Venture Capital Trusts

Venture Capital Trusts (VCTs) were created in 1995 to boost investment in smaller unquoted companies, there is now a good length of track record with a wide disparity in returns. The tax incentives are generous and of particular interest for investors liable to higher rates of Income Tax who are seeking an income.

Time to act now on VCTs

Uncertainty around the continuation of UK tax reliefs for Venture Capital Trusts has driven several funds to announce large fundraises early this year. In her latest blog post, Sophie Kennedy, EQ Head of Research, explains what is driving these changes and why offers may close earlier than usual in 2017.

Who are VCTs designed for?

VCTs are not a suitable option for everyone, but can be appropriate for experienced investors who are willing to take on a degree of risk within a diversified portfolio. We consider them to be a complementary option for investors who:

  • are Higher Rate (40%) or Additional Rate (45%) Income Tax payers
  • wish to supplement their portfolio having fully contributed to both their pension and ISA
  • currently own a diversified portfolio and are willing to invest in an inherently risky asset class, with the added incentive of tax breaks
  • are comfortable with a long holding period
  • are resident in the UK

EQ has put together an introductory guide to Venture Capital Trusts which is available to download for free:

Selected VCT offers

The following Venture Capital Trusts are open for investment:
* Includes any discount offered by the promoter.
Name EQ review Offer type Closing dates Raised / sought Min. investment EQ discount*
Albion VCT Top-up 5 April 2018
24 Aug 2018
£0.0m / £32.0m £6,000 New Investor 0.5% (pre-31 Oct)
Existing Investor 1.0% (pre-31 Oct)
View offer
Five of the six Albion VCTs available within this top-up offer invest in asset-backed and growth opportunities across a range of sectors.
Downing FOUR Healthcare VCT New VCT 30 September 2017 £8.7m / £10.0m £5,000 2% View offer
Downing FOUR VCT Healthcare Share class will focus on investing in innovative healthcare and biomedical companies.
Elderstreet VCT Top-up 29 September 2017 £16.5m / £20.0m £6,000 2.5% View offer
Elderstreet VCT is an established generalist VCT having launched in 1998, however remains a concentrated portfolio of 24 underlying investments and small in size.
Foresight 4 VCT Top-up 5 April 2018
30 April 2018
£3.4m / £50.0m £3,000 Existing Investor (pre-30 Nov) 4.5%
New Investor (pre-30 Nov) 4.0%
View offer
Foresight 4 VCT is a generalist VCT, investing across a broad range of sectors. It has recently merged with Foresight 3 VCT.
Mobeus VCTs Top-up 4 April 2018 £10.1m / £80.0m £6,000 1.75% (pre-3 Nov) View offer
Four established VCTs, predominantly invested in management buyouts (MBOs) of established profitable companies.
Northern VCTs Top-up 4 April 2018 £0.0m / £60.0m £6,000 2.25% View offer
Three established and mature VCTs, currently predominantly invested in MBOs but with a new strategy focused on technology enabled growth opportunities.
Octopus AIM VCT 1 & 2 Top-up 5 April 2018
15 June 2018
£18.2m / £30.0m £5,000 Existing Investor 3.5%
New Investor 2.5%
View offer
The Octopus AIM VCTs predominantly invest in companies listed on AIM, and offer investors access to mature and diverse portfolios.
Octopus Titan VCT Top-up 5 April 2016
22 August 2017
£0.0m / £200.0m £3,000 New Investor 4.5% (pre-14 Nov)
Existing Investor 5.5% (pre-14 Nov)
View offer
A large private equity VCT investing in early stage companies, with a legacy bias to the technology sector.
Unicorn AIM VCT Top-up 26 September 2017 £21.0m / £30.0m £2,000 Existing Investor 3.5%
New Investor 3.0% (pre-7 Sep)
View offer
Unicorn AIM VCT is the largest single AIM VCT and offers investors exposure to a mature and established portfolio of companies listed on AIM.

How to invest

If you want to benefit from 30% initial tax relief you must subscribe for new VCT shares via a public offer. You can download the prospectus and application forms using the links above.

Important Information

The information set out above is included for information purposes only and is not an offer or an invitation to buy or sell or a solicitation of an offer or invitation to buy or sell or enter into any agreement with respect to any security, product, service or investment. Any opinions expressed do not constitute investment advice and independent advice should be sought where appropriate. All information is current as of the date of publication, subject to change without notice, and may become outdated over time. Links to third party sites or pages are for information purposes only and such sites and pages are not part of this website or the responsibility of EQ Investors Limited and have not have been reviewed or verified by EQ Investors Limited. Following links to or from any other sites or pages shall be at your own risk. Please note that tax rates and bases can change without notice.

VCTs should be considered to be high risk investments suitable only for experienced investors who can afford to incur losses.