May 2024 shareholder update presentation

RM: It’s obviously a very disappointing situation when we have a business failure and sadly it will be a feature when investing in this area of the Venture Capital market. There are 25 investments in the B share portfolio right now, and from time to time there will be the odd investment that doesn’t work out and Bidstack is one such investment. But nonetheless, a very disappointing outcome and we feel that pain ourselves.

That said, I am aware of the conversations more broadly on some of the chat rooms and forums in terms of the anger amongst the shareholder base towards what has happened. From our perspective, we have reached out to our lawyers and we are taking legal advice on it, to establish if there is a route forward from a legal standpoint and we will provide an update in due course.

RM: There’s really good alignment between us and shareholders here, as a manager we want a larger VCT and more liquid funds in order to progress and to invest in more of the companies that we see each year. So there’s strong alignment from our ambitions to grow the VCT and indeed shareholders to participate in a growing VCT. Yes, it has been slightly slower than what we would have hoped for, but that’s not to say we won’t continue to drive this VCT forward, we absolutely will. In terms of specific actions, we have a full-time sales team at Seneca and have recruited into that team in the last 12 months, so we can knock on more doors and take the story out to the all important IFA community. We’re fully aware that a lot of cash flows into VCT’s through the IFA community, so we need to engage with them as we are doing. We’re also aware that funds flow in from other investors and again through recorded sessions like today, those investors can understand the VCT and who we are. There’s no shortcut, it’s about doing the hard yards, taking the Seneca story out to the IFA community and letting them know what we stand for. We’re a regional player, investing on AIM and in private companies which will be attractive to a lot of investors.

JH: I’m keen on this and particularly the ability to realise profits which can fund the payment of the dividends but perhaps you or Matt would like to explain where we stand on the AIM versus unquoted companies.

MC: We remain pretty consistent on this and we do see it as the optimal way of building the portfolio in the growth capital space. We like the liquidity, the quality of businesses and assets on AIM and it gives us the ability to harvest profits and returns as we see fit. It is very much a home for good quality businesses in the UK, notwithstanding that, its had a difficult period and there have been some lower quality businesses that have captured the headlines over that time. However, we absolutely see the merits of building a portfolio of public and private businesses. That’s not to say it’s solely based on AIM, we love working closely with management teams on the private side and there’s benefits to that too. It absolutely supports the mantra that we have stuck by of having exposure to both.

RM: I think Matt has summarised it well, our job is to find the best businesses in the country that are VCT qualifying and to invest into those businesses. I would just frame that to say if they’re private businesses, we should invest privately and if the best businesses are on AIM, then we should invest on AIM.

RM: When we say share price, I think the question actually refers to NAV. I think we have covered this well, what we want to do today is make people understand what is going on and why our NAV would reduce, and I think we have made the link to the AIM market very well. The viewers should also take away some really exciting progress being made by the businesses under the bonnet, so we all hope that this current NAV is temporary. Over the medium term, the quality and progress being made by investee portfolio companies will come through both in private company profitable sales and in the appreciation in the share price in some of the AIM quoted businesses.

JH: I think we’re seeing a slight turnaround and some light at the end of the tunnel on the FTSE and AIM.