Venture Capital Trust (VCT) investors say the pandemic has increased the importance of supporting smaller UK businesses.
Research from the Association of Investment Companies revealed that almost nine in ten (88%) VCT investors felt it was important to them that VCTs help support the UK economy and more than four fifths (84%) believe that by using VCTs they are helping UK entrepreneurs.
In addition, 81% of VCT investors feel that by using VCTs they are supporting cutting-edge science such as healthcare and technology innovations.
The AIC said over two thirds (74%) of investors use VCTs for the growth potential of backing young companies early, while two thirds (67%) enjoy being able to support green technologies with more than half believing the pandemic has made ESG considerations more important.
When asked about their goals, 56% of investors said they were using VCTs to save for retirement, while 44% use them to save for their families. Overall, more than four-fifths (84%) said they were satisfied with their experience of VCTs.
Annabel Brodie-Smith, communications director, Association of Investment Companies, says: “VCTs can play a vital role in helping us build back better. They bridge the funding gap for small, growing companies and offer support and expertise to businesses in diverse areas, from machine learning to green technology. It’s clear that VCT investors value the opportunity to support UK entrepreneurs and stimulate innovation, alongside the range of tax benefits that VCTs offer.
“This research shows most investors think the pandemic has made supporting smaller companies in the UK more important than before. VCTs allow investors to assist young companies while meeting their own investment goals, like saving for retirement or their family. It’s good to see that the majority of investors are satisfied with their investments in VCTs. However, it’s important investors are aware that VCTs are high risk.”