Hargreave Hale launches £25m VCT fundraise


Hargreave Hale is seeking £25m for its AIM VCTs as it predicts changes to legislation will not hamper demand.

The manager has opened its AIM VCT 1 and AIM VCT 2 to a new fundraising round, which will close on 30 November this year, unless the target is met sooner.

Last year Hargreave Hale sold out of its £20m offer, but says it is difficult to know what appetite will be in the market following government reforms on AIM VCT legislation.

In the Budget last year, Osborne announced changes to VCTs, including that they are not permitted to invest in companies older than 12 years if the companies have not previously received funding, and capping the amount VCTs can invest in a firm at £15m for the majority of companies and £20m for those with high research and development costs.

Oliver Bedford, co-manager of the Hargreave Hale AIM VCTs, says: “We will monitor our deal flow carefully over the coming months but don’t foresee a significant change to the types of companies that we invest in.

“The complexity of the legislation is unfortunate and will require careful management; however, we still think there is a compelling case for investing in small British companies through tax efficient structures such as AIM VCTs.”

However, Bedford said the reforms should have “little impact” on VCT returns.

“It’s difficult to know how the market will respond this year; investors and their advisers are still familiarising themselves with the new landscape,” he added.

In the year to 31 December 2015 the Hargreave Hale AIM VCT 1 returned 5.9 per cent and the Hargreave Hale AIM VCT 2 returned 4.3 per cent, compared to the FTSE 100 return of -1.32 per cent for the year and 6.6 per cent for the AIM All-Share.

The offer for AIM VCT 1 is £15m and for AIM VCT 2 is £10m. Minimum investment is £5,000.