Oxford Tech 2 VCT Proposed Offer For Subscription Of A New Class Of Shares, Adoption Of New Articles Of Association, Adoption...

 
TIDMOXH 
 
   oxford technology 2 
 
   venture capital trust plc 
 
   Proposed offer for subscription of a new class of 
 
   shares, adoption of new articles of association, adoption of investment 
 
   policy for new class of shares and Notice of General Meeting 
 
   The Company announces that it is today posting a circular to 
Shareholders convening a general meeting at 11:00 a.m. on 19 November 
2018 at Magdalen Centre, Oxford Science Park, Oxford, OX4 4GA to 
consider the proposals as described further below. The Circular will 
also be available on the OTM website (www.oxfordtechnology.com) and will 
shortly be available from the National Storage Mechanism. 
 
   1.         Introduction 
 
   The Board of Oxford Technology 2 Venture Capital Trust Plc today 
announces its intention, subject to Shareholders' approval, to launch an 
offer for subscription of a new class of shares (the B Shares) and to 
appoint a third party, Chelverton Asset Management Limited (Chelverton) 
to manage this new share class. It is proposed that the new funds raised 
under this Offer will be invested using a more generalist investment 
policy than the one that currently applies to the Company for its 
Ordinary Shares. 
 
   2.         Background and Summary 
 
   As the Company's portfolio has developed and been realised, the NAV of 
the Company has reached a point where covering the fixed costs required 
to maintain the VCT as a going concern is becoming increasingly 
uneconomic, despite (in the Directors' understanding) the Company having 
the lowest level of costs of any VCT. Oxford Technology Management 
Limited (OTM) provides the Company with a cost cap, but this is 
unsustainable in the long term. 
 
   The Directors have regularly reviewed this position and considered the 
options available to the Company and its Shareholders. 
 
   One option considered was to place the VCT into voluntary wind up. 
However, this would eventually crystallise the capital gains which are 
currently sheltered for certain Shareholders who subscribed for Shares 
when the Company was launched, as well as probably forcing a sale of the 
remaining 9 investments earlier than would be optimal to maximise 
Shareholder value, since a distribution in specie is neither practical 
nor tax efficient.  The Directors do not consider this is in the 
interests of Shareholders, and have therefore looked at alternative 
solutions. 
 
   The Directors considered looking to merge the Company with another VCT. 
This had two disadvantages:  the possibility that existing Shareholders 
would lose some or all of the potential upside associated with their 
legacy portfolio, and the costs associated with a merger would have 
represented several years of additional cost to existing Shareholders. 
The Directors could not find a merger route which was economically 
beneficial for Shareholders, whilst maintaining the Ordinary Share Pool 
as a distinct set of assets. 
 
   The better solution was to find a way of enlarging the asset base of the 
Company to spread costs across a wider asset base.  The Directors 
reviewed the option of raising new funds via OTM, but OTM's focus is now 
on their SEIS/EIS portfolio, given OTM's view that this is a better 
wrapper for such investments these days; and as the existing portfolio 
shows, the types of investment that OTM invest in tend to have a much 
longer than average time horizon for eventual realisation of assets than 
the majority of investors in a VCT want, as demonstrated by the 
relatively small amount raised by the Company's top-up offers. 
 
   The alternative that the Directors determined as the most efficient 
mechanism was to raise a new B Share class under a new Investment 
Manager with all the costs of the fund raise being met by the new 
Investment Manager.  This allows time for the existing portfolio to be 
realised for the benefit of existing Shareholders, whilst making the 
costs to enable this more manageable. Any new investments will be for 
the benefit of Investors in the new B Share class. 
 
   3.         Offer of B Shares 
 
   For the reasons set out above, the Directors believe that the most 
attractive solution for Shareholders is a proposal by Chelverton Asset 
Management Limited, an experienced team with a strong track record. For 
some time Chelverton has been looking into the possibility of 
establishing a VCT as a new offering for their existing client base. 
Following discussions on various matters (including the costs of 
establishing a new VCT and the level of annual running costs of such a 
new VCT), Chelverton has proposed that a new share class (the B Shares) 
is created in the Company, with Chelverton appointed Investment Manager 
of the Company.  Chelverton would manage the investments of the B Share 
Pool which will have a more generalist investment policy than the one 
that applies to the existing Ordinary Share. 
 
