Wealth Club, the tax-efficient investment service, has revealed the big success stories of 2016-17 as venture capital trusts (VCTs) saw the highest demand in a decade.
The total raised by VCTs in the 2016-17 financial year was £542m, the second highest fundraising on record.
Furthermore, only four VCTs remained open at the end of the tax year, with the rest closing due to limited capacity, while eight of the 20 offers were extended through an over-allotment facility.
Alex Davies, CEO and founder of Wealth Club, said the high amounts raised were due to high-earners searching for a tax-efficient alternative to pension funds.
He said: "It was little surprise that the 2016-17 tax year was characterised by VCTs closing early and capacity filling quickly.
"The catalyst for this demand is not just down to the reduction in both the lifetime allowance and annual allowance, but also the increased dividend tax and the crackdown on buy-to-let [mortgages].
"For some time, demand has threatened to eclipse supply with this year being no different as higher-earners, who can no longer invest vast sums in pensions, seek out a tax-efficient alternative."
According to Wealth Club, the most successful product was the Octopus Titan VCT, which raised £120m including a £50m over-allotment, bringing its total AUM to £426m.
Foresight VCT raised £40m over just 46 days, the second highest amount and the third fastest rate overall.
The fastest one to close was British Smaller Companies 2 VCT on 10 January, while ProVen Growth and Income VCT came in second place, closing on 31 January.
The three Northern VCTs were the fastest to raise their overall target of £12.9m, which took them just 48 hours and came from existing investors.
In the AIM sector, the largest fundraise was £25m by Hargreave Hale across its two AIM VCTs, while the fastest was Unicorn AIM VCT which gathered £15m in 15 days.
In terms of the opportunities remaining in the space, Davies said Pembroke VCT was the best option as it had a growth orientation along with low costs.
"Pembroke's investments are focused on scalable consumer brands in sectors the managers know well. Most of the companies will be earlier-stage, but Pembroke also participates in larger deals. Current investments include the Five Guys and Chilango food chains," he said.
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