Venture Capital Trusts  

VCTs becoming 'increasingly mainstream'

“As a venture investor in an unquoted business, [the investment] comes with risk, and you can’t get away from that. It’s not that those companies don’t need a healthy economy, but it does come with a different sort of investment journey...they are at the beginning of their lives.”

Amati’s VCT does have exposure to the public market as it invests in AIM companies, however Jourdan explained the rises and falls could be muted.

“The private market valuations are always a derivative of public market valuations in the end,” he said.

He added private firms take longer to react to public market moves as they publish their NAV quarterly, which had a benefit.

“If you get a flash crash like we had in February and March last year when the lockdown started, you wouldn’t see that in the private company NAVs because there wasn’t time.”

Then there’s the firms who run the VCTs.

Bird outlined how these investment firms have come a long way in the 25 years they've existed, and have grown to be significant funds.

“If you haven't looked at VCTs for a while, as an adviser, I'd always say take a fresh look, because they've changed a lot in the last sort of five or six years,” he said.

He added the firms offering VCTs now have track records of ten years or more, so for people who want established funds run by well known fund managers the information is there for them to analyse.

Ultimately, all agreed that encouraging this kind of investing was beneficial for the UK economy.

Bird said: “The tax relief that [the government] has provided has proved to be a very influential way of encouraging investors to make investments that really benefit UK plc, and this is very much about growth, jobs, employment, and corporate taxes.”

Jourdan added that Amati will be focussing on “everything connected to net zero” in the future.

“[Achieving net zero] requires a huge amount of innovation. But it is also a big opportunity if you can bring the right technologies to market.”

sally.hickey@ft.com