Coming soon
In August 2025 the boards of the two British Smaller Companies VCTs announced their intention to launch a new combined offer for subscription for the 2025/26 tax year – to raise £60 million with an overallotment facility of £25 million. The prospectus is expected to be published on or around Thursday 25 September, with applications expected to open a week after.
You will be able to download documents and apply online here.
British Smaller Companies VCT (BSC) and British Smaller Companies VCT 2 (BSC2) are longstanding generalist VCTs managed by YFM Equity Partners. They have combined net assets of £415.4 million (June 2024) and a portfolio of 42 companies.
The VCTs share the same investment strategy and focus on technology companies, with a bias towards data, tech-enabled services, and new media. An example is Matillion, which was most recently valued at over £1 billion (November 2022) and is currently the largest holding within both VCTs.
In the five years to 30 June 2025, the two VCTs generated a NAV total return of 74.3% (BSC) and 68.6% (BSC2). Over the same period, the VCTs have paid cumulative dividends equivalent to 48.4% (BSC) and 48.0% (BSC2) of the starting NAV of each VCT – dividends are variable and not guaranteed.
- Seeking to raise £50 million with a £25 million overallotment facility
- The VCTs do not specify a dividend target
- Minimum investment £6,000 (you can split your investment 60/40 between the two VCTs or invest in just one)
Important: The information on this website is for experienced investors. It is not a personal recommendation to invest. If you’re unsure, please seek advice. Investments are for the long term. They are high risk and illiquid and can fall as well as rise in value: you could lose all the money you invest.
The manager
The British Smaller Companies VCTs are among the longest-standing VCTs – BSC launched in 1996 and BSC2 in 2001.
The manager, YFM Equity Partners (“YFM”), has been investing in young, fast-growing companies for more than 40 years. It was one of the first asset managers to launch a VCT and is now one of the most recognised and well-regarded names in the industry.
Established in Yorkshire in 1982, YFM is a specialist private equity business independently owned by the senior management and investment team, with over £680 million in assets under management across its VCTs and private equity funds (August 2024).
Its 60+ team, including more than 40 investment professionals, are located across five offices (Leeds, London, Manchester, Birmingham, and Reading).
The investment team is led by Executive Chairman David Hall, a chartered accountant, who joined YFM in 2000 and has over 30 years of private equity, venture capital, and fund management experience. The investment team is split into four sub-teams, covering two areas (North and South) and responsible for new investments or support to portfolio companies.
Meet the manager: David Hall, YFM Equity Partners
Investment strategy
Since 2010, the VCTs have co-invested alongside one another and now follow the same growth capital investment strategy.
The VCTs seek to invest in innovative businesses in established and emerging industries. Companies will typically be headquartered in the UK and have ambitions to expand internationally. At the point of investment, they will usually generate at least £1 million in turnover, but do not need to be profitable. Founders must have a clear strategy to scale the business.
The VCTs typically invest £2 to £6 million in each company.
Whilst the VCTs will consider any sector, there is a strong bias towards business services and, as a result, the combined portfolio is heavily weighted towards companies operating within the data, application software, tech-enabled services, and new media sectors.
Portfolio overview
BSC and BSC2 VCTs have combined net assets of £415.4 million (June 2024).
Due to its performance, Matillion has become the largest holding in both VCTs’ portfolios, accounting for 9.5% (BSC) and 12.5% (BSC2) of net assets. The top 10 holdings account for 32.9% (BSC) and 36.7% (BSC2) of each VCT’s net assets.
The VCTs chiefly invest across three sectors: data, application software and tech-enabled services, which together account for 71% of the combined investment portfolio (June 2024).
The current sector breakdown is shown below.
Combined portfolio sector breakdown (%)
Source: YFM, June 2024.
Example of portfolio companies
Matillion – largest holding
Founded in 2010, and with dual headquarters in Manchester and Denver, Matillion is one of the world’s leading cloud data integration platforms. Its software allows customers to extract data from a wide number of sources, load it into cloud data warehouses, and transform it into a useful analytics-ready format.
Customers include Cisco, Siemens, Novartis, Amazon and Accenture.
In 2024 Matillion was featured in the FT 1000 as one of Europe’s fastest-growing private technology companies, with revenue growth of 423.6% between 2019–2022.
