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A £3 Billion Market No IFA Can Afford To Ignore


  • By Jason Stockwell
  • VCT

If you want to learn more about EIS and VCT investing, Modwenna Rees-Mogg tell us why you can’t afford to miss this VCT & EIS Investor Forum expo


There’s no question why demand is high. VCTs offer the next step after pension contributions and filling up the ISA allowances. Now the secondary market is improving, there is even more reason to take them seriously

In 2010 when the VCT & EIS Investor Forum was founded, a mere £350 million was raised by VCTs, and EIS hitting just over £1 billion for the first time.

Fast forward, and both markets have now doubled in size: VCTs raised £728 million in 2017/18 and EIS just shy of £2 billion. In 2018/19 could we see another 10% to 20% growth?

There’s no question why demand is high. VCTs offer the next step after pension contributions and filling up the ISA allowances. Now the secondary market is improving, there is even more reason to take them seriously.

Meanwhile, core EIS investment continues to grow nicely, after excluding the outlier investment that went into solar for a few years. With 30,000 investors using the scheme, no IFA or wealth manager can dismiss the top tier fund managers and single company opportunities, without risking their clients seeking advice elsewhere on which investments to pick. And there are some great investment growth stories making this part of the market more than just about sheltering income tax and inheritance tax (IHT).

Differences have also emerged between the VCT and EIS markets. In the former, choice is more concentrated; back in 2010 there were 128 VCTs to choose from versus c.75 now and in terms of fundraisings, 78 raised in 2010 versus 38 in 2016/17.

This year’s VCT fundraising season has already started strongly, with Baronsmead, Calculus and Maven, as well as the best AIM VCT managers such as Hargreave Hale and Octopus, already out in the market. But it’s good also to see fresh faces, like Seneca, which plans to apply its strong track record in EIS investing to the VCT structure. We welcome the news that managers like Triplepoint are also opening offers soon.

In contrast to VCTs, the growing number and variety of high quality EIS players is noticeable.

Award-winning firms such as Deepbridge, Par Equity and Symvan, have joined the likes of Blackfinch, Calculus and Oxford Capital as the ones not just to watch, but to back.

To compensate for the risks of VCT and EIS investing you need good returns. To make the exciting journey bearable, you need to be comfortable the people offering you the ride know what they are doing.

So, it’s a good idea know the sector and other experts.

As a non-executive director at Albion Technology & General VCT, I was delighted to hear of Albion Capital’s recent 10x return on the exit of portfolio company, Grapeshot. And I always enjoy catching up with EcoMachines Ventures because it specialises in investing in robots.

To compensate for the risks of VCT and EIS investing you need good returns. To make the exciting journey bearable, you need to be comfortable the people offering you the ride know what they are doing

If you want to know more about medtech why not come along to our Forum and have lunch with Deepbridge Capital? And, if you are a bit of a Trekkie, on 30 November, there will be a chance to learn why Par Equity backed Snap40, which sells wireless arm-bands that monitor you continuously for warning signs that something is going wrong with your health.

At the Forum we will be covering emerging trends that private clients need to know about, such as which areas of direct lending are winning, and which are losing. And the big one which we will focus on is the rise and rise of single company EIS opportunities. It will take less than a day to obtain the information you need to know.

To celebrate the great British companies that investors back through VCTs and EIS, this year we are launching an amazing expo to showcase the best of the best. In our ‘playroom’ delegates will be gaming with VR; in the ‘lab’ there will be white coats and tech experiments; in the pop-up shop, Christmas gifts will be on sale, and, in the cinema, we will be showing some great EIS-backed films.

And it is only right, surely, to have a proper ‘schoolroom’, with 40-minute lessons on different aspects of direct and tax efficient investing, headlined by Goji Investments and Stellar Asset Management.

We designed everything – from the electronic delegate badges to the insightful content of the Forum – to make it an unforgettable experience for the IFAs, wealth managers and private investors who attend. The 500 delegates who booked last year will attest to this.

Why not come along yourself this year and help us get the numbers up to 750? We would love to see you there. To find out more, and get a ticket, go to www.thevctandeisinvestorforum.com

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