Albion Technology & General VCT PLC: Balancing Growth and Caution in a Tech-Driven Market

Albion Technology & General VCT PLC (AATG) has delivered a mixed but largely positive performance in its 2024 Annual Financial Report, highlighting strategic shifts toward high-growth sectors while navigating macroeconomic uncertainties. The report underscores the fund’s ability to capitalize on successful exits and maintain liquidity, even as it faces sector-specific risks and moderates dividend payouts.

Financial Highlights: NAV Growth and Liquidity Strength

The fund’s net asset value (NAV) per ordinary share rose to 73.04 pence as of 31 December 2024, up from 71.99 pence in 2023, marking a modest 0.07% annual gain. However, total shareholder value increased more significantly by 4.73 pence per share (6.57% on opening NAV), driven by capital appreciation and dividends. The fund’s size nearly doubled to £251.3 million, reflecting a strategic acquisition of Albion KAY VCT PLC’s assets (valued at £110.5 million) and strong cash reserves of £32.5 million—37% of net assets. This liquidity buffer, bolstered by proceeds from asset sales like Egress (returning over 7x its original cost), positions AATG to pursue new opportunities in volatile markets.

Key Transactions and Strategic Shifts

The acquisition of Albion KAY VCT PLC marked a pivotal move to consolidate scale and diversify the portfolio. Meanwhile, the sale of Egress—a cybersecurity software firm—highlighted the fund’s success in realizing value from high-growth tech investments. New allocations of £7.0 million in 2024 included stakes in firms like Cantab Research (AI-driven healthcare), Elliptic (crypto compliance), and Avora (data analytics), signaling a deliberate pivot toward technology and healthcare sectors, which now account for over 30% of the portfolio.

This shift aligns with AATG’s updated strategy to reduce exposure to asset-based investments (e.g., property or infrastructure) in favor of higher-risk, higher-reward ventures. However, this comes with risks: write-downs in Mi-Pay (£628,000) and Convertr Media (£403,000) underscore vulnerabilities in sectors struggling with economic headwinds.

Dividends and Capital Allocation

Despite strong NAV growth, dividends were trimmed to 3.68 pence per share in 2024 from 3.72 pence in 2023—a 1.08% reduction. The Board cited cautious management of cash reserves amid ongoing uncertainties, though it maintained a stable dividend discipline by declaring a first interim dividend of 1.83 pence per share for 2025. Share buybacks also increased to £3.4 million (up from £2.8 million in 2023), reflecting confidence in the fund’s valuation.

Risks and Resilience

The report acknowledges lingering risks from the global health crisis and sector-specific challenges. Education and healthcare investments, for instance, remain exposed to demand fluctuations. To mitigate this, AATG has prioritized liquidity management, with cash reserves up from £7.1 million in 2023 to £32.5 million in 2024. The fund also emphasized fraud prevention and investor education, addressing phishing scams targeting shareholders.

Conclusion: A Fund in Transition

Albion Technology & General VCT PLC’s 2024 performance reflects a fund in strategic transition. While its NAV growth and liquidity position are robust, the shift toward higher-risk tech and healthcare sectors introduces volatility. The success of exits like Egress and new investments in AI-driven firms like Cantab Research bode well for long-term capital appreciation. However, the slight dividend cut and sector-specific write-downs serve as reminders of the risks inherent in growth-oriented portfolios.

With £32.5 million in cash and a focus on sectors poised for post-pandemic recovery (e.g., digital healthcare, cybersecurity), AATG appears well-positioned to capitalize on emerging opportunities. Investors seeking exposure to high-growth tech and healthcare firms—while accepting moderate volatility—may find the fund’s NAV stability and disciplined capital allocation appealing. Yet, the test lies ahead: whether the portfolio’s new tech-heavy focus can sustain returns in a market where overvaluation and macroeconomic uncertainty loom large.

In sum, Albion Technology & General VCT PLC’s 2024 report signals cautious optimism, balancing near-term resilience with long-term ambition in sectors primed for innovation-driven growth.