The need for greater innovation and entrepreneurship in the British economy will drive investment in VCTs and EIS, according to a new white paper from Seneca Partners.
The specialist SME investment business said recent government assurances around the regulatory backdrop for tax-advantaged investments will help their growth, despite economic headwinds.
However, the white paper also highlighted key areas where ambiguity is caused by differences of approach between providers, making the selection process for advisers and investors more complex.
Seneca Partners said issues around investment time horizons, diversification, investor involvement and liquidity all have to be understood by both the adviser first and then the investor.
Advisers also need to understand the clear difference in approach from providers, including nuances around valuations, exits and AIM investment and fees.
The firm said that those looking to invest in a VCT or EIS should find a provider that is closely aligned with the drive for economic growth.
Richard Manley, CEO at Seneca Partners, said: “VCT and EIS provide vital growth investment and support to the UK’s SMEs, which is crucial as we seek to return the UK economy to a period of sustained economic growth.”
