Albion has become the latest to jump on the trend, adding three new hires in what it described as a “strategic expansion”.
Catriona McDonald (pictured left) and Nadine Torbey (centre) have joined the firm to help with tech investments on Albion’s VCT portfolios, while Tanel Ozdemir (right) becomes an analyst on the UCL Technology fund, which focuses on commercialising UCL’s research on physical and life sciences.
Shore Financial Planning director Ben Yearsley said VCTs are having to focus on earlier-stage companies further up the risk scale and tech is an “obvious area” for them to do that.
“Rule changes have meant that VCTs have had to focus away from areas they’ve focused on for the last decade,” Yearsley said.
In 2015, the government announced VCTs would no longer be able to back management buyouts and it also capped the age of companies eligible for VCT investments from seven years, or 10 years for knowledge intensive companies.
Chancellor Philip Hammond further sharpened the focus of VCTs to knowledge-intensive companies in the 2017 budget, increasing the investment limit to £10m, but cracking down on the use of lower risk schemes that take advantage of the investment vehicles’ tax benefits.
VC and private equity hires
Yearsley expected most hires to come from outside the VCT sector, such as venture capital or private equity.
Albion’s latest hires mostly match that profile.
Torbey helped manage a $52m venture capital fund focused on the knowledge economy for Berytech Fund Management in Lebanon, while Ozdemir was previously an investment analyst at Newable Ventures.
McDonald joins from Goldman Sachs where she specialised in renewable technology and power. She also worked for a private firm in New York focused on fintech and healthcare.
Albion said it is focusing increasingly on growth and innovation. It said it is seeking more opportunities in data analytics, cybersecurity, digital health, automation and marketing technology (martech).
Tilney managing director Jason Hollands said the expansion of technology teams has been going on since the refocusing of the scheme on earlier phase businesses since November 2015.
Mobeus hired Trevor Hope from Beringea to lead the new investment process along with other hires, Hollands said. NVM has also “seriously beefed up” its team and Maven has made hires too.
“This is partially why we are seeing such a lot of fund raising this year: teams have beefed up and feel ready to ratchet up deal flow,” Hollands said.
Charles Winnard, a senior hire at NVM, also joined the industry from venture capital, having previously worked at IP Group.
Yearsley said some managers are continuing to invest in later stage, dividend paying opportunities outside the VCT structure, attracting money from institutions and high-net worth clients.
