Venture Capital Trusts  

Over £100mn announced in VCT fundraising

Over £100mn announced in VCT fundraising

Activity is picking up in the venture capital trust sector, with over £100mn in fundraising announced last week.

VCTs run by Albion Capital, Maven Capital Partners and Edition Capital have opened a number of VCTs for new subscriptions.

Albion is seeking to raise up to £50mn across its six VCTs, after raising nearly £100mn earlier in the year.

Article continues after advert

Since the pandemic a raft of ambitious UK companies have emerged that require additional funding to accelerate their growth, according to managing partner at Albion Capital, Will Fraser-Allen.

The current market conditions make VCTs a “compelling” investment case, he said.

“Their long-term investment horizon gives time to weather challenging times and can help investors access companies in sectors that can still thrive at a time when growth elsewhere is elusive…we have seen dramatic digital adoption in recent years, but there appears to be no slowing down of investment opportunities.”

Albion VCT fundraises

VCT

Fundraise/over-allotment amount

Albion Development VCT PLC

£8m/£5m

Albion Enterprise VCT PLC

£8.5m/£8m

Albion Technology & General VCT PLC

£8.5m/£7m

Albion Venture Capital Trust PLC

£8.5m/£2.5m

Crown Place VCT PLC

£8m/£3.5m

Kings Arms Yard VCT PLC

£8.5m/£4m

Source: Albion

Maven Capital Partners has launched a £40mn fundraise across its four VCTs, with an over-allotment of £5mn for VCTs three and four.

Partner at Maven, Ewan MacKinnon, echoed Fraser-Allen’s comments.

He said: “VCTs are playing an ever-more important role in supporting the growth and success of ambitious young businesses, helping to stimulate both innovation and the creation of skilled employment across a range of exciting sectors."

He added that there is a “continued healthy appetite” for VCTs among investors looking to diversify their portfolios.

“Launching this year’s VCT offers will enable us to do our part in driving growth and entrepreneurship in the nation.”

Finally, Edition capital has launched an offer for £10mn of new investment in its Edition Capital VCT Leisures Shares, with a further £10mn in an over-allotment facility.

This vehicle was previously the Oxford Technology VCT, which has been renamed and a new share class launched.

Edition Capital VCT will also merger with the other four Oxford Technology VCTs after a merger was agreed.

Harry Heartfield, senior partner at Edition Capital, said the leisure sector, one in which the Edition Capital VCT invests, is a key part of the UK economy.

“Backing smaller businesses within the UK leisure sector helps support local high streets, create jobs and develop brands that can be exported around the world. 

“The investment case remains strong for leisure, which are typically cash generative businesses, despite the current economic challenges…Other VCT funds principally target the tech sector, and predominantly invests in loss making businesses which have taken a hit this year as inflation and interest rates have risen.”

Sunset clause

In the “mini” Budget last month, previous chancellor Kwasi Kwarteng extended the tax reliefs for VCTs past the sunset clause that was due to expire in 2025.

Pressure had previously been building on the government to signal to the sector what it intends to do with the sunset clause, which would have stopped the tax relief currently available to investors in VCTs and enterprise investment schemes.