Seneca has launched its first new venture capital trust (VCT) for five years.
Seneca's existing business has been focused on investing through enterprise investment scheme (EIS) and other such tax efficient vehicles in recent years.
The company aims for investors in its VCT to receive a dividend in the first year.
All of the income earned by investors in a VCT is free of tax, while investors receive a 30 per cent income tax break if the shares are held for two years.
This only applies to new shares in VCTs.
The VCT will open in early May; however, broker Wealth Club is offering an exclusive pre-launch deal with no initial charge.
Once launched, it will carry a 5.5 per cent charge.
Alex Davies, founder of Wealth Club, said: "Seneca has a strong track record in growth deals, and that’s precisely what VCTs are about now. The decision to build on previous experience and launch a new VCT offering seems a natural step for Seneca.
"It is also very timely. With pension changes and higher taxes for wealthy investors, demand for VCTs is only going to increase.
"At the same time, several VCTs raised record amounts last tax year, and are unlikely to raise again this year, which could mean we face a capacity crunch. A new VCT offering from an experienced team is definitely good news for investors."
Jason Hollands, managing director for business development and communications at Tilney Group, said: "The fund raising environment can prove challenging for those starting a VCT with a relatively blank sheet of paper.
"One of the advantages mature VCTs have when raising new funds is that their existing portfolios provide instant diversification and are largely comprised of deals done when the VCT rules were a lot less onerous than.
"Therefore their risk profiles will evolve over time as new deals are made and investors should benefit from exits from mature holdings. New VCTs clearly need time to build a portfolio before investors can start to see the upside from successful exits but it is welcome to see the likes of Draper Esprit and Seneca move into the VCT market."
david.thorpe@ft.com
