Diversification is best strategy for VCT investment

vct

Aim is currently doing very well but this will not last forever so it is sensible to hold a diversified VCT portfolio that includes generalist trusts that invest in various later stage private companies

The VCT sector is set for another bumper year. Last tax year, around 40 VCTs raised in excess of £500m, and as this is expected to be the final year of 40% income tax relief, many analysts are predicting at least double that this year. Just like last year I am expecting a wave of new managers to enter the market. And once again, I believe that the market will be highly fragmented with the majority of the funds raised going to a handful of managers. Last year, 40% of the funds raised went to just four companies. Conversely, over 20 managers in the market failed to raise £10m and six of th...