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CREATING VALUE 03/ Maven exits Crawford Scientific for 4.7x total return 04/ VCT investment in Contego 08/ New VCT Top-up Offers 11/ hedgehog lab set to increase its global footprint 12/ Feature: VCT investment finally joins the digital age Issue 17 Welcome to Issue 17 of Creating Value. On behalf of the team at Maven, I'd like to wish all of our client investors a healthy and prosperous year ahead. 2017 saw a significant period of growth for Maven. During the year we added five new regional offices around the UK and a number of valuable new colleagues joined our investment and support team. As many of our investors will be aware, we are firm believers in the merits of having a regional business, taking the view that in order to get access to some of brightest companies outside of London and the South-East it is important to have local people on the ground across the whole of the UK, developing relationships with local businesses and the intermediaries who advise them. Since I last wrote there have been several notable realisations. These exits included the sale of Crawford Scientific and SPS, which achieved respective MoM (multiple of money) returns of 4.7x cost and 3x cost over the life of the investment, on sums invested in 2014. Crawford is based in Strathaven, near Glasgow, and SPS is located in Blackpool, lending further credence to the attraction of investing across the regions and finding value in markets which may have a lower competitive presence. The funds realised from these sales will allow us to continue to expand the Maven VCT portfolios and support a progressive dividend programme for investors. There was also significant progress in portfolio construction during 2017. Our regional teams completed eight new investments for the Maven VCTs across a wide range of sectors. We are targeting in the main those businesses which can already demonstrate measurable revenue traction, and crucially, are seeking to support proven executives with a track record of delivering results or shareholder value in a previous business or role. Being able to support 'second time entrepreneurs' is a core attraction for our team when evaluating a new investment. In the budget which was held last November some changes to the VCT scheme were announced, although pleasingly there was no change to the product fundamentals, including 30% income tax relief when subscribing for new shares, and tax free dividends. We were particularly encouraged to note that the timescale to approve new transactions with HMRC under the Advance Assurance process is going to be shortened significantly, which is welcome news for all VCT managers. A number of transactions have historically been lost due to slow response times and this is an important step forward in improving the conversion rate of potential new VCT investments. At the time of writing the offers for Maven VCT 3 and VCT 4 for the tax year 17/18 and 18/19 remain open, and just over 15 million has been raised from around 900 investors. These new offers will enable each of those VCTs to expand in size, and take advantage of the strong pipeline of new transactions in process across our UK network. In tandem with an improved Advance Assurance process, we are optimistic that those prevailing factors will allow us to make further significant progress in building our VCT portfolios during 2018. I hope you enjoy this issue of Creating Value. Bill Nixon Managing Partner at Maven FOREWORD 02 mavencp.com A POSITIVE RESULT Maven generates a 4.7x total return for investors on the sale of Crawford Scientific to Limerston Capital Partners. VCT Realisation 03 mavencp.com "It was obvious during our very first meeting that Crawford had something special in terms of its technical know-how, customer service and strong culture and it has been a real pleasure working with this talented and dynamic management team over the past three years. This investment has of course also been a huge success for Maven, delivering a 4.7x money multiple return and 70% IRR for our clients." David Milroy Investment Director, Maven Maven has exited its investment in Crawford Scientific, a leading supplier of chromatography products and analytical services to the laboratory research and testing sectors, following its sale to Limerston Capital Partners. The sale realised a return for Maven clients of 4.7x the initial investment in just over three years, with an IRR of 70%. Maven's Edinburgh-based team of David Milroy and Alan Robertson led both the investment and exit from Crawford. Since investing in August 2014, Maven has worked collaboratively with the business to execute a number of strategic initiatives, including the acquisition of Hall Analytical Laboratories which Maven's clients also funded. Following the acquisition, Crawford was able to increase its global reach by entering new markets in the US, China and Europe, leveraging Hall's reputation for pharmaceutical, agrochemical, and environmental analysis and more recently e-cigarette testing. During the past three years Crawford's turnover and headcount have doubled and profitability has almost trebled, as a result of both the successful acquisition of Hall and the robust organic growth achieved across its distribution and knowledge