Mobeus VCTs: Empowering Growth and Innovation in the UK’s Venture Capital Landscape
The story of Mobeus VCTs is one of consistency, innovation, and long-term value creation within the UK’s venture capital sector. Known for supporting the growth of ambitious small and medium-sized enterprises (SMEs), Mobeus VCTs have established themselves as a benchmark in effective, tax-efficient investing. Originally launched and managed by Mobeus Equity Partners, these trusts have helped bridge the funding gap for private UK businesses, fostering innovation, employment, and sustainable development.
Following their transition to Gresham House plc in 2021, the Mobeus VCTs have continued to thrive under new management while retaining their original philosophy and proven investment approach. Their legacy continues through two primary trusts: Gresham House Income & Growth VCT and Gresham House Income & Growth 2 VCT, which today represent a modern, streamlined evolution of the Mobeus brand.
What Are Venture Capital Trusts (VCTs)?
Venture Capital Trusts (VCTs) were introduced by the UK government in 1995 to encourage private investment in early-stage and high-growth businesses. They act as investment vehicles that raise funds from individual investors and channel that capital into smaller, unlisted companies that often face challenges securing financing through traditional routes.
The purpose of a VCT is twofold:
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To support innovation and job creation by providing funding to promising startups and SMEs.
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To reward investors with tax incentives for taking on higher investment risks.
VCT investors typically enjoy several key tax benefits, including:
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Up to 30% income tax relief on the amount invested (subject to a minimum holding period).
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Tax-free dividends, meaning regular income distributions are not subject to income tax.
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Capital gains tax exemption on profits earned from selling VCT shares after the required holding period.
This structure has made VCTs an attractive proposition for UK taxpayers looking to diversify their portfolios while supporting domestic entrepreneurship.
The Origins and Evolution of Mobeus VCTs
Mobeus Equity Partners was founded with a clear mission — to help promising UK businesses scale sustainably. The firm launched a series of VCTs, including the Mobeus Income & Growth VCTs, which collectively managed hundreds of millions of pounds. These trusts were designed to provide investors with a combination of regular income and long-term capital appreciation.
Mobeus stood out for its balanced investment philosophy, combining prudent risk management with a keen eye for growth potential. Unlike purely speculative early-stage funds, Mobeus VCTs often invested in companies that had already demonstrated commercial traction but needed additional capital to expand operations, enter new markets, or develop new products.
The Transition to Gresham House
In 2021, Gresham House plc, a specialist asset management group, acquired the Mobeus VCT business. This acquisition marked a major milestone, bringing the Mobeus trusts into a larger and more diversified investment platform.
Importantly, the transition did not disrupt the underlying investment philosophy or management continuity. The same experienced investment team continued to oversee the portfolio, ensuring that investors benefited from consistency and expertise.
By 2024, the Mobeus VCTs underwent structural consolidation to improve efficiency — merging four trusts into two. The rebranded Gresham House Income & Growth VCT and Gresham House Income & Growth 2 VCT now carry forward the Mobeus legacy, backed by Gresham House’s wider institutional strength and resources.
Investment Strategy and Portfolio Composition
Mobeus VCTs follow a generalist investment strategy, targeting small and medium-sized private companies across a variety of sectors. However, there is a noticeable tilt toward technology-enabled, service-oriented, and knowledge-based industries — reflecting the evolving nature of the UK economy.
The trusts typically invest in companies that display:
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Strong, experienced leadership teams.
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Scalable and sustainable business models.
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Competitive advantages or proprietary intellectual property.
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Clear pathways to value creation and exit opportunities (e.g., trade sales or IPOs).
While the portfolio is diversified across sectors, it remains relatively concentrated in terms of holdings. The top-performing investments often represent a significant share of total net asset value (NAV). This focused approach allows the management team to closely monitor and support each business, ensuring strategic alignment and maximizing growth potential.
Performance and Track Record
Over the years, Mobeus VCTs have demonstrated a strong performance record, delivering steady returns and consistent dividend distributions. Combined net assets currently stand at approximately £338 million, and the trusts have reported average five-year NAV total returns in the mid-50% range, depending on the specific period and trust.
Successful exits have been a hallmark of the Mobeus strategy. Notable examples include the sale of companies such as Master Removers Group and Preservica, which yielded impressive returns and reinforced investor confidence.
Even during volatile economic periods, Mobeus VCTs have maintained resilience through disciplined portfolio management, robust due diligence, and a conservative approach to valuations. The trusts aim for an annual dividend target of around 7% of NAV, though this figure may vary depending on market conditions and realized gains.
Strengths and Advantages
1. Proven Management Expertise
The long-serving investment team has decades of collective experience in private equity and venture capital, ensuring disciplined decision-making and effective oversight.
2. Consistent Dividend Record
Mobeus VCTs have established a tradition of paying regular, tax-free dividends — appealing to investors seeking both income and growth.
3. Diversification and Sector Reach
Investments span multiple industries including technology, healthcare, education, business services, and consumer goods, helping mitigate sector-specific risks.
4. Attractive Tax Incentives
Investors benefit from a combination of income tax relief, tax-free dividend income, and capital gains exemption — key motivators for long-term participation.
5. Institutional Support and Stability
Integration into Gresham House adds operational depth, ESG focus, and greater institutional backing, enhancing investor confidence and governance standards.
Risks and Considerations
While the rewards can be substantial, Mobeus VCTs are not without risks:
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Illiquidity: Shares in VCTs are not easily tradable, and investors must be prepared for a long-term holding period.
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Valuation Risk: The portfolio consists of unquoted companies whose valuations can fluctuate based on market sentiment and performance.
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Concentration Risk: A few key holdings often represent a large percentage of total assets, which can magnify the impact of underperformance.
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Regulatory Risk: Future changes to VCT tax reliefs or qualifying investment rules could affect investor benefits.
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Economic Conditions: Broader macroeconomic factors such as inflation, interest rates, or supply chain issues can impact portfolio companies and exit opportunities.
The Current Landscape and Future Outlook
Today, the restructured Mobeus (now Gresham House) VCTs remain among the most respected and stable vehicles in the UK’s VCT market. Their portfolios are well-diversified, holding a mix of mature, income-generating businesses and promising growth-stage companies.
The management team continues to pursue a disciplined pipeline of new investments, with an increasing emphasis on technology-driven and sustainability-focused enterprises. ESG (Environmental, Social, and Governance) principles are now integrated into their investment process, aligning with modern investor expectations and regulatory standards.
Looking ahead, Mobeus VCTs are poised for continued success. Strong capital reserves, a healthy flow of deal opportunities, and a well-established management framework provide a solid foundation for future growth. Market uncertainties may present challenges, but they also open doors to acquire quality assets at attractive valuations.
Conclusion
Mobeus VCTs have carved a distinctive place in the history of UK venture capital. Their journey — from independent management under Mobeus Equity Partners to integration with Gresham House — highlights the evolution of a trusted investment model that combines entrepreneurial vision with institutional discipline.
For investors, Mobeus VCTs offer more than just tax advantages; they provide a tangible connection to the heartbeat of the UK’s innovation economy. By investing in Mobeus VCTs, individuals not only seek competitive financial returns but also play a direct role in supporting the growth of Britain’s most dynamic, high-potential businesses.
In essence, Mobeus VCTs embody the spirit of responsible, long-term investing — where opportunity meets purpose, and capital meets creativity.
