The new client offering is starting with five VCTs, namely Octopus AIM VCT, Octopus AIM VCT 2, Octopus Apollo VCT, Blackfinch Spring VCT and Calculus VCT.

These additions are part of 49 existing VCTs on the HL platform.

Emma Wall, head of platform investments, Hargreaves Lansdown said: “HL’s new VCT online service will broaden our client offering, support the VCT investment market and help shape it for the future. After the commitment made by the Government to extended VCTs to 2035, and given the tax changes announced in the Budget, VCTs are a great way for people to invest their money in a tax-efficient way, over the longer term, as part of a diverse investment portfolio.

“We’re delighted to partner with Octopus Ventures, Calculus, and Blackfinch Investments to launch our new service with five initial VCTs, which will invest in AIM businesses and key sectors of the UK economy.

“The VCT market has been a vital tool for entrepreneurial UK businesses to get the seed funding they need to kick-start their enterprise for nearly 30 years, which has helped the UK to be one of the best places in the world to start a business.

“Using our market leading position and scale, our VCT service has the potential to help the VCT market grow in the future, delivering favourable returns for investors, and support more businesses at the start of their growth journey.”

The most recent National Audit Office statistics shows that in 2022 to 2023, over 26,000 VCT investors claimed income tax relief on £985 million of investment, and the table below provides an insight into the increase in flows into VCTs over the last few tax years.

Jess Franks, head of investment products, Octopus Investments: “It’s great to see Hargreaves Lansdown coming back to the world of VCTs, offering suitable retail investors the opportunity to access exciting, early-stage private companies.

“What this shows is how VCTs are continuing to become a more mainstream part of investing for those clients who undertake their own planning and are comfortable with the risks associated with the asset class. This launch also comes at a good time, with the government’s recent extension of VCT legislation until April 2035.”

John Glencross, chief executive of Calculus Capital: “Hargreaves Lansdown’s welcome return to the VCT market is a positive development for both investors – particularly in the post-Budget, higher-tax environment – and the broader UK economy. VCTs play a crucial role in providing funding to small and growing businesses, the backbone of innovation and job creation in the UK.

The Calculus VCT – available through Hargreaves Lansdown – offers investors a diverse portfolio of companies across a unique sector mix of Healthcare, Technology and Entertainment.”

Alex Sumner, commercial & investment director, Blackfinch Ventures: “We are delighted to be amongst the first partners for Hargreaves Lansdown as they expand their client offering to include Venture Capital Trust investments. The UK remains one of the best places in the world to launch and grow an ambitious start-up.

As McKinsey reported, out of Europe’s top 1,000 high-growth start-ups, 319 are UK-based. The tax incentives available through VCTs are undoubtedly one of the reasons for this success.

For investors, this doesn’t just mean 30% upfront tax relief and strong return potential – it also means helping the UK’s brightest entrepreneurs to build a better future. With a strong track record and the expertise of our skilled investment team, the Blackfinch Spring VCT provides investors with an opportunity to back the growth of these innovative technology-enabled companies across the UK.”

Yesterday (14 October), a majority (87%) of shareholders voted in favour of the deal while 13.3%  voted against the offer.

Voting results of the Court Meeting

Results of the poll at the Court Meeting held on 14 October 2024 were as follows:

* Where a Scheme Shareholder cast some of their votes ‘for’ and some of their votes ‘against’ the resolution, such Scheme Shareholder has been counted as having voted both ‘for’ and ‘against’ the resolution for the purposes of determining the number of Scheme Shareholders who voted as set out in this column.

** Rounded to two decimal places

The HL statement said: “Shareholders will now have to decide if they want to participate in Bidco’s ‘alternative offer’, whereby eligible HL shareholders may elect for in respect of some or all of their shares as an alternative to the cash consideration.

“The outcome of the Court Meeting and General Meeting means that Conditions 2.1 and 2.2 (as set out in Part A of Part III of the Scheme Document) have been satisfied. The Scheme remains subject to the sanction by the Court at the Court Hearing, which is expected to take place in the first quarter of 2025.”

The consortium member CVC Capital Partners announced the news on 9 October in a stock market statement

The private equity consortium is made up of CVC Advisers Limited, Nordic Capital, and Platinum Ivy, a subsidiary of Abu Dhabi Investment Authority, under the newly-formed bidding company Harp Bidco.

The deal is set to be implemented by a court-sanctioned scheme of arrangement.

The investment platform’s board has recommended that shareholders vote in favour of the acquisition, with the deal expected to close in the first quarter of 2025.

The HL Global Equity Income fund will start trading on 7 November 2024, the UK platform said in a statement today (7 October).

Toby Vaughan, chief investment officer, Hargreaves Lansdown said: “We’re excited to launch our new Global Equity Income fund, giving clients easy access to global stock markets with a focus on delivering both reliable income and growth.

