news//views Issue 03 2013

InsideNorthern VCTs launchjoint share offers

Our latest share issue explained

Investors in the new shareoffers will gain immediateexposure to a common portfolio of mature and diverse smaller UK companieswith high growth potential.Tim Levett,Chairman of NVM

Fund performanceAn overview of how your funds are performing

The fruits of our labourA look at recent realisations

Investing in growingbusinesses andexperienced people

We show you how we are investing your funds

Delivering

results

.

Venture Capital Trusts (VCTs) provide core funding to SMEs to help them to succeed, and our Northern VCTs are leading investors in this sector.

Over the last three years Northern VentureTrust, Northern 2 VCT and Northern 3 VCT have achieved Compound AnnualGrowth Rates (CAGR) of 12.6%, 9.6% and 9.4% respectively–driven by risingprofits in our portfolio companies andselling our businesses at healthy prices.

Why are we raising £50 million?The UK economic cycle is reaching a point where the environment for makingnew venture capital investments may be more favourable over the next two to three years than has been the casesince the financial crisis. The perceivedreluctance of UK banks to lend to SMEsshould help to sustain demand forinvestments of the type made by our VCTs.

What are we doing?• £50 million joint offers in Northern VCTs, in which investors have the option to invest in any one or acombination of our funds.

• Northern Venture Trust and Northern 2VCT will raise up to £15 million each, and Northern 3 VCT fundraising will raise up to £20 million.

What are the benefits of being anexisting Northern VCT shareholder?• Loyalty bonus – 1.5% reduction in offer costs for applications received by 30 September 2013.

• Long-tail early bird discount – 1%reduction in offer costs for applicationsreceived between 1 October 2013 and 7 February 2014.

When do I get my dividends?If your application is received by 22 November,you will be entitled to receive the dividendspayable in December 2013 by NorthernVenture Trust and in January 2014 byNorthern 2 VCT and Northern 3 VCT.

There is more recognition in the press that small and medium-sizedenterprises (SMEs) will drive the UK out of recession.

Northern VCTs launchjoint share offers

This year, we have seen deal flow increase and expect further growth over the next three years.We are also building our investment team to take advantage of this growth.Tim Levett,NVM

How do you invest?• Direct – Download the prospectus (including application form) from our website

www.nvm.co.uk/vctoffer and return your application by post to:

NVM Private Equity LimitedNorthumberland HousePrincess SquareNewcastle upon TyneNE1 8ERFor further information contact Alison Spedding on 0191 244 6000 or Email vct@nvm.co.uk

• Via your intermediary

Important noticeAn investment in a Venture Capital Trust (‘VCT’) carries a higher risk than many other forms of investment. In addition, the value of an investment in a VCT may go down as well as up and investors may not get back the full amount invested, even after taking into account the tax reliefs. VCTs usually trade at a discount to their net asset value. It may be difficult to exit VCTs and they should be considered as long-terminvestments. The past performance of a VCT is not a reliable indicator of its futureperformance. NVM does not offer investment or tax advice or make recommendationsregarding investments. Any application for shares should be made solely on the basis of the prospectus relating to Northern Venture Trust PLC, Northern 2 VCT PLC andNorthern 3 VCT PLC dated 31July 2013.

Net cost Tax relief Growth in value

Tota

l Ret

urn

per

sha

re (p

)

N2VCT2011/12

N2VCT2010/11

NVT2009/10

NVT2007/08

N3VCT2005/06

N3VCT2005/06

N3VCT2004/05

N3VCT2001/02

N2VCT2000/01

N2VCT1999/00

NVT1996/97

NVT1995/96

220

0

20

40

60

80

100

120

140

160

180

200

Tax year of launch

How have our previous fundraisings performed? We have launched 12 significant share offers over a 15 year period across variouscycles in the UK economy, and all those who invested in these offers have benefittedfrom real growth in the value of their investment in addition to the tax relief. The chart below is based on share offer launches that raised over £5 million.

Northern VCTs’ track record (without dividends re-invested)

We build strong relationships with our portfolio management teams duringthe life of our investment. Our executives typically take a place on the boardof the business to help bring an objective view on what needs to be done tomeet targets and build shareholder value.

The fruits of our labour

It is a great achievement to see a business grow with the help of funding and the continued commitment of thepeople involved in the business. Ideally, we will sell a business when the time is right for the management team and there is an opportunity to create value for your investment. In the last nine months we completed three strong portfolio exits; generatingsignificant returns for our investors. InNovember 2012, we sold Paladin Group, a property management company and four months later, Interlube Systems, a manufacturer of automated lubricationproducts. In June 2013, IG Doors, themanufacturer of composite external doors, was also realised. These three sales generated combined income and capital proceeds on exit of over £21 million for the Northern VCTs.

The management teamsof Paladin, Interlube andIG Doors all share highlevels of commitment and sector experience, as well as a resoundingdetermination to succeedduring the good timesand the bad.Martin Green, NVM

Investing in growingbusinesses andexperienced peopleWe are continuing to invest in new resources to help generate investmentopportunities and manage our portfolio companies.

