Calculus Capital, the investment firm which backs shaving subscription business Cornerstone, has launched a £10m fundraising for its venture capital trust (VCT).
The VCT, which launched in 2010, aims to deliver an annual dividend of 4.5 per cent – or 6.1 per cent for investors who receive the 30 per cent income tax relief after holding shares for five years.
The fundraising announcement comes just days after HM Revenue and Customs published data showing that VCTs raised the most money last tax year for more than a decade. But there are mutterings that chancellor Philip Hammond may introduce changes to VCT rules in next month's Budget.
“VCT investment is a vital source of development and scale-up funding for many of the UK’s most promising smaller businesses, which are essential to the future of the UK economy,” said Calculus' chief executive John Glencross.
After the government's Patient Capital Review earlier this year, it is likely that the Budget will focus any VCT changes on funds which are attempting to de-risk investments.
The tax relief afforded to VCT investors is designed to act as an incentive, since putting money into smaller businesses is often more risky but should help the economy to grow.
But some VCTs are thought to be de-risking investments through financial engineering, by investing in property-backed businesses such as crematoriums and storage facilities, or in the media niche by pre-selling their interest in a project and therefore offloading the risk.
Although these tactics might stabilise returns for investors, they do not necessarily provide the growth for the economy which VCTs are intended to deliver.
“Calculus Capital invests for growth. We are sector agnostic, simply looking for impressive management teams with robust business models and evidence of clear market need,” said Glencross.
Calculus' VCT will also invest alongside the firm's Enterprise Investment Scheme fund, which will give both funds access to larger deals.
The VCT's current portfolio includes, alongside Cornerstone, the microchip business Blu Wireless, gene therapy firm Synpromics, and environmentally friendly weed control company Weeding Technologies.