fees of Company's auditors) will be subject to an 
aggregate annual cap of 3% of net asset value. The Board intends to discuss an 
appropriate incentive arrangement with Albion Ventures at a later date, which 
will be subject to shareholder approval at the time. 
Once appointed Albion Ventures will review methods of increasing the cost 
effectiveness of the management of the VCT including potential economies of 
scale. 
 
Change of Investment Policy 
The Company's investment policy was refined at the start of 2010 towards later 
stage opportunities but within the existing sector focus given SPARK Ventures 
expertise. The Board now believes that it is in shareholders' interests to adopt 
a new investment strategy which is to build a portfolio comprising a greater 
proportion of lower risk, income producing investments with a lesser proportion 
of higher risk investments with greater growth prospects. Together, it is 
intended that these two categories of investment, which are common to the 
majority of the seven Albion Ventures managed VCTs, will enable the Company to 
produce a predictable dividend stream with the prospect of a gradual recovery in 
capital value. 
 
Accordingly, a general meeting of the Company will be convened to explain 
further the proposed investment strategy, its implications for the Company's 
dividend and buy back policies, and to seek shareholder approval of the new 
investment policy. At the same time the Board will propose a shareholder 
resolution to change the Company's name. 
Commenting upon the proposed change of Manager, Robert Wright, Chairman of SPARK 
VCT 2 PLC, said, ' Albion has an excellent reputation and its record as a 
manager of venture capital trusts speaks for itself. The board is confident the 
appointment should bring significant benefits in terms of shareholder value in 
the medium term'. 
Patrick Reeve, Managing Partner of Albion Ventures, added: 'We were very pleased 
to be asked to become the fund manager of the Company. Albion is strongly 
committed to VCTs and we look forward to working with the Board to increase 
shareholder value.' 
Andrew Carruthers, Managing Director of SPARK Venture Management said: "We look 
forward to working with Albion and the Board to realise the value that now 
exists within the portfolio". 
 
 
Note to Editors 
 
For further information please visit www.albion-ventures.co.uk or contact: 
 
Albion Ventures 
Peregrine Communications 
Patrick Reeve/Robert Whitby-Smith                                 Roddie 
Vaughan-Thomas 
Managing Partner/Partner                                               Partner 
Tel: [phone]                                                         Tel: 
020 3178 6870 
 
Execution Noble & Company Limited                               SPARK Venture 
Management Limited 
Financial Adviser 
Andrew Carruthers 
John Riddell/Harry Stockdale                                          Managing 
Director 
Tel: [phone]                                                         Tel: 
020 7857 7736 
 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
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