Gartmore has pulled the launch of its Premier VCT having raised just over £800,000. This leaves the ...
Gartmore has pulled the launch of its Premier VCT having raised just over £800,000. This leaves the Isis Technology VCT and Teather & Greenwood's Aim VCT as the most likely venture capital trusts to be pulled out of the market before the end of the tax year in April, according to tax efficient research company, Allenbridge.
These trusts face the threat of potential withdrawal because they have failed to attract sufficient investment to allow them to operate profitably.
At the time of going to press, Gartmore Premier, to have been managed by the company's head of UK smaller companies, Gervais Williams, had raised just £819,000, Isis Technology had raised £321,000 and Teather & Greenwood £750,000.
David Knight, director of tax shelter research at Allenbridge, said: 'VCTs have very high start-up costs and require a certain amount of funding to cover costs and operate in an efficient manner. Managers set minimum investment levels above which a fund can operate profitably, and this tends to be around £1m. If this level is not reached, or only just breached, then the boards of directors may decide they are not viable and close them.'
Knight believes that in order to give investors in these products sufficient time to invest their money in another tax efficient vehicle, a decision on whether to continue needs to be made by the end of February or beginning of March at the latest. Any company that makes a decision to withdraw too close to the end of the tax year deadline on 5 April risks blackening its name in the VCT market. Attention has been focused on the viability of some VCTs following the Pathway One VCT's board of directors' decision to withdraw from the market recently.
All-day event on 24 April
Consequences could be more severe than in stress tests
AFH has six segregated mandate funds
Variable operating expenses