Albion Ventures, the former Close Ventures team which spun out from Close Brothers in January this year, is to raise £25m for VCT, Albion Development.
The offer is a D share issue in the company, which will later merge with the existing ordinary shares.
Albion, which already manages seven VCTs and claims to have returned more money to investors than any other VCT manager – £81m in total, looks to invest between £1m and £10m per company in a range of sectors, from technology to service and asset-based business.
The popularity of VCTs has waned in recent years as investors had shied away from anything perceived to be high risk. Added to this was the cutting of tax relief for investors from 40% to 30%.
However, Albion argues that since the latest Budget, the relative attractiveness of VCTs has increased following the punitive measures taken against high earners, in particular the new restrictions on pension contributions.
Albion believes VCTs are the default tax shelter for high earners going forward – 30% cash income tax relief on investment, access to capital, no tax on disposal of share and no tax on dividends.