One third of IFAs expect newly launched VCTs to find most favour, while only five per cent back ‘C share’ issues.

The annual survey of 100 IFAs suggests that C shares, which are segregated from VCTs’ original funds and excluded from dividend payments for a set time, are being greeted with less enthusiasm than they were a year ago. In last year’s survey more than a quarter of IFAs favoured investing in an existing VCT via a C share issue.

Noble, which is currently issuing ordinary shares of up to £14 million in its three-year-old AIM VCT, says the results highlight a shift in investors’ priorities.

Henry Chaplin, Noble’s CEO, states: ‘There has been a sizeable swing in advisers’ support towards fundraisings which allow full and instant access to a mature portfolio. This highlights the importance to VCT investors of tax-free dividends.’

The study also suggests that 61 per cent of IFAs consider a buy-back policy is an important factor when selecting a fund. Buy-back policies, in which VCTs repurchase their own shares, are designed to provide liquidity for investors and limit the shares’ discount to their net asset value to an agreed ratio.

Chaplin concludes: ‘Selling VCT shares can potentially be difficult. If an investor’s circumstances change and they need to realise the capital they have committed to a VCT, a buy-back policy can be very important.’