   As regards the Company's current portfolio for existing Ordinary Shares 
(the Ordinary Share Pool), the investment policy of the Company will 
remain unchanged and OTM, the existing investment adviser, will continue 
as Investment Adviser to the Ordinary Share Pool. It remains the Board's 
intention to make distributions from the Ordinary Share Pool to Ordinary 
Shareholders when appropriate realisation opportunities arise. 
 
   Chelverton is a boutique asset management business founded in 1998 with 
a specialist focus on smaller quoted UK equities and unquoted SMEs. 
Further detail on Chelverton and its track record is set out in section 
4 below. 
 
   Both the Board and Chelverton see considerable advantages in this 
proposal. One advantage to Investors in the B Shares is that the Company 
is already an established VCT and raising of further funds will allow 
the Company's fixed running costs to be spread over a greater asset base, 
thus reducing the burden for all Shareholders.  As the Company has not 
undertaken a fundraising for a number of years, the Board also believes 
that some existing Shareholders may be interested in subscribing for the 
new class of shares in their Company. 
 
   The Company and Chelverton propose to launch an offer for subscription 
in late November to early December 2018 to raise up to gross proceeds of 
approximately GBP5 million through the issue of up to 5,000,000 new B 
Shares (the Offer), together with an over-allotment facility of up to 
approximately further GBP5 million. Existing Shareholders will be 
offered the opportunity to subscribe for B Shares under the Offer at a 
discount, plus an additional discount for Shareholders who subscribe for 
B Shares prior to 22 March 2019.  It is the intention that Shareholders 
will have the option to apply for B Shares under the Offer in one or 
both of tax years 2018/19 and 2019/20. 
 
   Following Admission, the name of the Company will be changed to 
"Chelverton VCT Plc". 
 
   The purpose of the Circular is therefore to explain and seek 
Shareholders' approval under the Act and the Listing Rules for the 
necessary authorities to enable the Offer to be made, including 
Resolutions to: 
 
   --           adopt new articles of association of the Company inter alia 
to create B Shares and enable the Directors to change the Company's 
name; 
 
   --           grant authorities to allot B Shares; 
 
   --           cancel the Company's share premium account; 
 
   --           adopt a new investment policy of the Company in respect of 
B Shares; 
 
   --           cancel the Company's capital redemption reserve; and 
 
   --           grant authority to make market purchases of B Shares. 
 
   The full text of the Resolutions is set out in the Notice of General 
Meeting. 
 
   It is proposed that the B Share class will form a separate pool of 
capital (distinct from the Ordinary Share Pool) that will be managed by 
Chelverton on behalf of the Company. The funds in the B Share Pool will 
be invested in accordance with a more generalist investment policy for 
the B Shares, proposed to be adopted by the Company as described in 
section 6 below and set out in full at the end of this announcement, 
which will reflect the expertise and experience of Chelverton. 
 
   Conditional on Admission of the B Shares, the Company proposes to 
appoint Chelverton as the Company's Investment Manager and ISCA as 
administrators and company secretary to the Company.  Following 
Admission, the Company would apply to the FCA to be registered as a 
small self-managed AIFM. 
 
   Subject to Shareholders passing the Resolutions set out in the Notice of 
General Meeting the Directors propose to launch the Offer through the 
issue of a prospectus.  It is expected that the Prospectus launching the 
Offer will be published in late November to early December 2018. 
 
   4.   Chelverton 
 
   Founded in 1998, Chelverton is a boutique asset management business with 
a specialist focus on investing in UK listed mid and small cap equities 
and unquoted SMEs. It is an independent asset management business which 
is majority employee owned, with offices in Bath, Edinburgh and London 
and it has 11 employees with an experienced team of 8 fund managers. 
Chelverton is authorised and regulated by the FCA. 
 
   Chelverton launched its first investment trust (Chelverton Growth Trust 
PLC) focused on companies traded on the Main Market and AIM with a 
market capitalisation at the time of investment of up to GBP50 million 
and which are believed to be at a point of change, while also investing 
in unquoted investments where it is believed that there is a likelihood 
of the shares becoming listed on the Official List or traded on AIM or 
the investee company being sold. Chelverton then launched its flagship 
investment trust with a UK Mid & Small Cap progressive income strategy 
in 1999, Chelverton UK Dividend Trust PLC. 
 
