VCTs close financial year with near record high, with Howard Kennedy acting for 75% of all funds
The UK VCT market has closed the 2016/17 financial year with the second most successful year on record.
A total of 18 funds came to market raising over £500m, bettered only in 2004 when VCTs raised £779m. Law firm Howard Kennedy acted for 14 funds which collectively raised over £375m.
Keith Lassman, Partner and Head of Capital Markets, said:
“This is truly an impressive performance by VCTs and reflects the demand and appetite to invest in UK plc.
“What makes it all the more remarkable is that it follows tough tax changes that restrict investment by VCTs essentially into younger riskier businesses, whereas in the past most VCTs have invested in more mature businesses.”
VCTs can no longer make investments in management buy-outs and in businesses more than seven years old, or 10 years for hi-tech businesses.
“Whilst this will have had some impact on VCT investment strategies, VCT managers have been quick to adapt. In 2016, a record 650,000 new businesses were started in the UK, many hungry for investment. VCTs will provide a key strand to the Government’s drive to encourage ‘patient capital’ investment in innovative businesses.
“Investor demand for tax-efficient investments continues to grow, and VCTs are very well placed to capitalise on the restrictions introduced on pension funds.”
Howard Kennedy has over the past five years acted for 80 per cent of all VCTs to come to market. It remains the only English law firm able to act as both sponsor and legal adviser to VCTs through its wholly owned FCA authorised subsidiary, Howard Kennedy Corporate Services LLP.
About Howard Kennedy
Howard Kennedy has 53 partners and numbers 350 people in total and works alongside national and international clients across many disciplines, including banking, corporate and commercial, family, finance, employment, dispute resolution, intellectual property, private client, real estate and tax. Howard Kennedy has particular focus on the Financial Services, Media and Technology, Real Estate, Retail and Leisure, Sports Individuals sectors.
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Daryl Atkinson, Business Development & Marketing DirectorHoward KennedyDaryl.Atkinson@howardkennedy.com