Venture Capital Trust to Launch £50m Fundraise Following Chancellor’s Decision to Extend Scheme
Venture capital trust (VCT), Fuel Ventures, is set to launch a £50m fundraise on the London Stock Exchange next month. This move comes after Chancellor Jeremy Hunt decided to extend the scheme until 2035, shelving previous plans to wind it down from 2025. The VCT, managed by London-based Fuel Ventures, plans to back 30 tech firms over the next three years with the new cash.
Fuel Ventures Secures Anchor Funding from Titan Alternatives for VCT Fundraise
Fuel Ventures has obtained anchor funding from investment outfit Titan Alternatives for its VCT fundraise. The London-based venture capital trust plans to announce the fundraise to the market in February. This announcement marks one of the first major moves in the VCT sector since the Chancellor decided to extend the schemes until 2035.
Fuel Ventures Aims to Grow New VCT Fund Beyond £100m in Coming Years
Fuel Ventures, a leading VCT manager, has plans to expand its new fund beyond £100m in the coming years. The firm sees the Fuel Ventures VCT as an important addition to its investment strategy, allowing it to support its high-performing companies as they scale throughout the year. With the Chancellor’s decision to extend the sunset clause on VCTs, Fuel Ventures is optimistic about the future growth and success of its fund.
VCT Sector Benefits from Tax Breaks and Increasing Popularity Among Investors
Venture capital trusts (VCTs) have become increasingly popular among investors due to the attractive tax breaks they offer. VCTs, introduced by the government in 1995, pool investors’ cash to back unlisted start-ups and private firms. Investors in VCTs can benefit from major tax relief, including tax-free dividends and an exemption from capital gains tax on returns. The popularity of VCTs has been on the rise, with the amount of income tax relief claimed on VCT investments increasing by 61% from 2021 to 2022, according to HMRC figures. The number of investors backing VCTs also surged by 32% in the same period, reaching 25,800.
Uncertainty in the VCT Sector Eased by Chancellor’s Decision to Extend Scheme
The VCT sector has been facing uncertainty in recent years, with the Treasury signaling its intention to wind down the schemes from 2025. However, Chancellor Jeremy Hunt’s announcement at the Autumn Statement in November extended the so-called “sunset clause” on VCTs to 2035. This decision has brought much-needed stability to the sector and has paved the way for ventures like Fuel Ventures to launch significant fundraising efforts.
Fuel Ventures Aims to Back 30 Tech Firms with New Cash from VCT Fundraise
Fuel Ventures plans to invest the proceeds from its upcoming VCT fundraise in 30 tech firms over the next three years. The London-based venture capital trust will utilize the raised funds to support promising startups and private companies in the tech sector. The investment strategy is focused on backing winning companies as they scale and grow. With the extension of the VCT scheme until 2035, Fuel Ventures is well-positioned to provide the necessary funding and support to the selected tech firms.
Analyst comment
Heading 1: Positive news. The market is expected to experience increased activity and investment as the VCT fundraise provides funding for 30 tech firms over the next three years.
Heading 2: Positive news. The anchor funding from Titan Alternatives enhances the credibility of the VCT fundraise, attracting more investors and boosting market confidence.
Heading 3: Positive news. The aim to expand the VCT fund beyond £100m indicates potential market growth and success, with Fuel Ventures well-positioned to support high-performing companies.
Heading 4: Positive news. The increasing popularity of VCTs among investors, driven by attractive tax breaks and exemptions, is expected to lead to continued market growth and investment opportunities.
Heading 5: Positive news. The decision to extend the VCT scheme until 2035 eases uncertainty in the sector, providing stability and paving the way for significant fundraising efforts.
Heading 6: Positive news. The plan to back 30 tech firms with the raised funds demonstrates a focused investment strategy, with Fuel Ventures well-positioned to support the growth of selected tech firms.
