The 5th annual VCT and EIS Investor Forum hosted by Angel News took place Wednesday, with investment opportunities up for discussion and debate during a number of seminars held throughout the day. With more than 350 wealth managers and private investors in attendance, there was no shortage of conversation. MP David Guake was also in attendance to kick off the afternoon sessions with an interview with Modwenna Rees-Mogg, where he offered a regulator’s perspective on the VCT and EIS sector.
Private sector, growth and SMEs
Lord Digby Jones of The New Troubleshooter opened the forum in the morning and was a highlight of the day for many with his witty and insightful words.
Lord Digby Jones discussed the importance of the private sector and its key role in a healthy and prosperous Britain. The private sector drives growth, provides jobs and helps the government generate taxes that support Britain’s social programs and services such as the NHS.
He also made clear the importance of making the journey to go and meet the entrepreneurs and businesses that you back to see just what the operation is all about, and “beware of the Porsche in the car park”. Taking the time to visit the SMEs you back will not only foster your trust in the business, but also allow for more free-flowing communication and can provide the entrepreneurs with more motivation to succeed.
About the AIM market and growth
Marcus Stuttard from the London Stock Exchange said that the Alternative Investment Market (AIM) is no longer a feeder for the main market. The AIM is a market in its own right, with twice as many companies moving from the main market to the AIM than the other way around.
Interestingly, more businesses were formed in the UK last year than the whole of the United States. This insight provides an impressive glimpse into how AIM is playing a larger role in the UK’s economic growth.
Hot Investments
Baby boomers are perhaps the next big investment theme. With 70% of UK wealth tied up in the boomer generation healthcare, leisure, and medical technology are all attractive sectors to invest was the feelings of Guy Rigby from Smith & Williamson.
Regulation
MP David Gauke provided the regulator’s perspective and reassured the audience of continued of EIS and VCT and don’t view them as an aggressive tax avoidance. They will also continue to play a major role as taxes fall according to the MP.
The 1st Hundred Days
Tim Levett of NVMPD stressed the importance of the 1st hundred days after backing a SME and beware of management teams “showing their true colours once they have the first cheque”. It is important for fund managers to create a healthy relationship with their companies based on clear communication and trust.
Is the tax tail wagging the VCT and EIS investment dog?
Richard Marsh of DFJ Esprit gave one of the key insights taken from the day was the importance of looking at the investment offerings and companies aside from the tax relief. Any given SME should be a good investment on its own, with the tax relief simply a bonus; the tax relief does not turn a bad investment into a good investment. Instead VCT and EIS tax schemes transform a good investment into a great investment.
Overall
The VCT and EIS Investor Forum 2014 provided an overview of recent activity in the VCT and EIS sector, with a detailed look at the challenges, risks and benefits, and investment opportunities. However, the VCT sector was the main focus at the forum with EIS playing a more subtle role.
The industry is also welcoming the introduction of new educational materials, such as our 2014 EIS industry report, which was praised on the day as being a well written, well researched and comprehensive guide to EIS, and expressed support for our upcoming work with BPR and VCTs.
To hear more about the forum, look for #VCTEISForum on social media.
A big congratulations and thank you to Modwenna Ress-Mogg and the Angel News team for a great event.