Seymour Pierce pulls its VCT

Seymour Pierce, the investment banking group, has pulled its venture capital trust (VCT) because it could not raise its minimum of £3m (E4.9m) before the end of the tax year.

Irene Redman, a spokeswoman for Seymour Pierce, said all cheques had been returned to investors. She would not reveal how far off the minimum the VCT had been.

“It was a long hard decision,” she said. “We feel it is better investors make a better decision about going forward in the market.” The withdrawal leaves investors with about a week to find alternative VCTs in order to protect their capital gains. Seymour Pierce had wanted to garner £7.5m to invest in AIM-listed stocks.

Redman said negative publicity about financial products for retail investors had contributed to the lack of interest. “All the papers have been saying that all retail products are doing badly. It’s not a pleasant environment right now.” Other fund management companies are also suffering: a fortnight ago, Harvest withdrew its VCT in similar fashion.

However, Seymour Pierce plans to relaunch the VCT when the stock market picks up. “We will look at the economic conditions,” said Redman. “Some financial gurus are saying the market will come back in May, others say it will be as late as November, when people want to take care of things before the end of the calendar year.”

In the event of a relaunch, the product itself will remain unchanged. “The fund will more than likely have the same structure,” said Redman. “The fund structure offered no concern – it was the market that was the problem. The Seymour Pierce VCT is a conservative AIM VCT – nothing unique or weird.”