Venture Capital Trusts have played an important role in supporting small and medium sized businesses through the pandemic, according to a new report from the Association of Investment Companies.
‘Eagle beavers: Enhancing the UK’s commercial ecosystem’ found that in the first half of 2020, VCTs invested £695 million in small UK businesses, including £219 million in follow-on investment.
Since the scheme was adapted in 2017 to focus on higher risk investments, VCTs have invested a total of £1.6 billion in SMEs.
Richard Stone, chief executive of the Association of Investment Companies, said: “This report demonstrates the valuable role VCTs have played in supporting the UK’s SMEs through the pandemic. As the UK looks to build back a more stable and competitive economy, VCTs have a vital part to play in the business ecosystem making significant investments in ambitious young companies.
“VCTs support a wide range of SMEs from healthcare to technology and generate new jobs to help create a more resilient and responsive economy. Their unique contribution makes a compelling case for VCTs to receive continued backing from the government and policymakers across the political spectrum.”
The report found that 112 (36%) VCT-backed businesses are knowledge intensive companies, while 56% of VCT investment was directed outside London.
Of the 266 investee companies surveyed for the report, 71 had a turnover of between £2 million and £5 million when the survey data was collected, while 16 VCT-backed companies had a turnover greater than £10 million and four exceeded £20 million.
