AIM-quoted VCTs struggle

According to figures released by the Association of Investment Companies (AIC), VCTs which invest in AIM-quoted businesses have returned on average just 50% of capital invested over the past five years, and just 54% in 2008.

The drops are broadly in line with declines in the AIM market as a whole, which has seen the total market capital of listed companies fall from almost £100bn in December 2007 to approximately £40bn in December 2008, despite only a modest drop in the number of businesses listed. Moreover, according to Mark Wignall, managing director of VCT manager Matrix Private Equity Partners, "the AIM VCT sector will continue to be under great pressure" going forward.

Despite overall drops year-on-year, generalist VCTs held up better in 2008, returning 77% of invested capital on average, against 113% over the past five years. Furthermore, the top performing VCTs over the period have all been generalist in focus and have recorded stellar performance figures, with Beringea's ProVen VCT ranking first with an aggregated return of 281% of invested capital (ProVen Growth and Income VCT also ranked fourth overall with 186%).

Additionally, environmentally-focused VCTs performed best in 2008, and although below par at an average return of around 91% of invested capital, this is impressive given the difficult investment climate. Indeed, the top-performing VCT over the year was the environmentally-focused Ventus VCT, which produced returns in excess of 134% over the 12 months.

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