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Stock Analysis & ValuationMaven Income and Growth VCT 4 PLC (MAV4.L)

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£51.50
Sector Valuation Confidence Level
High
Valuation methodValue, £Upside, %
Artificial intelligence (AI)118.34130
Intrinsic value (DCF)23.23-55
Graham-Dodd Method0.11-100
Graham Formulan/a

Strategic Investment Analysis

Company Overview

Maven Income and Growth VCT 4 PLC (MAV4.L) is a UK-based Venture Capital Trust (VCT) specializing in mature and later-stage investments in small and medium-sized enterprises (SMEs) across diverse sectors, including AIM/ISDX-quoted companies. As part of the Maven Capital Partners group, the fund focuses on co-investments, typically seeking majority stakes while limiting individual investments to £1 million annually. Operating under the UK's VCT tax-efficient structure, it provides investors with dividend income and capital growth potential. The fund targets established businesses with proven revenue models, reducing early-stage risk while supporting UK economic growth. With a market cap of approximately £86 million, MAV4.L plays a significant role in the UK's alternative investment landscape, offering exposure to private equity-style returns within a listed vehicle. Its sector-agnostic approach and disciplined investment strategy position it as a flexible option for investors seeking venture capital exposure with income characteristics.

Investment Summary

Maven Income and Growth VCT 4 PLC offers investors tax-efficient exposure to UK SMEs through its VCT structure, with an attractive dividend yield (3.75p per share) and focus on mature companies that mitigate some venture capital risks. The fund's conservative approach—capping investments at £1 million and targeting majority stakes—provides portfolio control but may limit upside potential. Financials show profitability (net income of £2.2 million) but negative operating cash flow (-£597k) raises questions about sustainability. The low beta (0.14) suggests defensive characteristics, though VCTs inherently carry illiquidity and concentration risks. Investors should weigh the tax benefits against the fund's sector concentration in UK SMEs and its performance relative to broader private equity alternatives.

Competitive Analysis

Maven Income and Growth VCT 4 PLC differentiates itself within the UK VCT market through its focus on mature/later-stage SMEs and disciplined co-investment approach. Unlike early-stage VCTs, MAV4.L's strategy reduces business model risk while still offering growth potential. Its affiliation with Maven Capital Partners provides deal flow and due diligence advantages, though this also creates manager dependency. The fund competes with both traditional VCTs and private equity funds, offering retail investors access to typically institutional-only opportunities. However, its investment cap (£1 million) may prevent participation in larger deals where peers are more active. Performance hinges on the UK SME ecosystem's health, exposing it to regional economic fluctuations. The zero-debt balance sheet is a strength, but the negative operating cash flow suggests reliance on realizations for liquidity. Its competitive edge lies in tax efficiency and sector diversification, though larger asset managers may have superior scaling capabilities.

Major Competitors

  • Albion Venture Capital Trust PLC (AAVC.L): Albion focuses on earlier-stage investments compared to MAV4.L, offering higher growth potential but greater risk. Its broader sector specialization (including tech) contrasts with MAV4.L's generalist approach. Albion's larger AUM provides diversification benefits but may reduce agility in deal sourcing.
  • Downing FOUR VCT PLC (DGI9.L): Downing emphasizes renewable energy and infrastructure investments, differing from MAV4.L's general SME focus. This thematic approach attracts ESG-conscious investors but creates sector concentration risks. Downing's higher dividend yield may appeal to income seekers, though with potentially greater volatility.
  • Hargreave Hale AIM VCT PLC (HGT.L): Specializing in AIM-listed companies, Hargreave offers more liquidity than MAV4.L's private company focus. Its public market orientation reduces valuation uncertainty but exposes it to market sentiment swings. Strong historical performance but with higher correlation to equity markets than MAV4.L.
  • Maven Income and Growth VCT PLC (MIG.L): MAV4.L's sister fund under the same manager, with nearly identical strategy. Larger size may provide better terms on co-investments but could lead to overlap in portfolio holdings, reducing diversification benefits for investors holding both.
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