Some 19 venture capital trusts changed management group in 2009, with the majority of these due to management buy outs among a number of VCT management groups, according to the Association of Investment Companies.
One of these became self-managed and a further five VCTs merged.
In addition, 14 VCTs became fully qualifying by placing 70 per cent of their holdings in qualifying investments. Five of these were generalist VCTs, four were Aim focussed VCTs, three were VCT specialist: media, leisure and events, and two were VCT specialist: environmental.
VCTs have raised GBP21m since 5 April 2009, largely due to VCTs keeping their 2008/9 offers open in the 2009/10 tax year. A small number of new prospectuses have been announced and the AIC expects further new prospectuses to be launched in the next few months.
Reflecting the recent outperformance of smaller companies generally across the closed ended investment company sector, VCTs in the Aim sector have been the top performers over the last three months to 30 September 2009, up three per cent.
Annabel Brodie-Smith, communications director at the AIC, says: “Management buy-outs have been a key theme of 2009 amongst a number of VCT fund management groups, and it’s also been interesting to see mergers perhaps creeping up the agenda, albeit mergers within management groups. The short-term outperformance of the AIM VCT sector reflects the rally that the smaller companies/Aim sector has experienced overall, and it will be interesting to see if this rally continues.
“Given the forthcoming increase in the higher rate of income tax, not to mention the reduction of pension tax relief and the restrictions on personal allowances, VCTs, with their 30 per cent income tax relief providing the shares are held for a minimum of five years, could well move up the radar for higher earners. It’s important to do your homework, and the AIC provides a range of information on the VCT sector, from information on corporate activity, performance, portfolio information, and more. The VCT sector enjoys a wide following amongst advisers and it’s worth seeking independent advice if you are in any doubt.”
