- VCT fundraising slowed down in the last tax year
- Many will prioritise topping up their pensions while they can
- But VCTs still offer tax advantages to high earners and a degree of diversification
In the 2023-24 tax year, venture capital trusts (VCTs) raised a total of £882mn. While nothing to sneeze at, it was almost £200mn less than the previous 12-month period, equivalent to a decrease of 18.2 per cent. This partial decline did not come as a shock to sector commentators such as Jason Hollands, managing director of Bestinvest. “The key drivers for the dip in fundraising were the macroeconomic environment and changes to pensions," he says.
One headwind is the tough environment for small UK companies. “While the recession arrived much later and was considerably shallower than many forecasters had predicted, the headwinds early-stage businesses faced from sluggish growth, cost inflation and rising financing costs dampened investor appetite,” Hollands says.