   Chelverton launched its first open ended vehicle Chelverton UK Equity 
Income Fund in December 2006 and then Chelverton UK Equity Growth Fund 
in October 2014, each of which have become award-winning UK small and 
mid-cap OEICs.  Chelverton recently expanded by taking on two well-known 

investment managers to run a European focused fund, Chelverton European 
Select Fund.  The firm currently manages 2 Investment Trusts and 3 
open-ended Investment Companies investing in quoted equities, with over 
GBP1bn in total assets (as at 30 September 2018). 
 
   On the unquoted side, Chelverton manages Chelverton Investor Club (the 
"Club") which was established in 2009 as a specialist investor in 
unquoted UK small companies. As well as managing funds, Chelverton has 
invested some GBP50m in a range of privately owned SMEs. 
 
   Chelverton's unquoted investment team has developed the Club to offer 
discerning investors a simple and discrete route to investing directly 
in private UK companies, using its strong pedigree in managing the 
acquisition of, and investment in, unquoted SMEs. This is founded on 
years of extensive experience structuring bespoke investments for a 
range of exacting clients, including a large family office, an AIM 
traded holding company (CEPS plc) and a group of individual private 
investors looking for a diversified portfolio. 
 
   Investments in which the Club has participated include Tufwell, a glass 
processing and merchanting Crawley-based company, which was sold in 2018 
after a four year hold, delivering just under 3x return for investors, 
and Hickton, the UK's leading independent provider of specialist Clerk 
of Works services in respect of building construction, civil and 
structural engineering, and historic building refurbishment work. 
 
   Other recent investments, representative of the type that the B Share 
Pool will be invested in include Qualification Check, the leading 
provider of degree and other professional award verifications in the UK, 
VeloVixen, the UK's pre-eminent on-line retailer of apparel for female 
cyclists, and iDefigo, an Internet of Things business focused on 'smart' 
surveillance cameras. 
 
   Many of these transactions have been sourced through 
proprietary/off-market introductions, and deal-flow has been unable to 
be satisfied by the investment capacity of the Club alone. Investors in 
the B Share Pool will have access to the VCT-qualifying element of these 
opportunities, leveraging the incremental funding capability of the Club 
participants. 
 
   Chelverton believes that making a direct equity investment does not have 
to be a risky, complex endeavour. They only pursue companies that 
present proven business models, are backed by talented management teams 
and operate in sectors with significant growth opportunities. 
 
   Biographies of the key personnel of the Investment Manager who will be 
involved in the provision of services to the Company are as follows: 
 
   David Horner (Managing Director) 
 
   David is an acclaimed fund manager, specialising in small- to mid-cap 
quoted investments and SME unquoted investments. He has 30 years' 
experience in corporate finance assignments, identifying, structuring 
and managing investments as well as purchasing and managing private 
equity, specialist listed and AIM portfolios. He qualified as a 
chartered accountant in 1985 and has held senior positions in Deloitte, 
3i Corporate Finance and Strand Partners Limited, with several public 
and private company directorships. David set up Chelverton to provide 
the investment management for the investment trust now known as 
Chelverton Growth Trust PLC, and was responsible for launching that 
company in May 1999 and is still its manager. He has also co-managed MI 
Chelverton UK Equity Income Fund since its launch, the success of which 
consistently earns him a Citywire AAA fund manager rating. 
 
   Richard Bucknell (Investment Director) 
 
   Richard is a highly experienced private equity investment professional 
who has led in excess of 30 investments into smaller companies since 
1998, and has gone on to represent investor interests on the boards of 
many of those companies following investment. Richard has helped to 
shape the strategic development of these companies over time, through to 
managing the realisation process on behalf of investors. 
 
   Prior to joining Chelverton, Richard held a number of senior investment 
management positions at firms including Barclays Ventures, Livingbridge 
(formerly ISIS Equity Partners), where he was a senior member of the 
team investing on behalf of the Baronsmead VCTs, and Catapult Venture 
Managers. 
 
   5.         Changes to the Board and Audit Committee, Company Secretary 
and Management and Administration 
 
   Conditional on, and with effect from, Admission, Ian Clifton has agreed 
to join the Board.  Ian has worked in investment banking including at 
IBJ, ABN AMRO and West LB.  He then worked for Mercer and Scottish 
Widows Investment Partnership and was a founding partner of C-Suite, 
advising boards of directors and senior management on strategies for 
pension funding.  He also provides management consultancy to a number of 
companies in the disruptive technology sector. 
 
