Are all VCTs now destined to fail?

Food for thought from Bloomberg 23/9/25

Some PE Firms Doomed to Fail as High-Flying Industry Loses Its Way

Private equity’s reckoning has frustrated investors waiting longer for payouts, forcing firms to scale back fundraisings, offer secondary exits and diversify 

https://www.bloomberg.com/news/features/2025-09-22/private-equity-firms-fundraising-stumbles-after-high-flying-era

copy at: https://app.box.com/s/ikfmajc3cwloh3xfieygn7qikl8mtow0

Don't get me wrong, EIS and BEIS schemes are a great idea and well worth the costs to HMRC for the  promotion long term investment and the years it takes for start-ups to become dividend paying, but VCTs are, and always have been, a scam too far.

The only thing keeping VCTs alive is the endless self-promotion by the law-breaking Investment Managers, VCT Directors and the fee-gouging solicitors and accountants advertising that HMRC will pay you £1m as their primary marketing tool.

Just look at the decades long real terms negative Net Asset Value growth of most of the VCTs. Why is that? Because the fee gougers want the annual £1bn fund raising to continue ad infinitum and so have a vested interest in zero-growth.

Start by removing tax exemption for dividends 40% and end the dividend reinvestment scams.

Why should a secondary buyer get tax free dividends from other peoples capital contributions? 

Reminds me of the old ploy of Coupon Stripping Gilts way back in the '70s - convert highly taxed income to capital gains that was at the heart of what we Treasurers did for Lloyds of London names and all using borrowed money

In this case individuals with taxable capital gains should buy VCT shares about to pay "special dividends" CumDiv and realise a 28% HMRC capital loss when they sell ExDiv.

The modern day equivalent is the "Cum-Ex" scandal that cost EU Governments £50+bn.

Then force merge all VCTs into one £6.6bn fund that is self-liquidating after 10years. A win-win all round - except for the fee-gougers.

(the £6.6bn is a mere 2% of all closed-end Investment Trusts -so no impact on UK plc but will save HMRC minimum £250,000,000 pa)


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