Venture capital trusts raised GBP153m in the last tax year, higher than the GBP50m to GBP100m that some people predicted, according to Matrix Private Equity Partners.
Venture capital trusts raised GBP153m in the last tax year, higher than the GBP50m to GBP100m that some people predicted, according to Matrix Private Equity Partners.
The firm says that in a year of global downturn, unprecedented market and credit conditions, and the number of private equity firms giving up on plans to raise money from investors on the rise, the VCT sector has proved to be resilient.
The GBP153m total raised is in line with VCT managers’ expectations, but is a 30 per cent decrease on the prior year (GBP220m) and one fifth the 2005/06 peak of GBP779m.
Mark Wignall of Matrix Private Equity Partners and manager of the Matrix Income & Growth VCTs believes that this fall is largely due to the reduction in the 40 per cent up front tax break to 30 per cent.
Wignall (pictured) says: ‘The leading VCT managers had fruitful fundraisings, garnering sums between GBP5m and GBP30m. Several managers hit 70 per cent or more of their fundraising target, proving investor appetite for tried and tested VCTs even in challenging fundraising conditions. However the government should now do more to stimulate the VCT sector, if we are to restore retail investment to 2005 levels into the vital area of the UK smaller company financing. VCTs have the existing infrastructure and resource to fill the finance gap created by the withdrawal of 3i and the reduction in lending by the high street banks.’