   Conditional on, and with effect from, Admission, David Livesley will 
retire from the Board and James Gordon will resign as company secretary. 
Robin Goodfellow will remain on the Board following Admission and retire 
from the Board and the Audit Committee at the end of the next annual 
general meeting of the Company.  The Board is grateful for their 
respective contributions to the Board. 
 
   Conditional on Admission, Alex Starling and Ian Clifton will join the 
Audit Committee. It is anticipated that Richard Roth will retire from 
the Audit Committee at the end of the Company's 2019 annual general 
meeting and Ian Clifton will become chairman of the Audit Committee. 
 
   Conditional on Admission, ISCA will be appointed to provide 
administration and company secretarial services.  ISCA provides 
accounting, fund administration and company secretarial services to a 
number of investment trust companies including a VCT. 
 
   Conditional on Admission, the Company's management agreement with OT2 
Managers Limited will be terminated and OT2 Managers Limited will 
terminate its back-to-back agreement with OTM. If Shareholders approve 
the Proposals by voting in favour of the Resolutions at the General 
Meeting, the Company would enter into an investment management agreement 
with Chelverton (conditional on Admission) immediately before the 
Prospectus is published.  Chelverton would be paid a management fee of 
2% of the Net Asset Value of the B Share Pool with no performance fee 
and would agree to pay the Company's annual running costs above a 
cost-cap calculated at 3.5% of the Company's Net Asset Value as set out 
in the latest audited accounts, so long as Chelverton remains the 
Company's investment manager.  Chelverton's appointment would be for an 
initial fixed term of five years, terminable thereafter on 12 months' 
notice and terminable at any time on the usual events of default.  OTM 
would continue to act as investment adviser to the Ordinary Share Pool 
and would receive an investment advisory fee of 0.5% of the Net Asset 
Value of the Ordinary Share Pool (a reduction of 0.5% in their current 
fee in recognition of the fact that they will no longer be responsible 
for the administration of the company or subject to a cost cap).   No 
change to the existing performance fee arrangements in relation to the 
Ordinary Shares is being proposed, other than a waiver of such 
entitlements by Alex Starling and Richard Roth. 
 
   6.         Investment Policy for the B Shares 
 
   As well as the proposal to appoint Chelverton as Investment Manager of 
the Company, the Directors propose that a separate investment policy be 
adopted in respect of the B Shares to allow the Company to invest the 
proceeds of the Offer and any subsequent fundraisings in a wider range 
of Qualifying Investments than is possible under the investment policy 
for the Ordinary Shares. 
 
   The investment policy for the B Shares will be to invest in a broad 
range of Qualifying Investments and that the non-qualifying portfolio 
will comprise units or shares in UCITS or AIF (in each case redeemable 
on not more than 7 days' notice), or short term cash deposits or shares 
or securities acquired on a recognised investment exchange (within the 
meaning of Part XVIII FSMA). 
 
   In accordance with the Listing Rules, the Company requires Shareholders' 
approval to make a material change to its investment policy. Since the 
Directors believe that the adoption of a separate investment policy for 
the B Shares constitutes a material change, a resolution to adopt the 
investment policy, for the B shares, will be proposed at the General 
Meeting. 
 
   The investment policy for the Ordinary Shares will be unchanged. Under 
the New Articles, the Company's records and accounts will be kept on the 
basis that the assets and liabilities of the Ordinary Share Pool can be 
separately identified from those of the B Share Pool. 
 
   7.         Benefits of the Offer 
 
   The Board believes that the launch of the Offer will benefit existing 
Shareholders as follows: 
 
   --           spreading the fixed annual running costs of the Company 
over a larger capital base; 
 
   --           providing the opportunity to invest in a generalist VCT 
qualifying pool with ongoing oversight from two of the existing 
Directors, allowing existing Shareholders to benefit from 30% income tax 
relief and tax-free distributions; 
 
   --           offering existing Shareholders (and new Investors) a share 
class with a different investment focus and with a new Investment 
Manager; 
 
   --           reducing the effective cost cap (which currently excludes 
Directors' fees) for existing Shareholders; 
 
   --           potentially enabling some cash retained for working capital 
to be released in the form of a small special additional dividend to 
existing Shareholders*; 
 
   --           offering existing Shareholders (and shareholders in the 3 
other VCTs that have OTM as Investment Adviser) a loyalty incentive 
discount on the Offer price; 
 
   --           allowing the Company to co-invest alongside other funds 

managed by Chelverton in attractive investment opportunities; and 
 
   --           all the costs of the proposed Offer will be paid for by 
Chelverton. 
 
