Venture capital trust (VCT) managers are optimistic for the year ahead, with more than three-quarters believing the economy is improving, compared to just 45 per cent last year, reports the Association of Investment Companies (AIC). Some 24 per cent think the outlook is mixed (see our report on changes to VCT legislation)
Reasons for their optimism include an improvement in bank lending, while 94 per cent of them expect their portfolio companies to be net recruiters next year, compared to 70 per cent last year.
VCT managers are most optimistic about prospects for the technology & IT sector in 2014, followed by healthcare and business services. Some 88 per cent of VCT managers expect exports and overseas sales to increase next year.
"Despite the difficulties in the wider economy, the structural opportunities in the creative industries created by digital technology continue to generate their own momentum," said Alasdair George, director at Edge Investments.
"The growth drivers in healthcare, leisure and hospitality will be attractive for investment as people have more free time and start to feel they have more money in their pocket to spend on themselves after years of austerity," added Chris Allner, partner at Downing. "Quality and value for money will remain key components to be a successful operator, with consumers wanting more choice and differentiated offerings."
Meanwhile, Andrew Buchanan of Octopus Investments expects to see continuing share price growth for the Alternative Investment Market (Aim) during 2014, as smaller companies drive the UK's economic recovery. "The year 2013 has been a positive one for Aim, helped by the new individual savings account (Isa) rules that allow investors to hold Aim shares, with many companies raising new capital," he said. "This will be helped enormously by the government's decision to abolish stamp duty on Aim shares, reducing the cost of capital yet further. The year 2014 is set to be another year when investing in growing innovative companies will benefit everyone."
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