A total of £429m was raised by the Venture Capital Trust (VCT) sector in the 2014/2015 tax year, according to the latest figures from the Association of Investment Companies (AIC). The amount is the fourth highest level of annual funds raised and the highest amount raised in over nine years.
This is a £9m improvement on 2013/14, when the VCT sector raised £420m. An additional £17.3m was raised through enhanced share buybacks during 2013/14, but the rules were changed to abolish these in April 2014. In order to ensure the 2014/15 figures are comparable with the historic VCT fundraising figures, the historic fundraising totals exclude buy-backs.
The AIC has also reported that the total VCT funds under management increased from £3.22bn to £3.46bn over the year to 5 April 2015. 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 added. “The sector plays a critical role in providing finance and support to up-and-coming businesses in the UK – the backbone of the economy.”
The Chart shows historic VCT fundraising by tax year with the highest amount being raised in 2005/06 at £779m after which there was a huge drop in 2006/07 by £512m to £267m.
The lowest figure was in 2003/04 when the fundraising hit £50m but surprisingly surged by 10 times in the following financial year. While there is some volatility in the amounts raised every year, it can also be seen that the sector remains insulated from the global financial crisis that hit the world in September 2008.
A drop can be seen in the amount raised in the year 2008/09 but the sector has since picked up momentum.