transfer divisions. The investment by Limerston will enable Crawford to enter its next phase of expansion and capitalise on the continued trend towards outsourced analytical services in chromatography, most notably within the pharmaceuticals industry. The business will continue to be led by the senior management team of Sam Crawford, Scott Fletcher and Anthony Taylor, together with the support of the Limerston operating partner team. 04 mavencp.com BLACKPOOL ROCK Maven makes successful exit after US giant acquires Blackpool-based SPS, delivering a 3x return for investors. VCT Realisation "Maven believed in our vision for the business and has been a hugely supportive financial partner and adviser. Ryan Bevington and the wider Maven team played an important role in helping transform SPS through a combination of small acquisitions, international growth and operational efficiencies, and we are very pleased to have worked so effectively with them over the past few years." Phil Morgan CEO, SPS Maven has made a profitable exit from SPS (EU) Holdings Limited (SPS), delivering a 3x return on funds invested in 2014. SPS is the UK's largest provider of promotional merchandise, supplying over 2,000 independent distributors in the UK and Europe, and employs over 300 staff. The Company operates out of a 90,000 ft2 site in Blackpool with manufacturing and storage facilities. The company has a strong focus on new product development and innovative product sourcing, establishing key relationships with influential brands such as Moleskine and Parker. Maven led the management buy-out of SPS from 4imprint Group plc in February 2014 to support its strategy of growing the business organically and by acquisition. Following Maven's investment SPS achieved impressive growth, through a commitment to innovation, operational excellence and new product development. Maven also supported the SPS management team in identifying and completing two synergistic bolt-on acquisitions, High Profile in June 2015 and T.E.C. in November 2015, which consolidated the enlarged business as the UK market leader in the promotional products industry. SPS has been acquired by Polyconcept Group (PFC), a US multi-national backed by Charlesbank Capital Partners, a North American mid-market private equity firm. PFC is the largest promotional products supplier globally, selling into over 100 countries. ESTABLISHING AN IDENTITY Funding package will enable Contego to drive growth by expanding product development, adding commercial resources and entering new markets. New VCT Investment 05 mavencp.com "Contego has a strong business model and has already proven its reputation for developing market leading products and solutions, as well as its ability to successfully grow its presence in new markets. We have every confidence that the highly experienced management team, led by Adrian Black, will be able to deliver the growth that our investors have come to expect from Maven." Dr Melanie Goward Investment Director, Maven In July Maven led a 3.5 million investment in Contego Fraud Solutions, to support the continued growth of the business through new product and market development. Contego provides automated compliance solutions across a wide range of industries including property, banking, financial services and the public sector. It enables organisations to gain a full understanding of their customers and employees by automating onboarding, monitoring and data enrichment processes, including providing complex, real-time compliance and fraud checks. Contego's comprehensive software platform enables customers to improve the operational efficiency of their compliance processes, and minimise operational costs, helping to reduce risk when dealing with people, companies and identity documents. Clients can make timely and informed decisions on who they do business with, all contained within a secure environment to ensure an efficient onboarding process. Contego performs a wide range of screening, verification and vetting assessments including: Know Your Customer (KYC); Anti Money Laundering (AML); Right to Work checks; Right to Rent checks and Counter-Party Risk Management. The breadth and depth of the procedures available through this platform, and able to be applied across multiple data sources, gives Contego a competitive advantage, especially where clients have significant compliance and regulatory requirements. The company operates in an attractive niche of the Regulatory Technology market which is estimated to be worth $2 billion globally and is expected to grow at over 14% per annum. Demand is being driven by additional regulation that is creating increased complexity and operational costs for businesses, as well as significantly raising the risk of financial penalties and reputational damage. 