The British Smaller Companies VCTs first invested £3.5 million in November 2016, and a further £0.88 million two years later, as part of a larger investment round with some high-profile US technology investors (Battery Ventures, Sapphire Ventures, Scale Venture Partners). Matillion has since completed several investment rounds from the same US investors. In September 2021, Matillion became a unicorn, having achieved a $1.5 billion valuation in its Series E funding round.
As part of that round, the VCTs realised 15% (BSC) and 20% (BSC2) of their stake. In 2022, YFM reduced its Matillion valuation in line with falls in the value of comparable listed businesses. A modest reduction of 3% followed in 2023. It remains the largest holding within both VCTs, accounting for 9.5% (BSC) and 12.5% (BSC2) of net assets (June 2024). Past performance is not a guide to the future.
Fuuse – recent investment
By 2035, all new cars sold in the UK will have to be zero emission. Other economies such as France, Germany, Sweden and Canada have set similar targets.
The growth of EV support services and infrastructure is essential to this.
This is Fuuse’s niche. Established in 2021, Fuuse has created EV charge point management software that allows customers in the public and private sectors to control, maintain, monetise and optimise their networks. For example, the Fuuse platform allows workplaces to make their chargers available to the public, set opening hours, and manage payments.
British Smaller Companies VCTs first invested £5 million in June 2024 as part of an £8.7 million funding round alongside Par Equity. The funding is expected to help fund continued growth in the UK and consider international expansion opportunities.
Exit track record
Both VCTs have a history of exits. Over the two years to June 2024, the VCTs have achieved nine full and three partial exits, generating proceeds of £80.7 million, on an investment cost of £43.1 million, an average 1.9x return. In February 2024, the VCTs realised their fourth largest position, DisplayPlan, for a total 9.6x return, details below. Past performance is not a guide to the future.
DisplayPlan – example of previous exit
DisplayPlan (now HH Global) specialises in creating and delivering permanent in-store “point of purchase” display and fixtures. Its retail clients included Nike, M&S, Samsung and Sainsburys.
YFM Equity Partners first backed the company in 2012, supporting its management buyout and providing growth capital. The business was the fourth-largest holding in both VCTs as at 31 December 2023. In February 2024, the company was sold to HH Global, a creative production and procurement company operating across 60 countries. The exit generated total realised proceeds of £19.2 million and a total return of 9.6x. Past performance is not a guide to the future.
ARRACO Global Markets – example of previous failure
As is to be expected, not all investments work out. One example is ARRACO Global Markets. Established in 2015, the business was an award-winning interdealer broker for global commodity markets.
YFM invested £3.75 million in 2020. At the time, the company had doubled revenues to £4 million and was Europe’s fastest-growing energy brokerage.
Despite the positive start, the business was severely impacted by declining trading volumes in EU Power and Gas markets as well as increased regulatory pressures. The business entered administration in 2022. The VCTs’ investments were written down to nil.
Performance and dividends
In the five years to 30 June 2025, the two VCTs generated a NAV total return of 74.3% (BSC) and 68.6% (BSC2). Over the same period, the VCTs have paid cumulative dividends equivalent to 48.4% (BSC) and 48.0% (BSC2) of the starting NAV of each VCT – dividends are variable and not guaranteed. Note, we show VCT returns over a five-year period as a minimum, where possible. Where a VCT has followed the same investment strategy for longer, we also show returns over 10 years.
The VCTs have not set a specific target dividend.
NAV and cumulative dividends per share over five years (p)
Source: Morningstar. Past performance is no guide to the future. Dividends are variable and not guaranteed. The bar chart shows net asset value and cumulative dividends per share for the period 31/12/2019 – 31/06/2025.
Dividend payments in the calendar year
Source: Morningstar. Past performance is no guide to the future. Dividends are variable and not guaranteed. The bar chart shows dividend per share paid in each calendar year to 30/06/2025.
Dividend yield history (% of starting NAV)
| BSC | BSC2 | |
|---|---|---|
| 2020 | 7.9% | 6.3% |
| 2021 | 12.2% | 14.5% |
| 2022 | 9.7% | 8.5% |
| 2023 | 4.8% | 5.1% |
| 2024 | 6.3% | 6.7% |
| YTD | 2.5% | 2.6% |
Source: Morningstar. Dividend yields are based on the dividends paid over the period divided by the starting NAV of the VCT in each period. Past performance is no guide to the future.
