Stakeholder pensions will not be able to buy into venture capital funds without putting themselves a...
Stakeholder pensions will not be able to buy into venture capital funds without putting themselves at a disadvantage.
The British Venture Capital Association (BVCA) is urging the Government to set up a working party to investigate ways to modify the tax system to put an end to this.
A report released last week by the BVCA, said the taxation procedure of venture capital funds under a limited partnership is complicated. These problems are amplified when insurers invest via a fund of funds. The administrative burden also becomes an issue for stakeholder pensions, which have a built in charge cap. Unless current practices are modified, this cap will probably bias the providers of these products against venture capital and private equity the BVCA said.
The trade body has produced a report on the issue prepared by the London Business School, and this has been submitted to Paul Myners, chairman of Gartmore and head of the review into institutional investment.
One of the issues to be examined by Myners is why pension funds and insurance companies invest only 1% of their funds in venture capital, compared to US investors, who put around 5% into the same type of assets.
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