The Best and Worst: Ventures paying their way Venture capital trusts

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The Independent Online
VENTURE capital funds tend to do well as the economy climbs out of recession. The average profit on venture capital shares over the past 12 months was 22.8 per cent and over the past six months was just under 25 per cent.

The share price of Electra, the largest such trust with more than pounds 370m under management, has suffered in the recession because it concentrates on small unquoted companies in the UK and overseas. John Korwin-Szymanowski, investment trust analyst at S G Warburg Securities, said: 'Unquoted has been a dirty word in the market. People are suspicious about managers' valuations.'

He believes Electra is well-placed to benefit from the likely trend among companies to come to the market. It is also accessible to small investors, since it has a savings scheme that takes monthly contributions of pounds 25 upwards and lump sums of as little as pounds 250.

Pantheon International Participations invests in other venture funds but, with little more than pounds 20m under management, is only a fraction of Electra's size and has no savings scheme.

Greyfriars joined the market four years ago and had a series of difficulties, including the death of its fund manager in 1990. Also, it recently repaid a loan early, resulting in a drop in asset value.

The venture capital trusts in Micropal's list are conventional trusts with one class of capital, but there are also split-level venture trusts. Among these Mr Szymanowski points to Mezzanine, which invests in US companies. The price of its capital shares hasincreased by nearly 80 per cent in the last 12 months.

----------------------------------------------------------------- BEST & WORST: VENTURE CAPITAL TRUST ----------------------------------------------------------------- The best pounds 1 Pantheon International. . . . . . . . . . . . . . . .182.29 2 Murray Enterprise. . . . . . . . . . . . . . . . . . 162.17 3 Consolidated Venture. . . . . . . . . . . . . . . . .161.97 4 Govett American Endeavour. . . . . . . . . . . . . . 148.48 5 London American Ventures. . . . . . . . . . . . . . .144.74 The worst 17 Electra. . . . . . . . . . . . . . . . . . . . . . . 96.45 18 Kleinwort Development. . . . . . . . . . . . . . . . 95.33 19 East German. . . . . . . . . . . . . . . . . . . . . 85.90 20 English & Caledonian. . . . . . . . . . . . . . . . .81.85 21 Greyfriars. . . . . . . . . . . . . . . . . . . . . .58.40 The chart shows the value of pounds 100 invested over one year to 1 May, shares valued on mid-market basis, income reinvested ----------------------------------------------------------------- Source: Micropal -----------------------------------------------------------------

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