VCT fund-raising continued rising last year, AIC says

Venture Capital Trusts raised the second-highest figure ever on record last year, according to industry figures.

The sector raised £542.0 during the 2016/17 financial year, which represents an 18% increase from the figure for the previous year, although it remained below the £779.0m raised in 2004/5 when income tax relief was hiked from 20% to 40%.

Assets under management by VCTs also rose, from £3.6bn last year to £3.9bn.

Ian Sayers, Chief Executive of the Association of Investment Companies (AIC) said: "These figures are a testament to the ongoing demand for VCTs by investors, boosted by the pensions restrictions and attractions of a tax-free yield, and the ability of managers to adapt to the new investment rules.

"But most importantly this is great news for UK smaller companies who are accessing the finance and expertise they need to grow. VCTs have an excellent track record of providing scale-up capital to smaller companies, creating growth, jobs and innovation. The growth of smaller companies is vital for the UK’s economic success and some of the businesses VCTs support develop into household names."

Funds raised by VCT's hit a low of £154.0m in the 2008/9 financial year.