06 mavencp.com MOVING ON UP Funding will support the construction of a dedicated pharmaceutical manufacturing facility in North Wales, creating 50 new scientific jobs. New VCT Investment "ADC Bio is one of the pioneers in the manufacturing of oncology therapeutics. We are delighted to be leading the consortium of investors to fund the company's new innovative clinical facility in Wales, as well as creating highly skilled new jobs in the area. This is a hugely exciting time for ADC Bio given the growing global demand for anti-cancer drugs and we have every confidence that the company will benefit from the cost efficiencies of its Lock-Release technology." Dr Melanie Goward Investment Director, Maven In September Maven led an investment in ADC Biotechnology to help fund the development of an 8 million pharmaceutical manufacturing facility at a site in Deeside, North Wales, creating 50 skilled scientific jobs. ADC Bio operates in the highest growth sector within oncology therapeutics and has developed a unique patented Lock-Release technology for the development and manufacture of the Antibody Drug Conjugates (ADC) group of cancer therapies. Known as 'magic bullets', and designed to specifically target and kill tumour cells, ADCs are the next generation of anti-cancer drugs which combine the unique targeting capabilities of anti-bodies with the cancer-killing ability of cytotoxic drugs. The Lock-Release technology facilitates greater production efficiencies and a substantial reduction in the capital cost of manufacturing these drugs for commercial sale. The move into clinical and commercial manufacturing is highly strategic and will enable ADC Bio to convert its already strong customer base, which includes large pharmaceutical companies, to higher value clinical development work. Demand across the global market for ADC clinical trial materials is out-stripping supply with the business increasingly being asked to supply large quantities of ADCs for use in trials. As a result, ADC Bio anticipates strong demand for the manufacturing facilities from pharmaceutical companies in the US and Europe keen to take advantage of the production efficiencies the Lock-Release technology offers. The management team, led by CEO Charlie Johnson, have extensive combined industry experience and are among the global leaders in this specialist field, having already successfully established a clinical drug manufacturing facility in Scotland. MAPPING A NEW COURSE VCT Investment will enable Cognitive to develop its pipeline of third generation petroleum geoscience software modules New VCT Investment 07 mavencp.com "As geologists and technologists ourselves, our mission is to take advantage of modern software architectures to improve the efficiency of our global peers by equipping them with the best software possible for the complex tasks they face daily. This investment round will provide us the capital to scale our Edinburgh headquarters and position ourselves as innovators of third- generation software solutions for the energy services sector." Luke Johnson CEO, Cognitive Geology In October Maven and specialist early-stage investor Enso Ventures invested 2 million in Cognitive Geology, to support the continued growth of the business. The funding will enable Cognitive to develop its suite of advanced petroleum geoscience software modules, which are designed to help geologists find, appraise and develop conventional and unconventional oil & gas reserves, both onshore and offshore. The geoscience software market is worth an annual estimated $4.5 billion, and is expected to double in size in the next few years, as out-dated software architectures are replaced by next generation technology. With rising costs, falling exploration success rates, and a low oil price, there is significant market demand for innovative software solutions. Founded in 2014 by Geologist Luke Johnson, Edinburgh-based Cognitive recently launched 'Hutton', its first advanced geological data analysis tool. Petroleum geologists analysing the subsurface have to deal with significant uncertainty as they map an oil reservoir, plan drilling and production, and ultimately look to maximise oil recovery. That translates into significant uncertainty in terms of committing investment to a project. Hutton plugs into the major software platforms used throughout the oil and gas industry, including Petrel and JewelSuite, by extracting progressive trends from complex geological datasets to enable geologists to make more informed decisions throughout the life cycle of a reservoir. The funding from Maven will also allow the company to accelerate the roll out of Hutton, which uses patented Trendware technology to emulate the behaviour of an experienced geologist. Its ability to rapidly build multiple reservoir scenarios and provide users with superior visualisation capability is a significant advancement on existing solutions which are based on legacy software. 08 mavencp.com 30M VCT TOP-UP OFFERS OPEN FOR INVESTMENT Maven VCT 3 and VCT 4 are established VCTs which have achieved increases in NAV Total Return per share for eight consecutive years, and together have paid 16 tax-free dividends since April 2015. Each VCT portfolio features a blend of profitable, established companies alongside dynamic younger businesses which are challenging traditional routes to market in their sectors. VCTs continue to offer an attractive growth funding option for British businesses and Maven remains one of the most active and best resourced VCT managers, with a nationwide investment team based across 11 regional offices which ensures full coverage of the UK SME market. At a time when a number of managers are still adapting to the new VCT rules introduced in 2015, our experienced team has demonstrated its ability