   *   this is not a profit forecast; there can be no guarantee that any 
additional special dividend would be paid or of its amount but the Board 
will look at this in detail following the closing of the Offer 
 
   The making of the Offer and raising of funds into the new B Share class 
will necessarily extend the life of the Company since the Company will 
need to continue and Investors will need to retain their shareholdings 
for at least another five years after the last allotment of B Shares 
under the Offer so that the B Shareholders can preserve any initial 
income tax relief they may receive on their subscription for B Shares. 
The extension of the life of the Company will also benefit any Ordinary 
Shareholders who took advantage of capital gains tax deferral when they 
subscribed for their Ordinary Shares.  Once B Shares have been issued, 
Ordinary Shareholders will no longer have an annual continuation vote 
and the next continuation vote will be in 2025. 
 
   8.         Timing of the Offer 
 
   It is intended that, subject to the passing of the Resolutions and FCA 
approval of the Prospectus, the Company will launch the Offer in late 
November to early December 2018. 
 
   Full details of the Offer will be set out in the Prospectus, and 
Shareholders interested in investing in the Offer should read the 
Prospectus in full once it is published.  An announcement will be made 
when the Prospectus is published.  Any decision to participate in the 
Offer should be made solely by reference to the information and the 
terms and conditions contained in that Prospectus. 
 
   It is proposed that a first allotment of B Shares will take place on or 
before 4 April 2019. Subject to the terms and conditions of the Offer, 
it is the intention that Shareholders will have the option to apply for 
B Shares under the Offer in one or both of tax years 2018/19 and 
2019/20. 
 
   9.         General Meeting 
 
   The General Meeting has been convened for 11.00 a.m. on 19 November 2018 
at Magdalen Centre, Oxford Science Park, Oxford OX4 4GA. At the General 
Meeting, Resolutions 2 and 5 will be proposed as ordinary resolutions, 
requiring the approval of more than 50% of the votes cast. Resolutions 
1, 3, 4, 6 and 7 will be proposed as special resolutions, requiring the 
approval of not less than 75% of the votes cast. 
 
   The Resolutions set out in the Notice are summarised below: 
 
   Resolution 1 - Adopt the New Articles of the Company (special 
resolution) 
 
   Resolution 1 will, if passed, adopt the New Articles in substitution for 
the current Articles.  The New Articles are in a form which is 
appropriate for a premium listed Main Market traded VCT and in 
conformity with the Companies Act 2006.  The New Articles also include 
the rights attaching to the B Shares.  A summary of the key differences 
between the current Articles of the Company and the New Articles which, 
in the opinion of the Directors, are relevant for Shareholders, is set 
out in Part III to the Circular. 
 
   A copy of the proposed New Articles is available for inspection from the 
date of this Circular at the registered office of the Company and for at 
least 15 minutes prior to and during the General Meeting at the place of 
the General Meeting, Magdalen Centre, Oxford Science Park, Oxford OX4 
4GA.  A copy is also available on the OTM website 
(http://www.oxfordtechnology.com). 
 
   Resolution 2 - Authority for the Board to allot shares (ordinary 
resolution) 
 
   Resolution 2 will, if passed and conditional on the passing of 
Resolution 1 above, give the Board authority with immediate effect to 
allot shares up to an aggregate nominal amount of GBP120,000 
representing, in aggregate, approximately 22.5% of the issued share 
capital of the Company as at the date of the Circular. This authority 
will expire on the later of 15 months after the date this resolution is 
passed and the end of the Company's next annual general meeting. The 
Directors intend to allot up to 5,000,000 B Shares of 1p each under the 
Offer plus up to an additional 5,000,000 under the over-allotment 
facility, and are also seeking approval to allot up to an additional 20% 
outside the Offer, being up to a further 2,000,000 B Shares. The 
Directors have no current intention of allotting further B Shares 
outside the Offer and do not intend to make any further allotments of 
Ordinary Shares. 
 
