GBI Magazine City Editor Neil Martin talks to Belinda Thomas, a partner at Triple Point, about the firm’s year and what they are looking forward to in 2019.
London based Triple Point is an alternative investment manager which provides innovative and compelling investment solutions built around the needs of private, institutional and public investors. They set out to match investor’s needs with the needs of growing businesses, helping public and private sector organisations, and supporting UK growth and investment.
The firm currently has £1.3bn of private, institutional and public capital under management invested across Infrastructure, Real Estate, Debt and Venture Capital.
With over 10 years of experience, they offer both tax-advantaged investments such as their Impact EIS Service, and non-tax advantaged funds, such as their LSE listed Social Housing Investment Trust.
So I began by asking Belinda to update on the firm’s year so far and what they were planning for 2019.
“In 2018, Triple Point launched two new products; an Impact EIS Service and a Venture Fund VCT, to sit alongside our IHT services. When developing these products, we drew on our experience of investing in these areas, stretching back to 2007 and 2004 respectively, whether as an equity stake or providing debt to small growing businesses.”
“Our new VCT follows a challenge led philosophy which means we work alongside corporates to find the innovative businesses that can solve their real-world problems. It is those kinds of companies that we are investing in. Today we are seeing plenty of opportunities which should be ready for investment in early 2019.”
Belinda highlights that there have been so many exciting developments taking place at Triple Point, including significant expansion. When they started in their current offices, there were about 45 staff – this has now increased to 90.
“This growth is down to our expansion in assets under management to £1.3bn, a figure which has doubled over the last 12 months through the addition of institutional funds and government mandates. This is really exciting for us as we expand our services forward. We are also looking forward to the move to a brand-new office at the beginning of 2019.”
Belinda believes that Triple Point has a very strong USP.
“It’s the individuals that make up the Triple Point team. Over the years, we have brought together a team of 90 people with a diverse, skill set spanning from credit analysis to social housing investments. We seek to bring opportunities to retail investors which were historically the preserve of banks and institutions, looking to create an attractive risk-reward profile.”
I move on to ask Belinda why the UK has such a strong start-up/entrepreneurial culture
“The UK has always aimed to be at the forefront of technological innovation. You hear a lot about Silicon Valley, but in the UK we have the M4 Corridor, the backbone of British IT and telecoms. For a country with only 0.9% of the world’s population, the UK is responsible for 16% of the most cited research output. This is driven by a cluster of world-renowned British universities, not just Oxford and Cambridge, who are focused on leading scientific and technological innovation.
“Regarding government policy, there are a number of programs that place funds to help grow innovative, small and medium-term businesses, nurturing the entrepreneurial culture, such as the VCT and EIS tax breaks.”
How does she and her fellow partners stand on the Government’s recent changes to VCTs?
“Last year, the government announced the outcome of the resulting changes to the legislation. We welcome the clarity this review provided, specifically, the announcements from the Treasury regarding the regulations around the Venture Capital Trust qualifying investments.”
Belinda does not fear that future Government changes would undermine VCT effectiveness, at least not in the immediate term.
But, if she could influence changes to VCT, what would she suggest?
“An area where VCT managers could do with some help to ensure that companies receive their funds on time is around the timeliness of the advance assurance process. HMRC is suggesting that VCT managers like ourselves should no longer need to seek advance assurance re new investments and that instead we should rely on expert advice on whether investments qualify.
“Unfortunately, the VCT rules are not clear cut and occasionally need interpretation and hence advisors are not able to offer the level of comfort that VCT Boards often require, given the risk to their investors’ tax benefits. Meanwhile, replies from HMRC to advance assurance requests from VCTs can currently take 11-12 weeks, which is too long for investee companies to wait at what is often for them already the end of a long search for funds and negotiation of investment terms.”
So how can VCT investments continue to help diversify client portfolios?
“Generalist VCTs, such as the Triple Point Venture Fund, offer investors exposure to earlier stage investing than they might otherwise have in their portfolios. Thus, portfolios can benefit from involvement in asset classes which are uncorrelated to the rest of their portfolio. Such investments will have higher risk but also higher potential returns than a typical balanced portfolio.”
I then ask more about Triple Point, starting with the sectors they specialize in and why they are important?
“Triple Point has always been sector agnostic in terms of the areas that we look at. We are an investment led organization that looks at each opportunity’s specific characteristics. With a full understanding of the opportunity, we then decide the most appropriate product for this to be funded by. Looking at our current mandates, these include investments in: venture capital, real estate, energy and infrastructure, public and private leasing, and private debt.”
Which leads to the question, are clients more savvy about VCT nowadays?
“Yes, they are. Although they have been around for many years, VCTs are increasingly entering the mainstream and advisers are talking about them more confidently. As you have seen with the reductions in the amount of funds that people can put into their pensions, particularly for higher earning individuals where it has come down dramatically to £10,000.
“For those kinds of investors, VCTs are an attractive alternative. There is still a long way to go in terms of the end investor and advisors using them more frequently. Whilst fundraising in VCT has increased dramatically in recent years and we expect this growth to continue.”
“Clients are certainly becoming more interested in VCTs and this is demonstrated by the dramatic increase in fundraising in recent years. Since 2011, annual VCT fundraising has been on an upward trajectory, totaling £542m in 2016/17, and a near record high of £728m in the 2017/18 tax year.”
So what can advisers do to continue to educate their clients about the investment opportunities in VCT?
“Advisers have two challenges that they are faced with. The first is explaining to investors the opportunities and risk reward profile of VCTs. Since the Patient Capital Review, there have been changes to what investments qualify under those rules, such as the introduction of the growth test. The second is explaining the different styles of investment from the various VCT managers, all of whom have a different take on the market; from seeking a challenge led approach, such as ours, to investing in AIM stocks, for example.”
I finish by asking a more general question, what does the industry need to do more to promote VCT to a wider investor base?
“There is more that needs to be done to increase the level knowledge and use of this government promoted tax break, especially the investment benefits beyond their tax efficiency. Within the UK economy and SMEs, in particular, there is a large funding gap. The banks have stepped out of this area and therefore you need the Venture Capital and Private Equity houses to step in to keep pushing UK businesses forward by providing fund and in turn generating attractive returns for investors.
“VCTs are a huge part of that marketplace but are only successful if they can raise the funds from underlying investors, which means you need investors to keep talking about and understanding them.”
As a Triple Point Partner, Belinda heads sales and investor relations team. She joined the firm in 2009, after eight years at Schroders Private Bank where she was a Client Director,
to manage relationships with intermediaries, professional advisers and existing investors. She has worked within the financial services sector for over 20 years. She graduated from the University of Newcastle and qualified as an Accountant at PwC. She is a chartered wealth manager and a chartered fellow of the CISI.