Chairman Richard Hargreaves says the trust’s failure to meet its fundraising target ‘reflects the significant drop in the appetite for VCTs in the last tax year’.

With assets under management of £1.8 million, Arc VCT had a net asset value per share (NAV) of 102.42p at the end of February. That represents an annualised total return of 1.0 per cent since its launch in June 2005, including a maiden dividend of 0.4p paid in February.

Hargreaves says this is ‘an acceptable performance for a VCT at this stage of its development’, though he concedes that performance has ‘lost its gloss’ due to a number of disappointing investments.

These include Famous Retail, which has gone into administration ‘due to the difficulty of retailing discretionary spend products during difficult economic conditions’, and Smart Implant Holdings, which has been written off ‘because of the intransigence of one director who refused to agree to certain conditions imposed by our managers’, according to Hargreaves.

He is confident, however, about Arc’s investment in Rainbow Rewards, the US-based operator of a cash-back loyalty card scheme, and says the VCT has invested further in the company since February.