Changes in pensions relief have left VCT managers optimistic about investment opportunities, according to a poll.
A survey by the Association of Investment Companies (AIC), representing 73 per cent of the sector’s assets, found that a fifth of VCT managers felt there were currently more opportunities for investment than last year.
The poll also explored the impact of changes to VCT rules.
The maximum amount a venture capital trust-qualifying company can receive over its lifetime has been limited to £12m, or £20m for ‘knowledge-intensive’ companies.
In order to be eligible for VCT investment, companies will normally have to have made their first commercial sale in the past seven years, or 10 years for knowledge-intensive companies.
Almost half of respondents said they currently found a similar number of investment opportunities to last year, before the rule changes; around a fifth said there were more opportunities than last year; and a third said there were fewer investment opportunities compared to last year.
Annabel Brodie-Smith, communications director at the AIC, said: “The VCT sector continues to play a hugely important role supporting SMEs, and it is encouraging that the sector continues to report good opportunities.
“The VCT sector is extremely diverse, and the impact of the rule changes will depend on individual companies and strategies.
“But the sector has always been adept in dealing with change, and for the end user, the VCT benefits remain, both from a tax planning, income and diversity perspective.”
Adviser view
Robert Forbes, financial planner at Stadden Forbes Wealth Management, said: “This information does completely make sense as banks aren’t lending as much as businesses need for funding.”
