Some managers even claim the credit crunch has helped the trusts by lowering the valuations of potential investee companies.

Mark Wignall, chief executive of Matrix Private Equity Partners, exemplifies this bullish mood. ‘This is a great time for VCTs,’ he declares. ‘Dividend track records are improving each year and it is looking like an ideal time to invest.’

Nick Ross, managing partner at Acuity Capital (formerly Electra Quoted Management), is more restrained, commenting: ‘We are not immune from the credit crunch but there is still a healthy level of activity at the smaller end.’

Beringea’s Stuart Veale, manager of the ProVen Growth & Income VCT and the ProVen VCT, says: ‘The performance of smaller companies, like the ones VCTs invest in, depends much more on the health of the specific sector in which they operate than on the output of the whole economy.’

Other managers, like Chris Allner, head of private equity at Octopus Investments, say that companies with great management teams will prosper throughout an economic downturn.

Acuity’s Ross says: ‘The success of smaller company and VCT investments tends to rely more heavily on the quality of the management than [it does with] larger companies.’