Is consolidation due to hit the VCT sector?

Multiple VCTs now less attractive

With new government rules eroding the benefit of having multiple vehicles and investing in MBOs, is the VCT sector at risk of mass consolidation?

The decision from Baronsmead at the end of last year to merge two of its VCT funds, due to changes in the amount of cash that can be invested over the lifetime of an investee company, highlights how a shift in the rules for tax-advantaged investment is impacting the sector. The new rules, introduced in the Summer Budget and given royal assent in November, were cited as the key drivers for Baronsmead's decision to merge its VCT 3 and VCT 4 funds, which is expected to complete this month. Previously, there had been a benefit in having multiple funds, which could invest in concert and ci...