The price of volatility: Best and worst: Venture capital investment trusts

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The Independent Online
TAX incentives promised in the Budget for venture capital investment trusts will give a boost to a sector that holds shares in a diverse array of companies, ranging from the likes of Christian Dior to the US technology company Metricom.

The Worth investment trust, invested in French and UK luxury goods companies and now managed by Abtrust, languishes at the bottom of the three-year performance table, showing a loss to investors of 45 per cent.

Martin Gilbert, chief executive of Abtrust, which took over the fund 18 months ago, said: 'The effect of the recession on this sector has been catastrophic.' The fund's portfolio of shares includes Hermes and Christian Dior.

Another trust showing poor performance over three years is Sumit, managed by Sumit Equity Ventures. The fund has a portfolio of about 12 shares, and pounds 100 invested three years ago would now be worth pounds 114.

But its performance when measured over one year reflects the volatility of this market, because Sumit then is the top performer in the sector of 19 trusts - pounds 100 invested a year ago would have trebled by now.

The reason for the poor investment return over the longer period is that two of the companies in which the fund was invested have failed, and one has been sold for a nominal sum.

At the top of the performance table, showing a rise of 227 per cent, is the Manakin investment trust run by Abingworth Management. The fund is being wound up, and the portfolio of holdings has been whittled down gradually from 70 or 80 companies to 26. According to Anthony Montagu, chairman of the company, it holds shares in UK and US technology companies which have begun to bear fruit.

Another good performer has been the Pantheon International fund run by Pantheon Ventures. This fund invests in other venture capital investment trusts through links with offices in San Francisco and Hong Kong.

Rhoddy Swire, group managing director, said that 65 per cent of the fund was in the US and that many of the companies in which it had invested had gone on to become quoted companies.

---------------------------------------------------------------------- VENTURE AND DEVELOPMENT TRUSTS ---------------------------------------------------------------------- The best pounds 1 Manakin Holdings 327.05 2 Pantheon International 270.35 3 Foreign & Colonial Ventures 223.93 4 London American Growth 201.20 5 Group Development 194.04 The worst 15 English & Caledonian 105.90 16 Greyfriars 101.62 17 Ivory & Sime 100.59 18 Radiotrust 76.47 19 Worth 55.21 ---------------------------------------------------------------------- Chart shows the value of pounds 100 invested three years ago on a mid-market share price basis, with net income reinvested. Source: Micropal ----------------------------------------------------------------------