VCT fundraising in 2016-17 – infographic
Archived article: please remember tax and investment rules and circumstances can change over time. This article reflects our views at the time of publication.
The total amount raised by VCTs in 2016/17 demonstrated the strongest demand in a decade. But which offers raised the most? Which closed earliest – and which raised money the fastest?
The answers might surprise you. We put together an infographic showing the offers that opened in the 2016/17 tax year.
Offers are listed in the order they closed. The size of the circle indicates the amount raised. Two circles indicates over-allotment, where the initial target is met and the offer is extended.
Click on the image below to open a larger version of the chart.
Notes on this chart
- The figures are based on data supplied to Wealth Club directly by the VCT managers
- For each VCT the ‘meteorite tail’ begins at the opening date. The circle is centred either at the date the offer closed, or the tax year deadline. We haven’t plotted intermediate fundraising amounts and dates, just the open, close and overallotment dates where applicable.
- Where several VCTs raised funds in parallel these are represented as one offer (e.g. the six Albion VCTs, three Northern VCTs and two each of Amati, Hargreave Hale and Octopus AIM VCTs). Where VCTs from the same manager raised funds separately these each have a plot on the chart (e.g. British Smaller Companies).
- The British Smaller Companies VCT top-up offer was fully subscribed by 28 February so this is where we plotted the closing date; the offer remained open until 6 March but subscriptions were allotted by ballot.
- Data tables can be found at the foot of this article.
Fund raising leaders
Octopus Titan VCT stands out as the individual VCT that raised the most – £120 million, including a £50 million over-allotment. This is perhaps not surprising, considering that it raised £100 million last year and is the UK’s largest VCT by assets under management (£426 million). It also allows monthly investment. This offer was open the longest, commencing 23 August 2016 and closing after over-allotment on 6 March.
At 3× the size of the next largest offer, the gulf in fund raising reflects the high profile of this VCT, which has had some notable exits in recent years, including the first VCT-backed £1 billion company, Zoopla Property Group. Remember, past performance is not a guide to the future.
VCT investors were warned that capacity in many popular funds would be scarce – and so it proved, with closing dates arriving earlier than in recent years.
Of the 20 offers shown, 9 had closed by the end of February. By the end of March, 16 had closed. Only four VCTs were still open at the tax year deadline.
The first to close was the British Smaller Companies 2 VCT top-up offer on 10 January, setting the scene for an earlier rush for VCTs than in previous tax years. Both British Smaller Companies VCTs met their top-up offer targets from existing investors.
ProVen Growth & Income, managed by Beringea, was the next VCT to close (31 January), and raised the third largest amount (£39.2 million). This was not only higher than last year’s fund raise by the same manager (£33.8 million for ProVen VCT) but also closed much earlier in the tax year, reflecting the urgency of investor demand. Shane Elliott of Beringea commented that the offer raised the majority of funds before January thanks to an early-bird offer on the fund’s initial charge. The VCT triggered an over-allotment on 18 January; unlike most other offers the managers decided to commit to a closing date rather than let the offer run to its maximum amount, so that late-stage subscribers would not be disappointed.
Foresight VCT raised the second largest amount at £40 million, over a period of just 46 days (2 February to 20 March). This was the third fastest overall raise – and once the initial target was met, it raised the quickest over-allotment (£20 million in 12 days, a rate of £1.67M/day).
The fastest overall raise was by the three Northern VCTs, which met their combined target of £12.9 million within 48 hours from existing investors. These top-up offers had been announced nearly four weeks in advance of the opening date, which contributed to the speed of the offer selling out – at a rate of £6.45 million per day it was by far the most rapid rate of subscription. (This is why its meteorite tail doesn’t appear on the chart; it’s obscured by the size of the circle.)
Unicorn AIM VCT also raised its target rapidly – £15 million in 15 days. This was the fastest raise among the AIM sector of VCTs. Unicorn is well known for smaller company investing (it also runs unit trusts in this sector) and AIM in particular; the same manager, Chris Hutchinson, also runs the Unicorn AIM IHT ISA. The largest fundraise in the AIM sector was £25 million by Hargreave Hale across its two VCTs.
Triple Point Income stands out as an offer that noticeably increased its fundraising velocity after announcing an over-allotment (from £0.18M/day to £0.88M/day, a 4.9× increase). Albion’s offer by contrast is the only one that slowed during over-allotment (from £0.40M/day to £0.34M/day); we’re not sure why this might be, however there was an early-bird offer that attracted initial subscriptions quickly. It was the fourth largest offer in terms of total sum raised across its six VCTs.
Finally, Elderstreet VCT’s £14.8 million raise may not stand out on the chart but it’s a significantly higher sum than this VCT has raised in previous tax years. The directors chose to raise a higher amount after joining forces with Draper Esprit, which potentially opens the doors to a higher deal flow.
Current VCT investment opportunities
Although many of the offers available last tax year have closed, some VCTs are currently open for investment.
If you are comfortable with the risks and believe VCTs may be for you, there are two good reasons to consider investing at the start of the tax year rather than waiting until 2018. First, you could receive an extra year’s worth of dividends (variable and not guaranteed). Second, the tax relief can be paid to you during the year rather than reclaimed back afterwards via your tax return.
Tables: VCT offers 2016-17
Fundraising amounts and dates
|VCT||Opened||Announced overallotment||Fundraising at date1 (£M)||Closed||Fundraising total2 (£M)|
|British Smaller Companies 2||03/01/2017||-||-||10/01/2017||4.3|
|ProVen Growth & Income||21/09/2016||18/01/2017||30.0||31/01/2017||39.2|
|Unicorn AIM VCT||19/01/2017||-||-||03/02/2017||15.0|
|Maven Income & Growth 6||09/12/2016||17/01/2017||6.0||07/02/2017||8.0|
|Octopus AIM VCTs||06/02/2017||-||-||28/02/2017||8.6|
|British Smaller Companies||10/02/2017||-||-||28/02/2017||4.3|
|Hargreave Hale AIM VCTs||14/12/2016||-||-||15/03/2017||25.0|
|Amati AIM VCTs||09/11/2016||-||-||23/03/2017||8.0|
|Triple Point Income||07/10/2016||10/03/2017||15.0||27/03/2017||30.0|
|Foresight 3 VCT||22/03/2017||-||-||31/03/2017||3.4|
|Downing FOUR Generalist||08/12/2016||29/03/2017||20.0||05/04/2017||27.3|
|Downing FOUR Healthcare||08/12/2016||-||-||05/04/2017||5.8|
- If a VCT announced overallotment, how much had been raised at that point
- Total funds raised at closing date or tax year end, including over-allotment
Rate of fundraising
|VCT||Days open (total)||£M total / day||Days of overallotment||£M overallotment / day|
|British Smaller Companies 2||7||0.61||-||-|
|ProVen Growth & Income||132||0.30||13||0.71|
|Unicorn AIM VCT||15||1.00||-||-|
|Maven Income & Growth 6||60||0.13||21||0.10|
|Octopus AIM VCTs||22||0.39||-||-|
|British Smaller Companies||18||0.24||-||-|
|Hargreave Hale AIM VCTs||91||0.27||-||-|
|Amati AIM VCTs||134||0.06||-||-|
|Triple Point Income||171||0.18||17||0.88|
|Foresight 3 VCT||9||0.38||-||-|
|Downing FOUR Generalist||118||0.23||7||1.04|
|Downing FOUR Healthcare||118||0.05||-||-|
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