VCTs hold key to top performance in the private equity market

VCTs

Why invest in private equity? The obvious answer is to make money but has this been the experience of investors?

The private equity industry has become one of the UK's success stories, delivering a 14.2% per year net return over the 10 years to December 2003, according to the BVCA Performance Measurement Survey 2003, and outperforming all FTSE indices over three, five and 10 years. Not a bad place to put your money over that period then, and it is likely your pension fund will have allocated, say, 1% to these funds. However, investors who want to invest directly, and tax efficiently, will need to look at venture capital trusts (VCTs). The recent tax changes are expected to stimulate a flood of VCTs ...