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FOREWORD
Welcome to the first industry report focused purely on
VCT.
Over £5.5 billion has been raised by some 200+ VCTs (Venture
Capital Trusts) since their launch in 1995. These funds have
supported Small and Medium Sized Enterprises (SMEs), the smaller
companies that are the lifeblood of the UK economy.
This money has a measurable positive impact: according to the
Association of Investment Companies (AIC) on average each SME
increases turnover by £12.71 million and adds 51 new employees
post VCT investment.
Investors have benefited as well: The sector has delivered a +81%
return over the last ten years and currently yields +8.2% (AIC).
So VCTs are a good news story. So why are some advisers wary of
recommending them to their clients? Perhaps because they also have a
reputation for high costs and often trade at a discount to their NAV.
These sorts of things can be hard to explain to clients.
This is a shame, because the tax breaks on offer (30% Income Tax
relief up front, tax-free dividends and tax-free growth) are generous
and the stock market listing offers higher levels of transparency and
liquidity than other Tax-Advantaged Venture Capital Schemes
such as the Enterprise Investment Scheme (EIS). New pension
limits also mean advisers are looking for additional tax-advantaged
investments for suitable clients.
For these reasons we think many advisers will be reassessing their
stance on VCTs and investing more of their clients’ money in them
than in previous years.
This report has been written with those advisers in mind. We want
to provide a timely and accurate snapshot of where the VCT market
is today; examine how well the industry is coping with the latest
round of rule changes, help advisers get to grips with the whole-of-
market, give our readers meaningful insights into the VCT industry
and provide some ideas for how VCTs can be utilised. Our objective
is to help advisers make informed decisions about this sector.
GuyTolhurst
Managing Director
Intelligent Partnership
COPYRIGHT © INTELLIGENT PARTNERSHIP 2015
EDITORIAL
Daniel Kiernan
Samantha Goins
Aditi Surana
Jacobo Lazcano
CREATIVE
Mar Alvarez
SUB-EDITING
Guy Tolhurst
Daniel Kiernan
RESEARCH
Samantha Goins
Aditi Surana
Jacobo Lazcano
Derek Casanas
MARKETING
Alex Evans
Michelle Powell
Four Way