VCTs produce strong showing in 2011

Half of the top ten performing investment companies in 2011 were VCTs, despite the sector being down as a whole by 3 per cent compared to 2010.

VCTs were successful in outperforming the average investment company sector, which suffered an 11 per cent dip.

For the research period through December 2011, the top performing VCT was Foresight VCT, which was up by 51 per cent. The second spot is occupied by Maven Income and Growth VCT, which recorded an improvement of 46 per cent.

Ben Thompson, marketing director at Foresight Group, comments, ‘Foresight VCT has continued to perform strongly, and we put this down in part to a more active technology sector where there has been a resurgence in M&A activity particularly by US corporates dipping into their large cash reserves to acquire quality high growth and innovative businesses.’

Bill Nixon, manager of the Maven range of VCTS, of which four feature in the top ten performing VCTs, says the success achieved at Maven has come about through taking a generalist focus over the past few years.

Speaking on the energy and insurance services sectors, Nixon adds, ‘Following the BP accident in the Gulf of Mexico a few years ago, spending in areas such as safety, integrity, and condition monitoring has increased significantly.

‘Maven has consciously avoided companies which are exposed to development risk, but our VCTs have benefited by funding many of the support companies which mostly have fairly predictable revenues and strong cash flows.’

Nixon attributes the improved performance of the VCT sector to the industry becoming ‘concentrated’ into half a dozen ‘well resourced’ generalists. He adds that these managers now compete for the same deal flow across the UK.

Other entries into the top ten performing VCTs are: British Smaller Companies VCT, Income & Growth VCT, Rensburg AIM VCT and Matrix Income & Growth 2 VCT.

Hunter Ruthven

Bernard Williamson

Hunter was the Editor for GrowthBusiness.co.uk from 2012 to 2014, before moving on to Caspian Media Ltd to be Editor of Real Business.

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