Tim Levett, the chairman of NVM Private Equity, believes that venture capital trusts will raise £250 million this tax year.

Tim Levett, the chairman of NVM Private Equity, believes that venture capital trusts (VCTs) will raise £250 million this tax year.

This would be only half of the combined target for all VCTs in 2009/10, but would represent an increase of 85 per cent on the £135 million raised for the tax-efficient vehicles in the previous 12 months.

Says Levett, ‘As the UK starts to slowly emerge from the recession those companies that have survived are in a stronger position to grow their business and, with lack of bank funding in the SME sector, the opportunities for VCTs to find attractive growth deals has improved.’

Levett adds that fundraising for VCTs, which back small to medium-sized companies, should receive a further boost from changes to the rules for self-invested personal pensions (SIPPs) which make them less attractive to top earners from a tax perspective.

Fundraising by VCTs peaked at some £790 million in 2005/6, but has dwindled since the Treasury cut back the tax breaks the trusts offer investors.

Northern 3 VCT, which is managed by NVM Private Equity, is currently looking to raise up to £13.5 million.