They add that the environment for both disposals and funding ‘shows no sign of improving in the short term’.

The comments come with the release of the VCTs’ half-year results. Total return in the six months to June was minus 2.0 per cent for SPARK VCT, minus 2.3 per cent for SPARK VCT 2 and minus 7.8 per cent for SPARK VCT 3.

Robert Wright, chairman of SPARK VCT 2, says that during the half-year one ‘significant exit opportunity’ was lost as a result of unfavourable market sentiment.

The performance of all three SPARK VCTs was also weighed down by declines in the valuations of two portfolio companies. Antennae manufacturer Antenova and software provider Cluster Seven both needed to raise further capital during the period, resulting in a ‘much reduced valuation’ for Antenova to attract new investors and ‘dramatic’ cost cuts at Cluster Seven to enable it to continue trading without new capital.

Due to the trusts’ declining assets, the boards of SPARK VCTs 2 and 3 are discussing a possible merger. The proposal is intended to cut administration costs, pool resources for supporting and exiting investee companies, and allow greater flexibility in the way the funds’ combined assets, some £34.5 million, are invested.