I have received a document entitled “The Changing Faces of VCTs” – probably because I hold a number of them having invested some years ago. It’s a good summary of the successes of some Venture Capital Trusts and how they could be improved – the limits on funding and age of investee companies do inhibit the growth of successful businesses.
The rules for VCTs are now quite restrictive and they are no longer as attractive as they used to be. It is clear from this report that VCTs have been successful in stimulating investment in early-stage companies. What is not so clear is whether such investments have given good returns to investors in VCTs, even after the tax reliefs that investors obtain.
With high management charges and a high risk of failures in investee companies (which tend to drop out of the fund performance figures), I am not convinced that they are great investments at present. The main beneficiaries have been the VCT managers and the Government, not the retail investors in them.
You can read the VCTA report here: https://www.vcta.org.uk/news/vcta-launches-30th-anniversary-report%3A-the-changing-faces-of-vcts
Roger Lawson (Twitter: https://x.com/RogerWLawson )
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Saw the content of this blog in Shareoc Informer. I haven’t thought about VCT/EIS for 25 years, but this young observer seems well-informed and plausible https://www.chalmermagne.com/p/a-parody-of-venture.