The VCT will be managed by MTM Capital Partners, which has spent the past 15 years developing links with China to promote British trade and investment in the region.
MTM is led by Geoffrey Isaac and Rikky Hasan, who founded MTM Corporate Finance in 1989. When running this VCT, they will be joined by Stephen Hill who has 18 years experience as a private equity fund manager.
At least 70 per cent of the portfolio will be held in qualifying companies doing business with China and the rest will go into in UK gilts, bonds and cash deposits managed by HSBC. It is expected that the initial portfolio will contain between 12 and 15 qualifying holdings.
The investment team will draw on a research database which includes economic and political data on China, technology assessments and market trends. They will use their contacts to identify UK companies that have brands, products, services or technology which are appropriate for the Chinese economy.
This may include service companies seeking licenses and approvals to conduct business in China. Priority will be given to companies with technology, innovation and brands which have the potential for high revenue.
Aim companies that can be enhanced by entry into Chinese market will also be considered, but there will be no investment in military or related equipment.
This VCT provides a novel way for investors to benefit from the rapid growth in China and get VCT tax reliefs.
However, the companies it invests in may still be affected by factors such as political risk and currency exchange fluctuations, which does not affect firms which focus on the UK market.