   Resolution 3 - Disapply statutory pre-emption rights (special 
resolution) 
 
   Resolution 3 will, if passed, disapply the statutory pre-emption rights 
contained in section 561 of the Act to enable the Directors to allot 
equity securities for cash pursuant to the authority given under 
Resolution 2 above.  This authority will expire on the later of 15 
months after the date this resolution is passed and the end of the 
Company's next annual general meeting. The authority conferred by this 
resolution will be limited to: 
 
   (i) the allotment of B Shares in connection with the Offer; and 
 
   (ii) otherwise than as set out in (i) above, an aggregate nominal amount 
of 20 per cent. of the issued ordinary share capital of the Company 
immediately following closing of the Offer. 
 
   Resolution 4 - Cancellation of share premium account (special 
resolution) 
 
   Resolution 4 will, if passed and subject to the sanction of the Court 
and conditional on the issue of B Shares by the Company pursuant to the 
Offer, cancel all amounts standing to the credit of the share premium 
account. The Act places restrictions on distributions by a public 
limited company which can only make a distribution to the extent that 
the amount of its net assets is not less than the aggregate of its 
called up share capital and undistributable reserves.  The share premium 
account is an undistributable reserve.  Currently the Company has 
GBP376,000 in its share premium account relating to past issues of 
Ordinary Shares and, as a result of the B Shares being issued under the 
Offer, additional share premium will be created. 
 
   The additional new reserve created by the cancellation of the share 
premium account will allow the Company to create a special reserve that 
can be used to pay dividends, assist in writing off losses or finance 
market purchases of the Company's Shares. The opportunity to cancel the 
share premium account at this stage is being taken in order to save the 
costs of convening a further general meeting following the closing of 
the Offer. In addition, the reserve created by the cancellation may also 
be used by the Company to purchase shares in the capital of the Company, 
whether in the market or by a tender offer, although the Company has no 
current intention of doing so. 
 
   Resolution 5 -- Adoption of investment policy for the B Share Pool 
(ordinary resolution) 
 
   Resolution 5, if passed, will adopt the Company's investment policy in 
respect of the B Shares. Resolution 5 is conditional on the passing of 
Resolutions 1, 2 and 3 and on Admission. 
 
   Resolution 6 -- Cancellation of capital redemption reserve (special 
resolution) 
 
   Resolution 6 will, if passed and subject to the sanction of the Court 
and conditional on the issue of B Shares by the Company pursuant to the 
Offer, cancel all amounts standing to the credit of the capital 
redemption of the Company.  The capital redemption reserve was created 
on the repurchase of the Company's Ordinary Shares under the tender 
offer in 2017. 
 
   The cancellation of this reserve, like the cancellation of share premium 
account, will create further distributable reserves to assist in the 
payment of dividends or to assist in the return of funds to 
Shareholders. 
 
   Resolution 7 -- Authorise the Company to make market purchases of B 
Shares (special resolution) 
 
   Resolution 7 will, if passed, permit the Company to make market 
purchases of its own B Shares at the Directors' discretion. 
 
   The Directors will only use this authority in circumstances where a 
holder of B Shares has died.  This authority does not authorise or 
permit the Company to make market purchases of Ordinary Shares. 
 
   10.       Action to be taken 
 
   Included with the Circular is a Form of Proxy for use at the General 
Meeting. Whether or not Shareholders propose to attend, they are 
requested to complete and return the Form of Proxy, by post or hand, to 
Neville Registrars, Neville House, Steelpark Road, Halesowen B62 8HD, so 
as to be received as soon as possible, in each case to arrive not later 
than 48 hours before the time of the meeting. Completion and return of a 
Form of Proxy will not affect a Shareholder's right to attend and vote 
at the General Meeting should he or she wish to do so. 
 
   11.       Recommendation 
 
   The Board considers that the Proposals relating to the Company are in 
the best interests of the Company and its Shareholders as a whole and 
the Board unanimously recommends that Shareholders vote in favour of the 
Resolutions to be proposed at the General Meeting, as the Directors 
intend to do in respect of their own beneficial holdings of 58,033 
Ordinary Shares (representing approximately 1.09% of the issued share 
capital as at 19 October 2018, being the latest practicable date prior 
to publication of this announcement). 
 
   This announcement contains inside information for the purposes of 
Article 7 of EU Regulation 596/2014. 
 