to identify a diverse range of VCT qualifying companies, and has now completed 14 new investments since May 2016, providing growth finance to innovative businesses across a range of sectors. Investors in the Offers can also benefit from an early investment incentive discount for applications accepted by 2 February 2018. The discount is 1.5% of the application amount for existing shareholders in any of the six Maven VCTs, and 1.25% for new investors, and reduces the initial offer costs in order that the investor is allotted a higher number of shares. As detailed on page 12, investors can also access the first dedicated online application portal available from a VCT manager, which offers a quick and convenient way to apply for the Maven Offers. This is an advertisement issued by Maven Capital Partners UK LLP and is neither a prospectus nor an invitation to invest. An investment in shares in the Offers referred to in this advertisement should be made solely on the basis of information set out in the Securities Note, Summary and Registration Document (together the 'Prospectus', and available at mavencp.com/vctoffer) issued on 22 September 2017 by Maven Income and Growth VCT 3 PLC and Maven Income and Growth VCT 4 PLC. In September Maven VCT 3 and VCT 4 announced joint Offers to raise 15m each, providing investors with access to two established VCTs with a record of rising shareholder returns and mature, diverse private company portfolios. The additional funds raised will allow the VCTs to make further investments in entrepreneurial businesses, at a time when Maven has a strong pipeline of investment opportunities in high-growth private companies across the UK. Steve Marshall Sales and Marketing Director Maven Capital Partners Further information can be found at mavencp.com/vctoffer where the Offer documents can be downloaded. VCT Offers 09 THE OFFERS IN NUMBERS * The Early Investment Incentive is only available for applications received and accepted by 12.00 noon on 2 February 2018. ** Assumes that the investor benefits from initial income tax relief of up to 30%, as currently available to investors in new VCT shares. 30 million Fundraising amount (with a 10 million over allotment facility) 3 April 2018 Offers close for the 2017/18 tax year 20 April 2018 Offers close for the 2018/19 tax year 5,000 Minimum subscription per applicant 1.5% Early Investment Incentive for existing shareholders (in any Maven VCT)* 1.25% Early Investment Incentive for new investors* 7.35p Average annual dividend paid by Maven VCT 3 in the past five full financial years 6.52p Average annual dividend paid by Maven VCT 4 in the past five full financial years 13.3% Average tax-free annual yield for Maven VCT 3 over the past five full financial years** 10.43% Average tax-free annual yield for Maven VCT 4 over the past five full financial years** 3.4x Average exit multiple achieved across all Maven VCT realisations since January 2014 mavencp.com 10 mavencp.com BROKERING A GOOD DEAL Investment will fund the build out of a new multi- line insurance broking business and enable the expansion of the senior management team Investor Partners "We are excited to have secured Maven's confidence and investment, an important capital injection that will enable us to grow at speed. As our industry changes and innovates, we look forward to recruiting talented individuals to our firm and working with Maven to deliver our growth plans." Alan Wallace CEO, Altra Consultants In October Maven's co-investment network, Investor Partners, invested 3 million in Altra Consultants Limited to fund the growth of its Lloyds of London registered insurance broking subsidiary Parker Norfolk & Partners Ltd (PNP), which Altra acquired in August 2017. Altra was established in 2011 by Alan Wallace and Tracey Anderson with the aim of developing a multi-line insurance broking business. Both are well regarded, seasoned veterans within the sector and have a track record of previously starting and growing a successful broking business, International Risk Consultants (IRC), before exiting to a larger industry consolidator. IRC ultimately became the largest specialty trade credit broking firm in the UK, and the second largest of its kind in Europe. Altra has obtained all requisite FCA approvals for using PNP's Lloyds accreditation thereby delivering significant advantage to Altra's service offering, enabling the firm to generate revenues via a mixture of direct sales to corporate entities and wholesale insurance through other insurance brokers. Initially Altra will offer structured trade credit insurance broking services, an area where the senior management team have significant experience, with a medium term plan to further diversify and grow into a multi-line business through the recruitment of key individuals from across a variety of insurance disciplines. 