“The fund invests in a well-diversified portfolio of high-quality, dividend-paying companies worldwide, handpicked by our chosen expert managers. Along with steady income, it offers the potential for long-term capital appreciation, striking the right balance between risk and return.

“While UK dividends are a strong and reliable option historically, the strengthening of global dividends is making international diversification an increasingly attractive strategy – and one we’ve seen adopted by our clients as well as incorporated into our own asset allocation strategy.

“The fund will complement our existing range of HL Building Block funds, offering clients a seamless and straightforward way to build a portfolio aligned to their long-term investment goals.”

The fund is aimed at any investor looking to build an investment portfolio aiming to provide income, or income and growth, as well as those looking for exposure to global stock markets with particularly appeal to investors transitioning towards retirement or in retirement where income is a key objective.

HL has partnered with three global equity income managers in the sector:
1. Aegon – Aegon take a ‘quality income’ approach to dividend investing, with their process set up to find companies with strong balance sheets and plentiful free cash flow that can sustain and grow their dividends over multi-year periods.
2. Baillie Gifford – there’s an emphasis on selecting dividend-paying companies that Baillie Gifford perceives to have attractive growth prospects. The companies typically have resilient business models that provide stability at times of market volatility.
3. JPM – a disciplined core approach providing a balance of current income and future dividend growth by investing across the yield spectrum.

The fund is one of HL’s Building Block funds, which is a range of funds offering greater diversification across different global sectors, will fund managers that are dedicated experts.

The fund will pay a monthly income, with a final payment of the closing balance at the end of the year, while the asset allocation covers UK, developed markets, ex-UK and emerging markets.

Launch and fund details

• There’s a £1 per unit fixed offer launch price from 10 October until 23:59 on 6 November 2024.
• Minimum investment: lump sum of £100 or £25 per month by Direct Debit
• OCF 0.79% plus HL platform fee:
o ISA – up to 0.45%
o LISA – up to 0.25%
o JISA – Free
o SIPP – up to 0.45%
o Fund and share account – up to 0.45%

HL fund managers are Tom Wells and Richard Troue.

Wells joined HL in 2021 as a fund manager within the multi-manager team, with a focus on portfolio construction, investment strategy and economic research. Prior to joining HL he was a multi-asset fund manager at Aviva Investors.

Troue joined HL in February 2006. He joined the investment team in February 2010, initially as an investment analyst, before becoming Head of Investment Analysis. In July 2019 he became part of the team responsible for managing HL’s Multi-Manager funds. He currently co-manages the HL Global Corporate Bond, HL Multi-Manager Strategic Bond and HL Global Equity Income Funds.

The consortium, comprising CVC, Nordic Capital and an Abu Dhabi Investment Authority subsidiary Platinum Ivy, had previously offered 985p per share.

The LSE statement released this morning said: “The independent directors of Hargreaves Lansdown plc (“HL”) and the board of directors of Harp Bidco Limited (“Bidco”) are pleased to announce that they have reached agreement on the terms and conditions of a recommended final* cash acquisition by Bidco of the entire issued, and to be issued, ordinary share capital of HL.”

Since Hargreaves Lansdown shares were admitted to the London Stock Exchange in May 2007, its AUA has grown from £10.2bn to £155.3bn as at 30 June 2024.

The board’s recommendation is a major step towards taking Hargreaves Lansdown private, although the consortium will now need to secure the backing at at least 75% of shareholders to complete a deal.

Alison Platt (pictured), the chair of HL, said: “HL is on an important journey to transform the saving and investing experience for clients and make it easy to save and invest for a better future.

“While the Independent HL Board has been pleased with the progress made by the new management team, the Independent HL Board believes that the Cash Offer represents an attractive opportunity for HL Shareholders to realise an immediate and certain cash value for their investment at a level which may not be achievable until the execution of the strategy is delivered over the medium to longer term, and therefore intends to unanimously recommend HL Shareholders vote to approve it.

“We are pleased to see that the Consortium is aligned that HL has an important purpose making it easy for the UK consumer to save and invest for a better future.”

Pev Hooper, managing partner at CVC Private Equity Group, Emil Anderson, partner at Nordic Capital Advisors and Hamad Shahwan Aldhaheri, executive director of the Private Equities Department at ADIA said: “HL has an important purpose: to make it easy for people to save and invest for a better future.

“Over the 40 years since it was founded, HL has built a strong, trusted brand, underpinned by high levels of customer loyalty and advocacy. As a consortium, we are aligned with management that, despite these strengths, the company now requires substantial investment in an extensive technology-led transformation to improve HL’s proposition and resilience, and to drive the next phase of HL’s growth and development.

“The Consortium brings extensive experience in supporting businesses undergoing transformation, and its members have long records of investing in regulated financial services companies to build better businesses and create better customer experiences.

We look forward to partnering with HL’s management to accelerate its transformation plan – including investment in technology infrastructure, digital channels, and service enhancement – all with client value, service, speed of innovation, and HL’s clear purpose at the core.”