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Sweet VCT takes second bite of the cherry

Teather & Greenwood is issuing further shares in its Alternative investment market (Aim) venture capital trust (VCT).

The company expects thus year&#39s VCT season to be slow, so it is issuing C shares early in an attempt to raise a maximum of £10m. This VCT invests mainly in companies quoted on Aim that have above-average income and growth potential.

Former Invesco Perpetual fund manager John Sweet is responsible for the VCT and he will look for opportunities within a wide range of Aim sectors. He managed Invesco Perpetual&#39s UK smaller companies unit trust and UK smaller companies investment trust before joining Teather & Greenwood in October 2001.

Aim stocks tend to have greater growth potential than larger quoted companies, but during adverse stockmarket conditions, they can suffer more. This is highlighted by the latest statistics from the London Stock Exchange, which show that the FTSE Aim index fell by 25.4 per cent between January and August this year. In comparison, the FTSE All-Share index fell by 18 per cent over the same period.

With this VCT, Teather & Greenwood is making use of its research and corporate finance experience in the Aim and VCT markets. It believes the Aim market is now close to the bottom of the cycle and predicts a recovery during the next two years.

Although Aim VCTs are less risky than those which invest in companies at an earlier stage of development, the consensus is that it will be difficult for any VCT to raise money this year. Volatile stockmarkets have affected investors&#39 confidence and many people will not have the capital gains problems that they had a few years ago.

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