Novation of Investment Management AgreementSource: OMX
Downing FOUR VCT plc
13 June 2022
Sale of Downing Ventures business to Foresight Group – Novation of Investment Management Agreement
Downing FOUR VCT plc (“Downing FOUR” or “the “Company”), announces that its investment manager, Downing LLP (“Downing”), has agreed to sell its non-Healthcare Ventures business to Foresight Group Holdings Limited (“Foresight”).
The Board has agreed to the novation of the Investment Management Agreement (with the exception of the management of the Healthcare share pool) from Downing to Foresight, subject to completion of the sale. The whole Downing Ventures team (excluding members of the Healthcare team) and key support staff are expected to transfer to Foresight as part of the transaction.
The management of the Healthcare share pool will be retained by Downing and continue to be managed by Downing’s expanding Healthcare team. In order to ensure a smooth handover, Downing will also continue to provide administration services, and investment management services in respect of the AIM share pool and for non-ventures portfolio investments (primarily in the planned exit share pools which are being wound down) for a transitional period.
The Board of Downing FOUR has been involved in discussions between Downing and Foresight and has consented to the transaction. Foresight is an experienced VCT manager which is listed on the Main Market of the London Stock Exchange and has a current market capitalisation of approximately £390 million and £8.7 billion of funds under management as at 31 March 2022. Foresight currently manages three VCTs with combined net assets of approximately £375 million.
The Board of Downing FOUR believes that the novation of the Investment Management Agreement to Foresight provides the Company with the benefit of the resources of a substantial fund management group, combined with the continuity provided by the Downing Ventures investment executives.
In addition, Downing and Foresight have agreed to a rebate of one quarter’s investment management fees for the transferring Ventures, AIM and planned exit share pools. Downing and Foresight have also agreed to waive their portion of the promoter’s fee for existing Downing FOUR shareholders who wish to participate in the Company’s next fundraising offer. The Board can confirm that no other material changes are being made to the terms of the investment management arrangements.
Further details will be provided in the Annual Report of Downing FOUR to be published in July.
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