Gresham House Baronsmead and Mobeus VCTs to share all future private equity investments

Speaking to Investment Week, managing director, strategic equity at Gresham House Bevan Duncan said that investors “should not see a private equity deal done next year which is just Baronsmead or just Mobeus”.

“There is an allocation policy, which splits that new deal among those six VCTs as a set percentage,” he explained. “There is a very clear mechanical allocation policy that is going to be applied to those funds as they start investing alongside each other.”

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Gresham House acquired the four trusts from Mobeus Equity Partners last month, adding £369m in assets under management to its VCT business, which grew to £850m as a result.

However, Duncan clarified that “while there will be some common assets, it is going to take a very long time for that to be a significant part of the portfolio”.

Although the funds will now share future private equity investments and the investment teams will be merged, the manager asserted that the Baronsmead funds will remain distinct from the Mobeus offerings, not least because the former will continue to hold a public portfolio.

“The Baronsmead fund is a hybrid one, with public and private equity portfolios that deliver consistent returns for shareholders and, importantly, a consistent dividend yield, which is enabled by the diversification of assets,” Duncan said.

“The Mobeus funds are pureplay private equity. They do have some quoted holdings, but they were private equity businesses that have since floated.

“Our underlying portfolio mix will stay quite distinctive and different because the Baronsmean funds will continue to invest in AIM and the Moebus funds will not.”

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The manager added there were no plans to acquire any further trusts “at this stage”.

“We are focused on delivering business as usual for both the Baronsmead and Mobeus funds and making the integration of the two businesses a success and delivering synergies and the benefits to the boards and to the shareholders of those funds,” he explained.

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