The latest data shows that Venture Capital Trusts (VCTs) have raised a record breaking amount of funds overtaking last year’s total VCT fundraise a month in advance of the tax year end.
With a month still to go before the tax year end, over £541m had been invested into VCTs , overtaking the £540m raised by the end of tax year end 2017.
And as of 12 March 2018, VCT fundraising has now reached £550m.
Managing Director of Octopus Investments Paul Latham said: “The ever-growing demand for VCTs is not surprising when you consider the recent changes to pensions legislation, restrictions on the lifetime allowance and to the buy-to- let market. As these areas become squeezed, people are increasingly looking to VCTs to provide them with a credible way of investing in a tax efficient manner.
“In the last few years we’ve seen more and more people invest in VCTs throughout the year but we still expect to see a seasonal inflow towards the end of tax year end as people get their finances in order ahead of the new tax year. It’s a record breaking year for VCTs as more investors look to access the benefits of investing in the growth potential of smaller companies and the tax reliefs that VCTs offer.
“The government has clearly recognised the huge role VCTs can play in addressing the UK’s funding gap and has acted to ensure investment is focused where it is needed most. The good news is that we are seeing significant appetite among investors for this type of early stage investment, something that Octopus Titan has focused consistently on over the past decade.”
Octopus Investments is the UK’s largest provider of VCTs.
Octopus Titan is the UK’s largest VCT and rapidly reached its initial fundraise target of £120m within just four months. It is now offering an additional £80m of fundraising capacity to meet investor demand ahead of tax year end. The target of £200m will be the largest ever fundraise by a VCT and, once fully subscribed, would increase the total fund size to over £600m.