The company is making no new investments and has halved the size of its board in preparation for the wind-up.

The news comes as the VCT announces its final results for 2007, a year which saw the net asset value of its shares fall 3.9 per cent to 90p, with losses of 3.7p per share compared to 5.4p in 2006.

Its shares are trading at 47p, a large discount to their net asset value. Chairman Andrew Wates says this is due to ‘the absence of a secondary market [for the VCT’s shares] and the low level of free cash to permit share buybacks by the company’.

Since it was established in 2001 the VCT’s realised investments have generated an internal rate of return of 19.4 per cent, but at the end of last year it was sitting on net losses of £97,000 for its existing portfolio.

The company made no exits last year, and so arranged a bank loan facility of £500,000 to manage its short-term cash requirements. Directors Ted Tuppen and Nick Irens have stepped down from the board, and costs including printing expenses have been cut ‘as far as possible’.

Leisure & Media VCT was established in 2001, with former BBC chairman Michael Grade as one of its founding directors. Its investee companies are from the health and fitness, publishing, hospitality, leisure and tourism sectors.