Last week was the biggest week for VCT fundraising this tax year with investors pouring GBP44.6m into VCTs. Over half of that (GBP24.5 million) was channeled into Octopus Titan, analysis from Wealth Club reveals.
The total for the tax year is now GBP527 million, just 9 per cent behind the GBP577 million raised in the same period in 2017/18.
Alex Davies, CEO and founder of Wealth Club, says: “Despite all the political uncertainty it’s looks like this is going to be another stellar year for VCTs, with investment so far just shy of the amount raised at the same point in 2017/18, and considerably ahead of the amount raised at that point in the previous year.
“Eight offers have already closed, and other popular ones are near capacity or filling fast. Last week, Octopus Titan, which has a track record in spotting and nurturing young innovative technology-led businesses, was the biggest fundraiser having taken GBP24.5 million. Next were the Proven VCTs with GBP7 million.
“This week and next are likely to be big for VCTs. This is usually when lots of the bigger investors come out. Therefore, if you spot a deal you like invest now. Even if it seems to have quite a bit of capacity, that can change quickly and you could miss out.
“Mooted changes to VCT tax relief, meant there was a rush to invest VCTs before the November 2017 Budget. So more was invested and earlier in the tax year. Undoubtedly Brexit uncertainty has also had an effect and if we didn’t have the political chaos we have now, I am sure investment at this point would be considerably higher. That said since January demand has been buoyant, with nearly double the amount invested compared to the same period in the previous tax year.
“What’s more, with the tax burden at its highest since the 1970s, and with higher earners no longer able to invest significant sums into their pensions, the appeal of VCTs is set to continue.
“Of those that remain open, our preferred VCT offers include Octopus Titan, Pembroke, Proven and Unicorn AIM.”
