1) Generalist VCTs

Generalist VCTs represent about 75% of all VCTs. They invest in companies across a wide range of sectors, aiming to build a diversified portfolio that aligns with the VCT’s investment mandate.

2) AIM VCTs

AIM VCTs invest in companies listed on the Alternative Investment Market (AIM), a junior segment of the London Stock Exchange created to support the growth of smaller UK businesses. Unlike privately owned VCT-qualifying companies, AIM-listed firms have a daily market price and must meet ongoing regulatory requirements. This makes AIM-listed shares more liquid and easier to buy or sell.

3) Specialist VCTs

Specialist VCTs concentrate on specific industries such as energy, infrastructure, or biotechnology. While focusing on a single sector involves higher risk, it can also offer greater potential returns if the sector performs well.

The lifespan of a VCT

VCTs can have different lifespans depending on their structure:

• Evergreen VCTs: Designed to operate indefinitely, these VCTs seek to provide long-term capital growth and/or regular dividends.
• Limited Life VCTs: Set up with a fixed-term structure, these VCTs aim to wind up shortly after the minimum five-year holding period. Once this period ends, the VCT sells its assets and distributes the proceeds to shareholders.