Venture capital trusts (VCTs) raised £895m in the 2024/25 tax year, the third highest figure on record.
Figures compiled by Association of Investment Companies (AIC) show the last tax year was hot on the heels of the fundraising record set in 2021/22 of £1.13bn and the 2022/23 tax year in which £1.08bn was raised.
Fundraising over the past five tax years, from 2020/21 to 2024/25, totalled £4.67bn, according to the AIC.
Richard Stone, AIC chief executive, said: “Despite a difficult economic backdrop, VCTs had their third best year for fundraising.
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“This is good news for the UK’s innovative young companies because VCTs provide finance and advice to these businesses, helping them scale up and succeed.
“VCTs offer attractive tax incentives to investors, while their investee companies create economic and social benefits for local communities across the UK. Some may even grow to become household names.
“This year’s strong fundraising shows that VCTs remain a favoured investment for those who want to back growing UK companies while reducing their tax bill.”
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