Investments  

Record fundraising of £429m for VCTs in 2014/2015

Record fundraising of £429m for VCTs in 2014/2015

The venture capital trust sector has raised £429m in the 2014/2015 tax year, data from the Association of Investment Companies has revealed.

According to the figures, this is the highest amount raised since 2005/6, with funds under management in VCTs rising from £3.22bn to £3.46bn up to 5 April this year.

This is a £9m improvement on the previous 2013/14 tax year, when the VCT sector raised £420m, including some share buy-backs.

Article continues after advert

Ian Sayers, chief executive of the AIC, said: “It has been a particularly strong VCT fundraising year, and this reflects the popularity of the sector among investors.”

It is also likely that the Budget’s pension changes will increase future demand for VCTs, he said, adding: “The sector plays a critical role in providing finance and support to up-and-coming businesses in the UK – the backbone of the economy.”

Historic VCT fundraising figures excluding enhanced share buy-backs

Tax year

Fund raising (£millions)

2014/2015

429

2013/2014

420

2012/2013

269

2011/2012

267

2010/2011

354

2009/2010

338

Adviser view

David Scrivens, co-founder of Hemel Hempstead-based investment adviser Clubfinance, said: “Many VCTs met their fundraising targets far earlier than in previous years and some of our clients who did not heed warnings to invest early did not get their preferred VCT or missed out completely.

“Looking ahead to this year, it is too early to speculate on VCT market capacity, but demand for VCTs is only likely to grow. Pension freedoms may also see some people looking to reinvest retirement pots and VCTs’ ability to pay tax-free dividend income makes them a natural fit for pensioners prepared to bear the risk of investing in small and unlisted companies.”