VCTs outdo FTSE All-Share index

According to the BVCA, the first nine venture capital trusts have produced better returns to private investors than the FTSE All-Share Index.

In the last five years, venture capital trusts (VCTs) have dished out better returns to private investors than the FTSE All-Share Index, according to new research from the British Venture Capital Association (BVCA).

The Association collated its figures from those firms that managed the first nine VCTs launched in 1995-1996, and found that these VCTs paid out 16.6 per cent per annum to higher rate shareholders over the last five years. The annual cash payouts to investors were 4p for every 100p subscribed and were made up of dividends and capital distributions. This was 48 per cent more than the 2.7p equivalent dividends received by individuals investing in the FTSE All Share Index.

Since 1995, VCTs have raised £1.4bn. Today 70 are in operation and the number is growing, said the BVCA. Last year VCTs were launched by a number of firms including Quester, Electra, Gartmore and Unicorn.