Harvest Venture Capital Trust has been scrapped after it failed to reach its minimum investment limit of £163.5m.
The VCT, which was sponsored by Old Mutual Securities, is the first of the current tax year to be disbanded after the industry overcompensated for last year's record sales.
In the last tax year, £163.270m was raised, bringing a raft of new entrants into the market this year – many without any previous experience in VCT management.
However, with just two weeks to go until the end of the tax year, there is still around £163.300m of subscriptions to be filled. Harvest was looking to raise around £163.20m but only managed to muster £163.800,000 since its launch at the start of January.
Hargreaves Lansdown investment manager Ben Yearsley says: “There is too much on offer this year and too many 'me too' VCTs. There is not enough money out there, and it will be the investors which lose out because VCTs will be too small.
“Harvest had set their minimum investment limit too high and I was not surprised that it failed. I do not think many others will fail because they have minimum investments of £163.1m. I would advise investors to stick with the experienced players.”