Britain’s venture capital trusts (VCTs) successfully raised £1.08bn from new and existing investors this tax year, marking the second-highest target on record and the second time to ever exceed the £1bn milestone.
Data published today by the Association of Investment Companies (AIC) showed that fundraising decreased by 5% from the record-setting 2021/22 tax year, but represented a 57% increase from the 2020/21 tax year.
During the 2022 calendar year, VCTs invested £700mln in new and follow-on investments in predominantly private companies, though 7% went to AIM-listed groups that did not exceed maximum VCT thresholds.
VCTs were introduced in 1995 as a way of injecting funds into UK growth companies of a certain size, with tax advantages for investors including 30% tax relief for investments up to £200,000 and tax-free dividends and capital gains after five years.
AIC chief executive Richard Stone called the latest funding round “much-needed support to the UK’s fast-growing companies”, touting VCTs’ “vital economic, social and environmental advantages to the country”.
During a tough year for investors, “demand for VCTs remains near record levels demonstrating the numerous benefits they bring”, said Stone.