GM Statement - Update

Albion Venture Capital Trust PLC

LEI Code 213800JKELS32V2OK421

Update on 21 August 2019 General Meeting Voting Results

At the General Meeting (the “Meeting”) held on 21 August 2019, an ordinary resolution was proposed to approve changes to the Company’s Management Agreement, as detailed in the circular sent to shareholders on 1 July 2019.

Whilst the majority of shareholders supported the changes, with 70.4% of the votes cast in favour of the resolution, the Board noted that more than 20% of the shareholder votes were against the resolution.

Following the Meeting, in accordance with the UK Corporate Governance Code, the Board has carried out a consultation process with shareholders whose shareholdings represented a majority of votes that voted against the resolution to more fully understand the reasons for their opposition.

Of the total number of shares that voted against the resolution, shareholders representing 59% were contacted directly by the Chairman. Responses were received from a number of shareholders and the Board has taken time to carefully reflect on this feedback.

There was no clear unanimous reason for the opposition to the proposed changes from this feedback, however some of the views expressed were as follows:

• The performance incentive fee increase from 8% to 20% of the excess profits above the hurdle, was felt by some to be too high;
• Performance incentive schemes are inappropriate for VCTs as a whole;
• The hurdle of RPI + 2% in the current environment felt too low; and
• The details contained in the Circular sent to shareholders on 1 July 2019 could have been better explained.

In light of this feedback, the Board revisited its original benchmarking and carried out further analysis on the management performance incentive arrangements across the VCT industry. The results of this analysis further reinforced the Board’s views that the new performance incentive scheme was a fair and effective scheme, with a challenging hurdle, that would help to ensure the delivery of good shareholder returns. Specifically, it was noted that an excess share of 20% is the industry norm and not excessive in the current market.

Nevertheless, taking into account the views expressed by some shareholders at the AGM and in our subsequent consultation, the Board has re-negotiated with the Manager to reduce the hurdle from 20% to 15% which will be deemed to have taken effect from 1 April 2019. All other terms, as detailed out in the circular sent to shareholders on 1 July 2019, will remain the same.

The Board would like to thank those shareholders who provided feedback on this matter and would like to emphasise that the Board is committed to act in the best interests of shareholders, in line with the UK Corporate Governance Code.

6 February 2020

For further information please contact:

Albion Capital Group LLP

Company Secretary

Tel: 020 7601 1850