The emeritus professor of management entrepreneurship at Exeter University praised the ability of VCTs to “change the world” despite having “repeatedly returned some of the worst investment performances”.
Writing in Osprey Capital’s seven-page five-year report, Dr Murray said: “Venture capital trust is all about the outliers. These are the rare persons and firms that defy the centralising and smoothing logic of statistics. Relatively few succeed, but when they do, they frequently change the world.
“Considering the huge value of entrepreneurs to any modern, knowledge-based and innovation-focused economy, every UK citizen should be very grateful for entrepreneurs’ indifference to the mean, the median and the mode.”
According to Dr Murray, VCTs were often criticised for ignoring new technologies, refusing long-term commitments, not always investing in start-ups and being geographically concentrated in the south of England.
But despite some of these vehicles trading higher potential returns for lower risk opportunities, he added that these were not dissimilar attitudes to those of banks lending to SMEs, and should be recognised as key to supporting up-and-coming businesses.
Adviser view
Philip Haden, director for Worcestershire-based McCarthy Taylor, said: “VCTs provide a tax-efficient solution to investors, although this is obviously not without its risks.”
