FORESIGHT 4 VCT PLC - Foresight Group

holdings in money-market instruments, short-dated bonds, unit trusts, OEICs, structured products and
other assets where it is believed that the risk/return portfolio is consistent with the overall investment
objectives of the portfolio.
UK companies
Investments are primarily made in companies which are substantially based in the UK, although many
will trade overseas. The companies in which investments are made must have no more than £7 million of
gross assets at the time of investment (or £15 million, depending on applicable HMRC rules) to be
classed as a VCT qualifying holding.
Asset mix
The Company aims to be significantly invested in growth businesses, subject always to the quality of
investment opportunities and the timing of realisations. Any uninvested funds are held in cash, interest
bearing securities and a range of non-qualifying investments. It is intended that the significant majority
(no less than 70%) of any funds raised by the Company will ultimately be invested in VCT qualifying
investments.
Risk diversification and maximum exposures
Risk is spread by investing in a number of different businesses within different industry sectors using a
mixture of securities. The maximum amount invested in any one company is limited to 15% of the
portfolio at the time of investment.
Investment style
Investments are selected in the expectation that value will be enhanced by the application of private
equity disciplines including an active management style for unquoted companies through the placement
of an investor director on investee company boards.
Borrowing powers
The Company has a borrowing limit of an amount not exceeding an amount equal to the adjusted capital
and reserves (being the aggregate of the amount paid up on the issued share capital of the Company
and the amount standing to the credit of its reserves). Whilst the Company does not currently borrow, its
policy allows it to do so.
Liquid investments
The Company’s liquid investments will primarily be maintained in money market funds with the objective
of generating income whilst maintaining the Company’s capital pending investment in Qualifying
Investments. Money market funds invest their assets in constant NAV money market instruments (i.e.
cash and near cash, such as bank deposits, very short term fixed interest securities or floating rate
notes). The main objective will be the protection of capital so that priority will be given to the credit rating
of the funds used rather than the rate of interest offered.
Co-investment Policy
Where more than one of the companies managed or advised by the Foresight Group wishes to
participate in an investment opportunity, allocations will be made in accordance with Foresight’s
allocation policy as at the date of allocation. The policy provides that allocations are made firstly to any
company (or the relevant fund attributable to a share class) with an existing investment in the relevant
company, secondly to any company (or the relevant fund attributable to a share class) whose investment
strategy is specifically focused on the business of the relevant company and third to all other companies
(or the relevant fund attributable to a share class) whose investment strategy is generally consistent with
the investment in business of the relevant company. Within each stage, allocations are made pro rata to
the net funds raised by each company (or the relevant fund attributable to a share class), except where
there is an existing investment, in which case allocation is pro rata to such existing investment.
Implementation of this policy will be subject to the availability of monies to make the investment and
other portfolio considerations such as sector exposure and the requirement to achieve or maintain a
minimum of 70% of a particular VCTs portfolio in VCT qualifying investments.
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