VCTs fall behind private equity funds

By John Kenchington

Venture capital trusts are dramatically underperforming private equity funds, making their tax advan...

Venture capital trusts are dramatically underperforming private equity funds, making their tax advantages irrelevant. UK private equity has delivered an annualised 18.7% internal rate of return over the past decade versus 2.1% from VCTs, according to accountancy firm UHY Hacker Young. The report also criticises enterprise investment schemes (EIS) for underperformance. It said a 2003 Revenue and Customs report found 22% of EIS investors surveyed had lost all or most of their money and only 18% had made a substantial profit. Tax manager at the firm Rob Durrant-Walker said VCTs and EIS...