At the same time last year less than £205m had been raised, which is less than 2.3 times the amount raised in the current 2017/18 tax year.
The biggest fund raiser to date is the Octopus Titan VCT, which has raised £125m, followed by Mobeus which has raised £72.8m. Meanwhile, Northern VCTs, Baronsmead, Octopus AIM and Proven have already hit their capacity and closed.
Alex Davies, CEO and founder of Wealth Club, said the rapid rise in the amount invested can be attributed to three main reasons.
“Last year many high profile VCTs didn’t raise funds because of VCT rule changes,” he said. “Now they’ve had time to adjust and want to get out there and make the most of new opportunities.”
The pain of new pension restrictions which means high earners can no longer invest large sums in their pensions, is also attributed for the rise, as they opt for VCTs to increase their tax efficiency.
Third, following a government review at the end of last year, Davies said there were fears that VCT tax relief might be reduced, or the types of investments allowed might be restricted.
“Fortunately, this didn’t materialise but it did mean investors piled in ahead of any potential changes,” he said.
For Davies the message for investors is clear, if you want to invest in a VCT and spot one you like, you should do so now rather than leave it until the end of the tax year when they might not be available.
He added: “Whilst VCTs are filling up fast and a number have already closed there are still some exceptional offers available with capacity. Wealth Club recommends Mobeus VCTs, Maven Income and Growth VCTs and Octopus Titan.”
