Debunking the VCT myths (FT Advisor)

by Eliot Kaye, Director - Puma Investments


Venture Capital Trusts (VCTs) are gaining more and more prominence in many people’s investment portfolios, as investors seek to invest as tax efficiently as possible.

The major concern expressed by many potential VCT investors is, put succinctly, “once I’m in, how do I get out?”

VCTs are well regulated, fully listed investment vehicles but the secondary market in VCT shares is patchy at best. So, while there are very attractive tax breaks when investing in a VCT, the fear of being perennially stuck in an illiquid investment does deter many investors and their advisers from including VCTs within their portfolios.

Moreover, many potential investors get scared off by the “V” in VCTs, concerned that these funds only make very high risk equity investments in un-proven, early-stage businesses.

For the optimist or dreamer, the case for investing in small companies is the opportunity to participate in the next Facebook and reap the potential rewards of the huge upside of a young, dynamic company.


See full article on the FT Advisor website.