   Enquiries:  Richard Roth, Oxford Technology 2 Venture Capital Trust Plc; 
[e-mail] 
 
   Investment Policy for B Shares 
 
   Subject to Shareholders' approval of Resolution 5 to adopt the 
investment policy, the investment policy of the Company in respect of 
the B Shares shall be as follows: 
 
   Investment Objectives and Policy 
 
   The investment objective of the Company for the B Shares is to provide 
private investors with attractive returns from a portfolio of 
investments in unquoted companies including existing AIM and NEX 

Exchange Growth Market (NEX) quoted companies in the United Kingdom.  It 
is the intention to maximise tax-free income available to Investors from 
a combination of dividends and interest received on investments and the 
distribution of capital gains arising from sale of assets. 
 
   By virtue of the legislative framework governing the Company, the 
Company's investment policy for the B Shares has been designed to be 
aligned with the need to comply with VCT legislation which is key to the 
proposition being offered to Investors. 
 
   The Company will target investments in UK unquoted companies through a 
range of securities including, but not limited to, ordinary and 
preference shares, loan stock, convertible securities and fixed interest 
securities. Unquoted investments are likely to be structured as a 
combination of ordinary shares and loan stock. The Company may also 
invest in stocks that are traded on the London Stock Exchange (including 
AIM) and on NEX; such stocks may include ordinary shares, preference 
shares and/or loan stock.  As well as quoted securities, the Company may 
hold investments in permitted funds, including interest bearing money 
market open-ended investments companies in addition to cash on deposit. 
 
   Qualifying Investments 
 
   Compliance with the VCT rules and regulations is to be considered in 
respect of all investment decisions made.  While it is recognised that 
venture capital investments carry a significant risk of capital loss, 
the Company will aim to ameliorate that risk as far as possible by 
targeting investee companies that are carrying out a qualifying trade 
and have assets. 
 
   Non-Qualifying Investments 
 
   Funds not yet employed in Qualifying Investments will be managed in 
accordance with VCT Rules for non-qualifying investments with the 
intention of ensuring the Company has sufficient liquidity to invest in 
Qualifying Investments as and when opportunities arise. The 
non-qualifying portfolio will comprise units or shares in UCITS or AIFs 
(in each case redeemable on not more than 7 days' notice), or short term 
cash deposits or shares or securities acquired on a recognised 
investment exchange (within the meaning of Part XVIII FSMA). 
 
   Risk Diversification 
 
   The Directors will control the overall risk of the Company. Chelverton, 
as Investment Manager, will ensure that the B Share Pool has exposure to 
a diversified range of VCT Qualifying Investments from different sectors 
and that no more than 15% of the Company's assets are invested in any 
one company, measured at the time of investment. 
 
   Borrowing Policy 
 
   There will be no set limit or restriction on the Company's borrowing. 
However, it is not the Company's intention to have any borrowings of 
more than 20% of gross assets at the time any such borrowing is 
undertaken. 
 
   Changes to the Investment Policy for the B Shares 
 
   Any material change to the investment policy of the Company for the B 
Shares will require the approval of Shareholders pursuant to the Listing 
Rules. 
 
   Appendix 
 
   Definitions 
 
   The following defined terms apply throughout this announcement and are 
extracted from the Circular, unless the context requires otherwise: 
 
 
 
 
 