Andy Leach joined NVM earlier this year to cover investments in the North West of England. He has over 26 years of private equity experience and spent the last 20 years working in the North Westmaking him a valuable addition to ourinvestment team. Andy completed his firstdeal for NVM in July – investing £7 million inthe management buy-out of UK upholsteredfurniture manufacturer, Buoyant Holdings. David Rolfe was appointed just over ayear ago to cover our investment activity in the South of England. His extensiveexperience of corporate finance and thelocal business community has provedinvaluable to NVM. Since joining he hassuccessfully completed a £3.5 millioninvestment in Haystack Dryers, a designerand manufacturer of purpose built peopledryers for the leisure industry. Theinvestment won The Business Magazine’sSolent ‘Deal of the Year (under £25 million)’award for NVM this year. David led his second deal for NVM in June, investingjust over £4 million in Kirton Group, amanufacturer and supplier of specialistseating for the elderly and disabled.

David Rolfe’s appointment was closelyfollowed by the arrival of Charlie Pidgeon,also experienced in corporate finance. He is providing vital support to members of our investment team, helping them to generate new business and manage our portfolio across the UK.

Other members of the investment teamhave also worked on new investmentsrecently. Peter Hodson led NVM’s £7 million investment in the managementbuy-out of Intuitive, a provider of softwareand related services to the travel industry.Mauro Biagioni managed the £3 millioninvestment in Cleveland Biotech, a provider of environmentally friendlybiological waste treatment products.

Our investment team consists of a strongmix of people from private equity, corporatefinance and industry backgrounds. Thisoffers a broad range of expertise andenergy for your portfolio.

We are delighted to be backing Buoyant – a century old Britishmanufacturing businesswith a strong track record and an ambitiousmanagement team.Andy Leach, NVM

To review case studies of our recent deals visitwww.nvm.co.uk/casestudies

Fund performanceNorthern Venture Trust PLC

Launch date 1995 Share price 77.50p Latest NAV per share 93.4p (30 June 2013) No of shares in issue 75,873,232 Market capitalisation £58.8 m Dividend yield 7.7%

1 year 3 years 5 years 10 yearsNAV total return – company 117.0 143.7 173.5 333.5

– sector 109.9 126.4 129.4 212.6average

Northern 2 VCT PLC

Launch date 1999 Share price 74.75pLatest NAV per share 85.8p (30 June 2013) No of shares in issue 74,422,079Market capitalisation £55.6 mDividend yield 7.4%

1 year 3 years 5 years 10 yearsNAV total return – company 107.4 132.4 143.5 174.4

– sector 109.9 126.4 129.4 212.6average

Northern 3 VCT PLC

Launch date 2001 Share price 92.00p Latest NAV per share 105.8p (30 June 2013) No of shares in issue 48,175,561 Market capitalisation £44.3 m Dividend yield 6.0%

1 year 3 years 5 years 10 yearsNAV total return – company 112.4 132.6 141.0 168.9

– sector 109.9 126.4 129.4 212.6average

Northern Investors Company PLC

Launch date 1984 (listed since 1990) Share price 307.50p Latest NAV per share 364.2p (30 June 2013) No of shares in issue 12,128,440 Market capitalisation £37.3 m Dividend yield 3.1%

1 year 3 years 5 years 10 yearsNAV total return – company 111.8 144.7 148.5 215.1

– sector 113.2 134.0 92.2 213.2average

‘Share price’ is mid-market price as at 22 August 2013. ‘Dividend yield’ is based on dividends paid and proposed in respect of the latest full financial year, expressed as a percentage of share price. Total return statistics are for periods to 22 August 2013, return shown is on £100 invested, based on mid to mid share price/latest published NAV, assuming net income re-invested (source: Morningstar). In accordance with AIC methodology, figures shown over three years are based on NAVs excluding current period revenue; and figures shown for three years and under are based on NAVs including current period revenue. ‘Sector average’ refers to the following sectors:VCT Generalist Northern Venture Trust PLC

Northern 2 VCT PLCNorthern 3 VCT PLC

Private Equity Northern Investors Company PLC

Shareholder meeting dates:Seminar for Northern VCTShareholdersFriday 15 November 2013, 11.30amLondon

Northern Venture Trust PLC, AGMThursday 12 December 2013, 11.30amLondon

For further information about thesemeetings or if you have another shareholderquery, please contact:

Wendy ArkleT 0191 244 6024E wendy.arkle@nvm.co.uk

Newcastle Office:Northumberland HousePrincess Square Newcastle upon TyneNE1 8ERT 0191 244 6000F 0191 244 6001 E newcastle@nvm.co.uk

Reading Office:Forbury Court12 Forbury RoadReadingRG11SBT 0118 951 7000F 0118 951 7001E reading@nvm.co.uk

Manchester Office:3111 Beetham Tower301 DeansgateManchesterM3 4LQ T 0161 4011320E manchester@nvm.co.uk

www.

nvm

.co.u

k

Follow us @nvmpeltd

Northern VCTs win ‘Best VCT Report & Accounts’Best Shareholder Information

Awards 2013

NVM wins ‘Private Equity Firm of the Year’

Northern VCTs win ‘VCT of the Year’