Venture capital trusts (VCTs) are likely to raise over £440m for investors in the current 2000/01 tax year, compared with £200m in 1999/2000.
This is good news for businesses seeking equity capital in the £1m to £6m range, where VCTs are active. VCT management teams have been receiving a higher-than-ever deal flow, especially from firms of accountants. They are filling a gap in the market, as many established venture capital organisations concentrate on larger management buy-outs and buy-ins.
Some VCTs, such as Capital for Companies, Singer & Friedlander AIM and Aberdeen Growth, invest a proportion of their funds in securities that are dealt on the Alernative Investment Market. Others - Baronsmead, Downing Classic, Trivest - devote a larger proportion to investment in unquoted situations.
More information about VCTs can be found at www.taxshelterreport.co.uk, www.trustnet.co.uk and www.bestinvest.co.uk. Contact information for VCTs can be found on the British Venture Capital Association website at www.bvca.co.uk.