In this special interview for GBI Magazine, we are joined by Chris Lewis, the Chair of the Venture Capital Trust Association (VCTA).
Chris discusses the ways(s) in which the VCT industry has developed over the last 30 years, shares some of his personal highlights from working in the industry, provides his expert outlook for the future, and outlines some of the top priorities for the VCTA moving forward.
Q: VCTs are 30 years old in 2025. How has the industry evolved over that time?
The Venture Capital Trust (VCT) sector has undergone significant evolution since its inception in 1995. Initially, VCTs were relatively niche, directing capital to early-stage businesses, sometimes asset-backed, while also giving investors a substantial tax relief on their initial investment. Over the past 30 years, the sector has grown into a vital component of the UK’s investment landscape, supporting innovative, high-growth businesses (across sectors including technology, health, consumer and manufacturing) that are integral to the UK’s employment fabric and economic future.
One of the most notable changes has been the shift towards more experienced fund managers running VCTs with longer-term horizons, investing in a broad range of sectors including technology, healthcare, and consumer businesses. This reflects a maturing of the industry as VCTs have become an essential vehicle for providing patient capital to companies that need time to scale. The development of AIM-listed companies and the rise of sectors including AI and technology have also contributed to the diversification of the VCT portfolio, offering investors exposure to dynamic, fast-growing industries. As we approach the 30-year milestone, it’s clear that VCTs have not only endured but have become indispensable in supporting the UK’s entrepreneurial ecosystem.
Q: What is your favourite memory of working in the sector / biggest achievement so far?
One of my proudest achievements has been the growth of Pembroke and its VCT during my time at the firm. Since I joined, we’ve seen Pembroke grow fivefold, both in terms of assets under management and staff. Being able to build a high-performing VCT that consistently delivers for investors while also creating jobs and supporting entrepreneurial talent has been immensely rewarding. It’s particularly satisfying to know that this success isn’t just about financial returns but also about fostering innovation and contributing to the broader growth of the UK’s venture capital landscape. Alongside my role at Pembroke, chairing the VCT Association (VCTA) has provided another avenue to shape the future of the industry, which has been a fantastic complement to my work.
Q: If you weren’t working in the VCT sector, what might you be doing instead?
If I wasn’t working in the VCT sector, I’d likely be pursuing my love for cycling. I’ve always been passionate about the sport and have had the opportunity to ride the full Tour de France route, twice Whether on or off-road, cycling has always provided a great outlet, both physically and mentally. Cycling offers many parallels to venture capital—both require team work, perseverance, strategy, and a long-term view to succeed.
Q: How do you view the fundraising outlook for the sector?
The fundraising outlook for VCTs remains strong, and recent years have demonstrated the sector’s resilience, even during challenging economic conditions. In the 2023/24 tax year, VCTs raised £882 million, marking the third-highest total on record. This level of fundraising underscores the growing confidence among retail investors in VCTs as a vehicle for supporting high-growth, innovative companies while benefiting from attractive tax incentives. Over the past three tax years, VCTs have collectively raised over £3 billion, a testament to their enduring appeal and relevance in the current investment landscape. This is a fantastic indicator of private investor confidence into the UK’s high growth and high potential smaller companies.
Looking forward, there are many reasons for optimism. The European Commission’s approval of the UK government’s extension of the VCT and EIS schemes for another 10 years is a significant boost to investor confidence. This “Sunset Clause” extension, recently confirmed by the Treasury, ensures the continuity of both schemes which have played a crucial role in funding scale-up businesses across the UK. What’s particularly noteworthy is how VCTs have continued to raise capital in a period when broader venture capital markets have contracted. This unique positioning of VCTs, offering both patient capital to high-growth businesses coupled with a range of government sponsored tax advantages, is likely to drive continued fundraising success. The model has proven its worth, especially during economic uncertainty, and I expect this trend to carry forward into 2025 and beyond.
Q: What are the VCT Association’s priorities over the next 12 months?
Now that the sunset clause extension has been confirmed, the VCT Association’s focus shifts to refining the VCT scheme to make it even stronger. The scheme has been highly effective, but we believe there are opportunities to make it even better. One area for consideration is the asset, annual and lifetime limits for companies eligible for VCT investment. As businesses scale, these limits can sometimes restrict the growth trajectory of promising companies. These thresholds have been eroded by inflation and revisiting them would allow VCTs to continue backing innovative firms as they mature, ensuring that capital is directed where it’s most needed.
Additionally, age limits for qualifying companies are another area we’re exploring. Many of the businesses which VCTs invest in have demonstrated incredible resilience and have thrived, despite being older than the typical early-stage company. Revisiting the age restrictions could provide more flexibility, allowing VCTs to invest in slightly older firms that still have big ambitions and require significant capital to grow and scale.
The VCTA remains committed to working closely with the government to ensure the scheme remains a vital component of the UK’s entrepreneurial ecosystem. With a few strategic adjustments, we believe the VCT scheme can evolve from good to great, providing even greater value to investors, the companies we support, their employees and the wider UK economy too.
Chris is the chair of the VCTA, having succeeded Will Fraser-Allen in the role as of January 2024.
Chris brings over 25 years of wider industry experience to the Chair. He is currently Chief Financial and Operating Officer at Pembroke VCT, which manages more than £200m in VCT assets, spanning a diverse portfolio of over 40 growth-stage companies. Prior to joining Pembroke in 2019, Chris was the Chief Financial Officer at Downing LLP, which was an active investor in growing businesses through its VCT and EIS products. He has also worked in professional services, with KPMG & EY, and with a Family Office.
