VCT fundraising push continues as Baronsmead launches £50m raise
Two Baronsmead venture capital trusts (VCTs) have launched a £50m funding drive today as a boom in fundraising for the vehicles continues.
The VCTs, which are managed by Gresham House, are targeting a £30m share offer with an over-allotment option of £20m, meaning they are able to issue new shares if there is demand from investors.
Baronsmead Venture Trust launched in 1995 as of the first VCTs on the market. The fund successfully completed a £50m fundraise in 2024, surpassing its initial £30m target.
The two trusts looking to raise funds have combined assets of £433m and take a so-called hybrid approach to investment, dividing their portfolio between AIM-quoted companies and unquoted companies.
Investments made by Baronsmead in the second half of 2024 included a £2m investment into unquoted adventure travel scale-up Much Better Adventures, and a £4.3m investment in AI consulting and platform business IntelliAM.
Interest in VCTs spiked after the Budget when Chancellor Rachel Reeves hiked capital gains tax, as profit from the vehicles are exempt from capital gains tax and investors can claim 30 per cent income tax relief on the investments.
Last week, two more VCTs launched fundraising efforts: Northern VCTs seeking £36m and three Albion VCTs for £50m.
Albion’s trusts raised £10m in less than 26 hours, with investors quickly using up the fund’s one per cent early bird discount.
Meanwhile, the Northern VCTs have been the best performing trusts on the market over the last five years, growing more than 26 per cent.
“Venture capital trusts play a vital role in supporting the UK’s SME landscape, which is critical to delivering growth for the wider economy,” said James Hendry, investment director at Gresham House and manager of the Baronsmead trusts.
“Demand for VCTs remains strong in light of continued support for the vehicles in the recent Budget, so we are excited to be launching this share offer for the proven Baronsmead VCTs at this time.”