Northern VCTs closed their £36 million fundraise this week
Of the £848 million of VCT capacity currently available this tax year there is £206 million remaining
Among Wealth Club “Featured” offers there is £77 million in confirmed capacity remaining

Nicholas Hyett, Investment Manager at Wealth Club, commented;

“This week saw the Northern VCTs fill their offer for this tax year. As seen in previous tax year ends we expect to see a flurry of VCT offers follow suit and close in the next few weeks.

The decision by a few large VCTs not to raise money this tax year, and smaller offers from some other players means capacity is 6% lower than in 2023/24. Popular offers are filling quickly, with £206 million of capacity across the industry, but just £77 million across Wealth Club’s featured offers.

Once a VCT has filled that’s it for the year, and by the time the last few days of the tax year come round we usually see a much reduced selection of offers available. If investors are planning on backing a VCT this tax year it pays to do so early.”

Wealth Club Featured VCT Offers

Albion VCTs – 18% of currently available capacity remaining

The three Albion VCTs have quite a broad portfolio, investing across the fintech, software and healthcare sectors. They have enjoyed a very strong spell recently, selling their stake in email security business Egress for over £60 million last summer, while the VCTs’ largest holding Quantexa was valued at $1.8 billion at its most recent fundraising.

Baronsmead VCTs – 39.8% of currently available capacity remaining

The Baronsmead portfolio is probably the most diverse of all VCTs. The two VCTs have a portfolio of 85 companies spread across early-stage growth companies, legacy management buyouts and AIM, as well as investing in three Gresham House managed UK equity funds. That diversification, together with significant exposure to more mature businesses, has historically made Baronsmead something of a gateway VCT for investors new to the sector.

Unfortunately, listed UK smaller companies have been a tough place to invest in recent years. However, that could present an opportunity going forwards. With 65% of the portfolio invested in UK listed companies, a turn in sentiment towards the UK has the potential to translate quickly into substantial gains for the VCT.

Maven VCTs – 24.0% of currently available capacity remaining

The Maven VCTs are established and well-diversified trusts which primarily target private companies across the UK regions. They actively seek to manage downside risks and focus on sectors the manager considers defensive and somewhat insulated from changes in discretionary consumer spending, such as cybersecurity, healthcare, data analytics, fintech and software. This approach has served the VCTs well, with a flurry of recent exits.

Molten Ventures VCT – 13.4% of currently available capacity remaining

Molten Ventures Plc is one of the UK’s best known venture capital investors, backing breakaway successes like Wise and Revolut.

The VCT is managed by the same team that manage the Plc’s own balance sheet, and invests alongside the firm in VCT qualifying deals. It backs businesses in the consumer technology, enterprise technology, deep tech & hardware, and digital health & wellness sectors, and has a portfolio of 35 companies.

The VCTs position as part of the wider Molten Ventures stable gives it access to technical expertise and deal flow that are rare in smaller, independent VCTs.

Octopus AIM VCTs – 5.3% of currently available capacity remaining

AIM has been through a torrid time and the Octopus AIM VCTs have not escaped unscathed, with a total return of – 41.3% over three years. That’s no surprise given the VCTs mandate to invest in high-growth companies raising money on AIM – exactly the types of business that have been hit hardest. However, the VCT continues to benefit from the largest team of listed company specialists in the VCT market, and should sentiment towards UK smaller companies turn, it would be well placed to capitalise on a recovery.

Octopus Apollo VCT – 5.3% of currently available capacity remaining

Apollo VCT is a specialist business-to-business (B2B) software investor. It tends to back businesses that are slightly more mature, typically already reporting £2-£8 million of sales a year. Backing more mature businesses in high margin, cash generative software businesses might be seen as boring, since it generally doesn’t have the same potential for explosive growth you see in VCTs that back smaller higher growth companies. However, its high-quality investments have seen it weather the recent downturn in venture capital better than many peers – with a total return of 49% over the five years to December 2024 (not including tax relief).

Pembroke VCT – 35.7% of currently available capacity remaining

Pembroke VCT is a generalist investor, but unlike many VCTs it has particular expertise, and has enjoyed significant success, in backing consumer brands. Past successes have included women’s fashion brand ME+EM, and fresh pasta delivery service Pasta Evangelists. LYMA, the VCT’s current largest investment accounting for 15.1% of the portfolio, has developed a medical grade laser for at home use to improve skin health which was voted one of TIME Magazine’s inventions of the year in 2023.

Unicorn AIM VCT – 20.0% of currently available capacity remaining

Some large and strong performing private holdings, notably Interactive Investor, have helped Unicorn avoid the worst of the AIM market sell off, though it has not escaped entirely with the VCT falling 32.7% in the year to December.

The team generally look to back more established companies, though the nature of an AIM VCT is that they are limited to some degree by what kinds of company are raising money. Unquoted companies continue to account for 21% of the portfolio and the manager will look to invest in mature private companies that are considering listing on AIM where it sees opportunities. Nonetheless, large investments in AIM could perform well if sentiment towards UK smaller companies were to turn.