11 mavencp.com SHARP AS A TACK Newcastle tech firm poised to enter the next stage in its growth by investing in its sales & marketing function and boosting its delivery capabilities. Investor Partners "The time is right for hedgehog lab to take on external investment which will substantially drive growth. It became apparent very quickly that Maven was the right investment partner to help take the company to the next level, creating jobs in the North East and further afield. The local team led by Michael Vassallo rapidly developed a solid understanding of our business and we look forward to working closely with them over the next few years. We see this deal as a vote of confidence in our business plan." Sarat Pediredla CEO, hedgehog lab In September Maven Investor Partners completed an investment in hedgehog lab, a mobile app designer and technology consultancy with a global footprint, which has grown rapidly over the past 10 years. hedgehog lab is capitalising on the increasing consumer use of apps, providing cutting-edge solutions to its clients, and making use of the latest, most impactful technologies. As one of only a handful of UK technology companies focused purely on app development, and having already worked with blue chip brands including The Financial Times, Channel 4, Mitsubishi and Microsoft HoloLens, hedgehog lab is well placed to capitalise on a growing market where over a third of the world's population owns a smartphone. hedgehog lab currently has a sales presence in the UK, US, Denmark and India, as well as delivery teams in the UK and India. Maven funding will support hedgehog's next phase of growth, allowing the company to invest further in its sales & marketing function, boost its delivery capabilities and broaden its presence overseas, while also creating additional skilled jobs in the UK. Founded in 2007 by CEO Sarat Pediredla and Mark Forster, who between them have nearly 40 years' experience as software developers, hedgehog lab's revenues grew 130% last year while employee headcount more than doubled to 120. The investment in hedgehog lab is the second Maven has made in the region since opening offices in Newcastle and Durham during 2017. Venture Capital Trusts invest in some of the UK's most dynamic and fast-growing businesses, often positioned at the cutting edge of new and innovative client solutions. In fact, according to figures research by the Association of Investment Companies digital, creative, and information technology are amongst the sectors which most frequently attract VCT investment. Steven Ford Marketing Manager Maven Capital Partners 12 mavencp.com VCT INVESTMENT FINALLY JOINS THE DIGITAL AGE Managers within the VCT industry have however been slow off the mark when it comes to adopting the latest new technologies or software systems for their own operations. Indeed financial services in general has long been accused of being a late arrival to the digital age. In their defence, businesses operating in the financial services sector are highly regulated, and typically will have to meet and pass rigorous compliance requirements in order to implement new ways of working, so simply cannot adapt to change as quickly as other industries. Clearly though there is scope to innovate, and being in the financial sector shouldn't limit the use of new technology in striving to improve customer service. Before Compare the Market (CTM) launched its award-winning 'Compare the Meerkat' campaign in 2009, many believed it was impossible for financial services firms to connect on such a deep and personal level with customers. However CTM's content was original, resonated with the audience, and skilfully humanised the brand. Many investors are already seasoned users of digital personal banking, with the ability to make an array of online transactions at the touch of a button, yet every year investors ask us why the VCT industry continues to cater only for paper applications and cheques for new top-up Offers. So it is clear that there is increasing demand for a more straightforward and innovative solution for making an application. VCT News 13 mavencp.com "Investors in the new Offers are therefore the first to benefit from the option to submit their application and payment online, by using a new dedicated and secure portal." Late last year Maven set out to address this long-standing frustration, aiming to cater for those who are digitally active by offering the opportunity to invest online. This may not sound revolutionary to those of us familiar with completing online transactions through sites such as Amazon, ASOS or eBay, but the opportunity to apply online for new VCT shares has simply not existed until now. Maven has worked alongside Link Asset Services (the Receiving Agent and Registrar for the Maven VCTs, formerly known as Capita) to design a new system which provides a quick and convenient way of subscribing to the Maven VCT Offers. Investors in the new Offers launched in September 2017, are therefore the first to benefit from the option to submit their application and payment online, by using a new dedicated and secure portal at www.mavencpoffer.com. The investment portal has now been up and running since the end of September for this year's Offers and we are pleased to see that it has already been well used, with applicants benefiting from a submission process that is both faster and easier to complete. This is a positive new addition to Maven's VCT offering, though of course it will take time to change the habits of individuals developed over two decades of VCT investing. However in the coming years we fully expect Maven's peers to implement similar online systems, and for more investors to benefit from this more convenient way of subscribing for new VCT shares. 