Dividend Re-investment Scheme (DRIS)
A dividend re-investment scheme is available if shareholders wish to reinvest dividend payments by way of subscription for new shares. As these are new shares they should be eligible for tax relief (you will need to claim this on your tax return or directly with HMRC) and the shares will count towards the VCT annual subscription limit.
Share buybacks
The boards intend to buy back shares at up to a 5% discount to the prevailing net asset value. This is not guaranteed – please see the offer documents for details.
Discount history
VCT shares are traded on the London Stock Exchange. Similar to investment trusts, the share price can fluctuate and can be different from the VCT’s net asset value (NAV), i.e. the value of the VCT’s underlying investments. The difference between the share price of a VCT, and its net asset value per share, is called a discount.
Based on data from Morningstar, the average discount to NAV as at 30 June 2025 was -5.6%. Over the previous five years, the average discount to NAV was -7.1%.
The discount history is based on the closing share price of the VCT at the end of each month, divided by the latest net asset value at the time. Past performance is not a guide to the future. Investors looking to sell their VCT shares may get a better price using the VCTs’ share buyback facilities, although this is not guaranteed.
Risks: important
This, like all investments available through Wealth Club, is only for experienced investors happy to make their own investment decisions without advice.
VCTs are high risk so should only form part of a balanced portfolio and you should not invest money you cannot afford to lose. They also tend to be illiquid and hard to sell and value. Before you invest, please carefully read the Risks and Commitments and the offer documents to ensure you fully understand the risks.
To retain the tax benefits, VCTs should be held for at least five years. If you sell VCT shares and reinvest in new shares of the same VCT (including any mergers) within six months, tax relief can be restricted. Tax rules can change and benefits depend on circumstances.
Both VCTs have significant exposure to one company, Matillion.
Charges and savings
A summary of the main charges and savings is shown below. The net initial charge shown includes the Wealth Club saving and any early bird discount. The investment may have additional charges and expenses: please see the provider documents including the Key Information Document for more details.
Please note, capacity – for the offer or any early bird savings – can be reached early, and we may not be notified of this by the VCT in real time.
| Full initial charge | 5% |
| Early bird discount | — |
| Wealth Club initial saving | 2% |
| Existing shareholder discount | — |
| Net initial charge through Wealth Club (new investors) | 3% |
| Net initial charge through Wealth Club (existing shareholders) | 3% |
| Annual management charge | 2% |
| Annual administration charge | See offer documents |
| Performance fee | 20% |
| Annual rebate from Wealth Club (for three years) | 0.10% |
More detail on the charges
The full initial charge shown in the table above is before any savings and discounts; the net initial charge is after available savings and discounts. When you invest through us, Wealth Club will receive commission each year (up to 0.5%). Commission is paid by the product provider so there is no additional charge to you.
Please see the provider's documents, including the key information document, for more details on the total fees and charges.
Annual rebate when you invest through Wealth Club
The British Smaller Companies VCTs include an annual rebate for Wealth Club investors, payable for the first three years.
This is a rebate of our renewal commission and should be equivalent to a percentage (shown in the table above) of your subscription. Terms and conditions apply.
Our view
The British Smaller Companies VCTs are among the most established in the market. They provide investors with exposure to a portfolio of companies with a focus on data, application software, tech-enabled services, and new media sectors. The manager, YFM, hosts an experienced and well-resourced team, and has built an enviable track record within the VCTs’ favoured sectors.
The VCTs’ portfolio includes several promising companies, such as Matillion, the data analytics business and the largest position in both VCTs, Outpost, the visual FX business, Unbiased, the financial adviser review site and Vypr, the consumer intelligence platform, now the fifth largest holding in the VCTs.
In our view, YFM continues to build on its established reputation as an experienced investor in B2B software and data & analytics businesses. The team’s area of expertise and investment strategy is well reflected in both the existing portfolio and recent investments. We believe this offer could be worth considering – experienced investors should form their own view.
This financial promotion has been communicated and approved by Wealth Club Ltd on 17 October 2024
Wealth Club aims to make it easier for experienced investors to find information on – and apply for – investments. You should base your investment decision on the offer documents and ensure you have read and fully understand them before investing. The information on this webpage is a marketing communication. It is not advice or a personal or research recommendation to buy any of the investments mentioned, nor does it include any opinion as to the present or future value or price of these investments. It does not satisfy legal requirements promoting investment research independence and is thus not subject to prohibitions on dealing ahead of its dissemination.