     the Act                     Companies Act 2006 (as amended) 
     Admission                   admission of the B Shares to the 
                                  premium segment of the Official 
                                  List and to trading on the London 
                                  Stock Exchange's main market for 
                                  listed securities 
     AIM                         Alternative Investment Market 
                                  of London Stock Exchange plc 
     current Articles            the current articles of association 
                                  of the Company adopted on 2 March 
                                  2000 
     B Shareholders              holders of B Shares 
     B Shares                    B ordinary shares of 1 pence each 
                                  in the capital of the Company 
     B Share Pool                assets and liabilities of the 
                                  Company attributable to the B 
                                  Shares 
     Chelverton                  Chelverton Asset Management Limited 
     Circular                    the circular letter dated 22 October 
                                  2018 to the Shareholders of the 
                                  Company 
     Company                     Oxford Technology 2 Venture Capital 
                                  Trust Plc (registered number 3928569) 
     Directors or Board          the directors of the Company and, 
                                  collectively, the Board 
     DTR                         the Disclosure Guidance and Transparency 
                                  Rules published by the FCA pursuant 
                                  to Part VI of FSMA 
     FCA                         Financial Conduct Authority, acting 
                                  in its capacity as the competent 
                                  authority for the purposes of 
                                  Part VI of FSMA 
     Form of Proxy               form of proxy for use in connection 
                                  with the General Meeting 
     FSMA                        the Financial Services and Markets 
                                  Act 2000 (as amended) 
     General Meeting             the general meeting of the Company 
                                  to be held on 19 November 2018 
     Investment Manager          Chelverton, conditionally on Admission 
     Investor                    an individual aged 18 or over 
                                  who is resident in the United 
                                  Kingdom and who subscribes for 
                                  B Shares under the terms of the 
                                  Offer 
     ISCA                        ISCA Administration Services Limited 
     ITA                         Income Tax Act 2007 (as amended) 
     Listing Rules               Listing Rules published by the 
                                  FCA pursuant to Part VI of FSMA 
     Main Market                 the Main Market for listed securities 
                                  of London Stock Exchange plc 
     NAV or Net Asset            the aggregate of the gross assets 
      Value                       of the Company less its gross 
                                  liabilities 
     Net Assets                  gross assets less all liabilities 
                                  (excluding contingent liabilities) 
                                  of the Company 
     New Articles                the form of articles of association 
                                  of the Company to be adopted pursuant 
                                  to a special resolution to be 
                                  passed at the General Meeting 
     Notice                      the notice of the General Meeting 
                                  set out at the end of the Circular 
     Offer                       the proposed public offer for 
                                  subscription of B Shares in respect 
                                  of the 2018/19 and 2019/20 tax 
                                  years on the terms to be set out 
                                  in the Prospectus which it is 
                                  proposed will offer prospective 
                                  Investors the opportunity to subscribe 
                                  for up to 5,000,000 B Shares (with 
                                  an over-allotment facility for 
                                  up an additional 5,000,000 B Shares) 
     Official List               Official List of the FCA 
     OTM or Investment           Oxford Technology Management Limited, 
      Adviser                     the investment adviser to the 
                                  Company and the investment adviser 
                                  in relation to the Ordinary Share 
                                  Pool following Admission 
     OT2 Managers                OT2 Managers Limited, the Company's 
                                  wholly-owned subsidiary, which 
                                  provides investment management 
                                  services to the Company 
     Ordinary Shareholders       holders of Ordinary Shares 
     Ordinary Share Pool         assets and liabilities of the 
                                  Company attributable to the Ordinary 
                                  Shares 
     Ordinary Shares             existing ordinary shares of 10p 
                                  each in the capital of the Company 
                                  (ISIN: GB0003105052) 
     Proposals                   all of the proposals described 
                                  in the Circular, including the 
                                  proposed resolutions relating 
                                  to: (i) the adoption of the New 
                                  Articles, (ii) the authority to 
                                  allot B Shares, (iii) the authority 
                                  to issue such shares on a non-pre-emptive 
                                  basis, (iv) the cancellation of 
                                  the Company's share premium account 
                                  (both existing and that which 
                                  is to be created upon the issue 
                                  of B Shares) (v) adoption of the 
                                  Company's investment policy in 
                                  respect of B Shares, (vi) the 
                                  cancellation of the Company's 
                                  capital redemption reserve, and 
                                  (vii) authority to make market 

                                  purchases of B Shares. 
     Prospectus                  the prospectus proposed to be 
                                  issued by the Company in respect 
                                  of the Offer in accordance with 
                                  Section 84 of FSMA in late November 
                                  to early December 2018 
     Qualifying Investment       investment in an unquoted trading 
                                  company, which comprises a qualifying 
                                  holding for a VCT as defined in 
                                  Chapter 4, Part 6, of the ITA 
     Resolutions                 the ordinary and special resolutions 
                                  set out in the Notice 
     Shareholders                holders of Shares in the Company 
     Shares                      shares in the capital of the Company 
     VCT                         a company which is approved as 
                                  a venture capital trust by Her 
                                  Majesty's Revenue and Customs 
                                  pursuant to section 274 ITA 
     VCT Regulations             Venture Capital Trust (Winding 
                                  Up and Merger) (Tax) Regulations 
                                  2004 SI 2004/2199 as amended from 
                                  time to time 
     VCT Rules                   Part 6 ITA and every other statute 
                                  (including any orders, regulations 
                                  or other subordinate legislation 
                                  made under them) for the time 
                                  being in force concerning VCTs, 
                                  as amended from time to time 
 
 
 
 
 

(END) Dow Jones Newswires

October 22, 2018 02:00 ET (06:00 GMT)

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