AIC responds on VCT announcements in Budget

AIC responds on VCT announcements in Budget .

19 March 2014

AIC responds on VCT announcements in Budget.

The Association of Investment Companies (AIC) has responded to today’s announcements in the Budget affecting Venture Capital Trusts (VCTs).

Ian Sayers, Director General, Association of Investment Companies said: “The Government continues to support the VCT sector and recognises its role as providers of finance to SMEs. Sector assets are at an all-time high and demand for the VCT sector is strong, with £300 million raised in the current tax year to date.

”The Government’s commitment to VCTs was shown by the confirmation that investors will be able to buy VCT shares via platforms. This will make it more straightforward for advisers and investors to purchase VCT shares in the same way that they buy other investment products.

“As expected new rules are to be introduced on enhanced share buy-backs and dividend payments arising from a reduction in share capital. Other changes prevent VCTs and other enterprise schemes from investing in companies which receive certain renewables subsidies.

“We are confident that VCTs will successfully manage the impact of these changes, as they have done in the past, and will continue to meet the needs of investors.”

The AIC’s VCT research report, “Investing for the future”, published last year found that:

  • VCTs are patient investors, with the average investment held for around six years, though some companies remain in the portfolio for ten years or more.
  • Investee companies created on average 52 new jobs following investment.
  • Investee companies created on average £10.8m of new turnover following investment.
  • 78% of investee companies had a representative of the VCT fund management group team on their board, illustrating that it is the combination of investment and business experience that provides sustainable benefits to the economy.
  • 41% of investee companies exported.
  • 31% of investee companies reported an investment in research and development (R&D) in the last 12 months, with an average spend of just over £1m per company.

For further information please contact:

  • Annabel Brodie-Smith (AIC: Communications Director) – 020 7282 5580
    07798 624449
  • Jemma Jackson (AIC: PR Manager) – 020 7282 5583
    07776 204610
  • Lisa Flounders (AIC: PR and Marketing Executive ) – 020 7282 5551

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Notes To Editors

  • The AIC received information from 399 VCTs, but not all responded to the entire survey: 254 shared their turnover information, 271 their employment data, 322 gave data on exports, 322 also shared data on R&D and 248 shared data on tax.

  • The Association of Investment Companies (AIC) was founded in 1932 to represent the interests of the investment trust industry – the oldest form of collective investment. Today, the AIC represents a broad range of closed ended investment companies, incorporating investment trusts and other closed ended investment companies and VCTs. The AIC’s members believe that the industry is best served if it is united and speaks with one voice. The AIC’s mission statement is to help Members add value for shareholders over the longer term. The AIC has 338 members and the industry has total assets of approximately £113 billion.

  • Disclaimer: The information contained in this press release does not constitute investment advice or personal recommendation and it is not an invitation or inducement to engage in investment activity. You should seek independent financial and, if appropriate, legal advice as to the suitability of any investment decision. Past performance is not a guide to future performance. The value of investment company shares, and the income from them, can fall as well as rise. You may not get back the full amount invested and, in some cases, nothing at all.

Natalie Dickinson

PR & Marketing Natalie Dickinson