Key Highlights

  • Baronsmead Second Venture Trust plc (LSE:BMD) is listed on the London Stock Exchange Main Market and yields 9.01%.
  • The trust has paid 4.0p per share in each of the last two financial years.
  • A final Dividend of 2.25p was approved at the AGM on 19 March 2026 and paid on 24 March 2026.
  • An Interim Dividend of 1.75p was paid in September 2026.
  • Unaudited NAV was 48.45p per share at 31 July 2026.
  • The trust plans a new offer for subscription in the 2026/27 tax year alongside Baronsmead Venture Trust.

Overview of Baronsmead Second Venture Trust

Baronsmead Second Venture Trust plc (LSE:BMD) is one of the UK's longest-established Venture Capital trusts, managed by Gresham House. It invests in a mix of unquoted growth companies and AIM-listed businesses, aiming to provide tax-free dividends and Long-term Growth to qualifying investors.

The 9.01% Yield reflects the trust's policy of distributing a meaningful portion of NAV each year. For VCT investors, the tax-free status of dividends makes the effective return higher still.

Latest Results and NAV

In the quarter to 31 December 2025, NAV per share fell 3.9% to 52.0p as AIM and smaller company valuations weakened. The trust declared a 2.25p final dividend for the year ended 30 September 2025, approved by shareholders at the AGM in March 2026. Including the 1.75p interim, the total for FY25 was 4.0p, matching the previous year.

The trust's half-year report for the six months ended 31 March 2026 was published in mid-2026. By 31 July 2026, the unaudited NAV stood at 48.45p per share, after the payment of dividends.

Dividend Record

Baronsmead Second has paid dividends every year for many years. Its dividends were 4.5p in FY23 and 4.0p in FY24 and FY25. The current pattern is an interim of 1.75p and a final of 2.25p. The interim for FY26 of 1.75p was paid on 8 September 2026, suggesting the board intends to maintain the 4p annual level.

How the Dividend Is Funded

Like all VCTs, Baronsmead Second funds dividends mainly from realised gains on investments and income from loans and quoted holdings. Accounting cover shown on platforms looks low because VCTs do not generate large recurring profits. The relevant measure is whether total returns over time exceed the dividend paid. A 4p dividend on a NAV near 48p to 52p represents roughly 8% of NAV, which is in line with many generalist VCTs.

Fundraising and Liquidity

In October 2025, Baronsmead Second and Baronsmead Venture Trust launched offers to raise up to £30m. On 30 July 2026, the two trusts announced their intention to launch another offer during the 2026/27 tax year. Fresh capital supports new investments, Buybacks and dividends, and strong Demand is a vote of confidence in the manager.

Portfolio and Market Backdrop

The trust's exposure to AIM shares means its NAV is sensitive to UK smaller company sentiment, which has been weak for several years. Unquoted holdings provide diversification. A recovery in UK small caps, or a pickup in mergers and acquisitions, would help realisations and support dividends.

Risks

The main risks are falling NAV due to weak AIM performance, slower exits from unquoted holdings and changes to VCT tax incentives. Persistent NAV decline could force the board to reduce the dividend to preserve capital. Shares can also be Illiquid and trade at a discount to NAV.

Market Sentiment

Investor commentary values the trust's long history and the Gresham House team's experience. Over five years, returns have lagged in absolute terms, but performance has compared reasonably with the wider VCT sector in difficult conditions.

Tax Benefits for Investors

Qualifying UK investors receive VCT dividends tax-free, and new subscriptions can attract income tax relief if held for the required period. For higher-rate taxpayers, this materially increases the effective yield compared with a taxable dividend.

Comparing BMD With Its Sister Trust

Baronsmead Second Venture Trust operates alongside Baronsmead Venture Trust, also managed by Gresham House, and the two run joint share offers. Both follow similar Investment strategies across AIM and unquoted companies. Comparing their NAV trends and dividends can help investors understand how manager decisions translate into returns, since market exposure is broadly similar.

What Investors Should Watch

Watch the annual results for the year ending 30 September 2026, any change in the final dividend, NAV movements and the new share offer.

Is the 9.01% Yield Sustainable?

The 4p dividend looks sustainable in the near term given the consistent payment pattern and continuing fundraising. However, maintaining it depends on NAV stability. LSE:BMD suits tax-aware investors seeking regular tax-free income with tolerance for small company volatility.