VCT capacity crunch as pension tax changes bite

Others, such as Mr Kiernan, believe the opposite could happen, leading to a less attractive marketplace for investors.

“There are quite high barriers to entry,” he said. “It’s much more attractive to invest in an established VCT that already has a portfolio and is already paying a dividend.

“The power is very much in the hands of the managers. There aren’t any pressures on them to reduce their costs or increase transparency. 

“It would be a very good thing to have new players, but this [demand] may have the opposite effect.”