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VCT sales surge despite a spate of withdrawals

Venture capital trust sales rocketed by more than 50 per cent last tax year, with the established players taking the lion&#39s share of the market.

But the 2000/01 tax year was also tainted with disappointment, as more subscriptions were left unfilled and more VCTs were pulled than ever before, including one withdrawal on the last day of the tax year.

The Venture Technologies Academic Research Partners VCT, which was set to invest in research at four top UK universities, withdrew its offering on April 5, leaving investors with only a few hours to find an alternative investment. Most investors managed to switch before the end of the day but several could not be contacted.

The trust passed its minimum subscription but was pulled when the main investor from its sister institutional fund withdrew due to volatile markets. The Harvest and Seymour Pierce VCTs were both withdrawn in March after failing to reach their minimum subscriptions.

According to IFA Allenbridge&#39s Tax Shelter Report, in total, around £423m was invested in VCTs during the last tax year, which is 57 per cent up on last year&#39s £270m. But more than £185m of subscriptions were left unfilled, with several new players only just exceeding their minimum subscriptions.

LeggMason raised just £6.7m of a target £30m for its Aim VCT while Proven managed to raise only £5.6m of its £30m target. Most of the unfilled VCTs will stay open for a few more weeks, with the last trust set to close at the end of June.

Allenbridge head of res-earch Martin Churchill says: “Overall, this year has been very good for VCTs. I would be disappointed if someone like Harvest, who had a new approach to VCTs, does not come back again.”

Investment, p26


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