A £3 BILLION MARKET NO IFA CAN AFFORD TO IGNORE 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
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GB Investment Yearbook · September 2018
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.