14 mavencp.com A LEAP FORWARD Maven investee Chic Retreats launches new brand, travel lifestyle website, and improved digital solution for independent hotels. Portfolio News Chic Retreats is offering Creating Value readers a 10% discount off their first booking. The saving will be refunded to the customer post-stay. To find out more about the terms and conditions, or to take advantage of the offer, call Chic's reservation team on 0203 131 5411 or email reservations@chicretreats.com, quoting 'Maven'. To view the range of properties and special breaks available please visit: www.chicretreats.com Portfolio company Chic Retreats, which the Maven VCTs backed in November 2016 to support development of its core web and mobile technology platform, has launched its new website and visual identity. Chic provides a dedicated platform for luxury boutique hotels and villas to optimise the distribution and availability of their rooms, as well as offering online exclusive deals on independent luxury hotels and holidays around the world. Since Maven's investment the team at Chic has further developed its core platform, improving both user experience and navigation for website users. The travel lifestyle brand has also evolved from a request site to cater for live bookings, with the plan to have 95% of its inventory being instantly live bookable by the end of March 2018. Chic differentiates itself through a more personal approach than other generic online travel agencies and the typically impersonal hotel booking engines operating in the same market. Chic's portfolio has been meticulously curated to only include accommodation where its hosts are passionate about delivering a unique experience to each and every guest. The new website reflects this core value by providing a richer and more content- led digital solution which enables more discerning customers to research the best-fit for their requirements, rather than being purely led by price. Matchmaking is at the heart of its new identity, bringing together hosts, properties and travellers with shared interests. The new website categorises properties with descriptive tags called 'Inspirations', allowing travellers to tailor their experience to reflect their specific preferences and link to a diverse range of over 70 special interests, including organic food, yoga, ancient ruins and history, and sport-fishing. To explore the new website please visit www.chicretreats.com. 10% OFF YOUR FIRST BOOKING Readership Offer QUOTE 'MAVEN' WHEN YOU CALL Aberdeen | Birmingham | Bristol | Durham | Edinburgh | Glasgow | London | Manchester | Newcastle | Nottingham | Preston Follow us on Twitter Twitter.com/maven_cp Follow us on LinkedIn LinkedIn.com/company/ maven-cp Subscribe for email updates mavencp.com/enewsletter OUR LOCATIONS STAY CONNECTED VCT SHAREHOLDER ENQUIRIES For any enquiries about a VCT shareholding or valuation, please contact the registrar Link Assets Services. Link operates a dedicated non-premium rate VCT shareholder helpline on behalf of the Maven VCTs, on 0333 300 1566*, or can be emailed at vcts@linkgroup.co.uk. Shareholders can also register on the Link share portal at www.signalshares.com in order to easily access and maintain a shareholding online, including changes of address. Please note that Link can only provide information directly to a shareholder, or to a professional adviser who has provided a valid, signed letter of authority to obtain information on the shareholder's behalf. * Lines are open 0900 to 1700, Monday to Friday (excluding public holidays in England and Wales). Calls are charged at the standard geographic rate, and will vary by provider. Calls from outside the UK will be charged at the applicable international rate. 15 mavencp.com Maven Capital Partners UK LLP Kintyre House 205 West George Street Glasgow G2 2LW Tel 0141 306 7400 Authorised and Regulated by The Financial Conduct Authority mavencp.com Important Information Please note that Maven cannot give any investment, legal or taxation advice in respect of any fund or product featured in this document. This document is not an invitation or a recommendation to invest, and is for information purposes only. Past performance is not a guide to future performance. Prospective investors should regard an investment in either a VCT or in an unlisted company as a long term investment. The underlying investments of VCTs are predominantly shares of unlisted companies; such investments are not publicly traded and are therefore likely to be illiquid and difficult to realise. Such investments also carry a substantially higher degree of risk than other types of investment. The value of shares in a VCT or in an unlisted company and the level of income derived from them may fall as well as rise and investors may not get back all or any of the money originally invested. Certain Maven investments are not suitable for, or made available to, retail investors. If you have any doubt about the suitability for you of any fund or investment referred to in this document, we recommend that you seek professional advice from an authorised financial adviser. MAVEN CAPITAL and MAVEN logo are the registered trademarks of Maven Capital Partners UK LLP, registered office 1-2 Royal Exchange Buildings, London, EC3V 3LF.
