22
Jan
Publications, Tax Efficient
Publications are no longer accredited as of 21 September 2023.

This is the first ever VCT Industry Report aimed at advisers. Compiled in autumn 2015, the report covers the history and development of the sector as well as looking at the opportunities that are available in the market today and the different operating models of VCTs. Readers will learn about the changes in legislation that were introduced in 2015 and the impacts they will need to consider when investing; the tax reliefs available and how they can be used to create tax efficient decumulation strategies at retirement; the challenges with analysing performance and fees and how they can be overcome; and suggestions for carrying out suitability assessments, due diligence and putting together investment panels. Finally readers will learn how their peers and other investors view the VCT market.

For advisers who are new to this sector and perhaps considering it for the first time in the light of new limits on what can be saved into pensions, this report will provide a useful overview and reference point to help them approach the market, giving them guidance on what to look for and where to go for more information. For advisers with more experience in the VCT market, it will help to keep them up to date with the latest changes in the rules governing the scheme and any new developments, as well looking in depth at what is available in the market today and what the typical levels of fees, returns and areas of investment are.

Key Findings:

  • Over £5.5 Billion has been raised by VCTs since their launch in 1995
  • The new rules excluding MBOs and Company Acquisitions will change the risk profile of some VCTs
  • The average investment size is £2.31 million per company
  • 85% of initial investments into companies address the finance gap identified by Government 
  • 66 VCTs raised £440 million in the year to April 2014
  • The number of VCTs managing funds peaked at 131 in 2007-08
  • There were 97 VCTs managing funds in 2013-14
  • VCTs paid out aggregate dividends of over £240 million in the year to March 2015
  • Generalist VCTs currently yield 8.9% on average
  • AIM VCTS currently yield 5.6% on average
  • There are currently 32 providers in the market
  • Generalist VCTs account for over 60% of the market at the moment
  • For every £1 of initial tax relief, an average investee company sees its turnover rise by £6.46
  • The total assets of the sector now stand at  over £3.5 billion
  • 67% of the advisers we surveyed recommended VCTs to their clients
  • 44% of those recommend VCTs to both HNW and ordinary retail clients
  • Investors were split 50:50 when asked if they would invest more in VCTs in the next 12 months
  • Only 9% of advisers expected to recommend fewer VCTs in the next 12 months

 

Download your FREE copy

*Intelligent Partnership was named Joint Winner of the Best Innovation Award at the 2014 EISA Awards for its Alternative Investment Report Series.