By Pascal Dowling The last year of the old millennium has been the best year since 1995 for venture...
By Pascal Dowling
The last year of the old millennium has been the best year since 1995 for venture capitalists, according to Martin Churchill, director of research at the Allenbridge Group.
In the last week of November alone £35m was invested in VCTs. And John Gregory, manager of the Enterprise VCT told Investment Week in December that some £80m had already been invested in VCTs, even before the usual end of tax year rush.
According to Churchill, the behaviour of investors this year has been affected by shifting priorities, which have moved the market's focus to making the most of capital gains tax allowances.
Despite the large number of new trusts on the drawing board, Churchill believes the changes which have affected the VCT market could result in investors being left behind on VCTs as issues fill up more quickly. He said: "There is a common misconception that if an issue straddles both tax years, there will be shares available for investors wanting to invest for the following year. But issues are all on a first come, first serve basis, no shares are reserved for the following tax year."
In a report published by the Allenbridge Group, Churchill ranks the £53m Quester 4 fund first in the generalist sector, using the pedigrees of Quester 1 and 2 as a basis for assessment. Quester 4 is now closed.
Other generalists he favours include the technology orientated Downing Classic 3, and the TriVest VCT, which he says is particularly suitable for investors with a small amount to invest. Recommended Aim trusts include the Aim VCT, managed by Friends Ivory & Sime, ranked first by Allenbridge, and Close Aim, which he described as a fund run by a "well respected fund manager with a well structured management incentive".
Churchill said: "The Close VCT raised more than £14m in just three weeks when it opened in October, confirming our view that this season will be a record one for funds raised by VCTs.
"Close is now nearly up to the £20m it is seeking and is only taking funds for shares which will be allotted on 5 March this year. Any investor with a capital gain realised before 6 March 2000, will not be able to shelter it in Close Aim."
The Aim VCT from Friends Ivory & Sime is also closed, leaving Capital for Companies as one of the only available vehicles that allows investors to join a well established and invested Aim-based VCT, said Churchill.
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Total of 72 accredited firms
23% fall since Q1
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Including advice firm Chadkirk WM