The Association of Investment Companies (AIC) published the fundraising figure, which revealed the sector had raised £728 million, the second highest amount since VCTs’ inception and an increase of 34% on last year’s figure (£542m).

It was also the highest amount ever raised at the current level of 30% upfront tax relief. 

The highest VCT fundraising figure was in the 2005/6 tax year when the sector raised £779m, when the initial tax relief on investments was 40%.
 
VCT assets under management at 5 April 2018 were £4.3bn, up from £3.9bn at 5 April 2017.

Ian Sayers, chief executive of the AIC, said: “This year’s bumper fundraising has been boosted by the Government’s recognition of VCTs as effective providers of patient capital in the November 2017 Budget, as well as the pension rule changes and VCTs’ strong long-term growth and income record.
 
“VCT fundraising is vital to UK smaller companies, as they will benefit from the VCT investment and expertise they need to grow.

“VCT-backed businesses deliver vital economic benefits, with jobs more than doubling after VCT investment.

“I am confident that VCTs will continue to be a vehicle delivering transformational change for some of the UK’s fastest growing businesses.”