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“An important contribution”

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24 October 2019

AIC welcomes British Business Bank analysis of UK venture capital returns.

The Association of Investment Companies (AIC) has responded to the British Business Bank’s report, ‘Analysis of UK VC Financial Returns’, which seeks to quantify how well UK venture capital (VC) funds have performed in comparison to their US counterparts.

The report follows last month’s study from the British Business Bank, ‘The Future of Defined Contribution Pensions’*, which made the case for defined contribution (DC) pensions increasing their exposure to venture capital and growth equity.

Ian Sayers, Chief Executive of the Association of Investment Companies (AIC), said:

“Investing in promising private companies at an early stage of their development can be rewarding both for investors and the wider economy. This British Business Bank report makes an important contribution towards assessing the financial returns of UK venture capital, and it underlines the attractions of this asset class as part of a balanced, long-term portfolio.

“However, when investing in unquoted companies, it is essential to use the right fund structure. Recent events have shown that exposure to unquoted companies within open-ended funds can lead to harmful consequences for investors.

“Listed investment companies, on the other hand, are highly suitable vehicles for this kind of illiquid investment. They provide permanent capital, while allowing investors an exit through the stock market if they need it. They are highly transparent, with an independent board to act in shareholders’ interests. And they have experience of investing in unquoted companies that goes back several decades.

“This can be achieved in different ways. For example, venture capital trusts (VCTs) invest directly in small UK companies and have a strong track record of performance, with the average VCT returning 166% over the past ten years. Or investment companies can invest through institutional funds, providing a spread of different managers and vintages.

“We warmly welcome the British Business Bank’s commitment to improving the quality and accuracy of data on venture capital returns, which is an important step towards increasing confidence in the asset class.”


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  1. *The study ‘The Future of Defined Contribution Pensions’ is available here.
  2. The Association of Investment Companies (AIC) was founded in 1932 to represent the interests of the investment trust industry – the oldest form of collective investment.  Today, the AIC represents a broad range of closed-ended investment companies, incorporating investment trusts and other closed-ended investment companies and VCTs. The AIC’s members believe that the industry is best served if it is united and speaks with one voice. The AIC’s mission statement is to help members add value for shareholders over the longer term. The AIC has 362 members and the industry has total assets of approximately £198 billion.
  3. Disclaimer: The information contained in this press release does not constitute investment advice or personal recommendation and it is not an invitation or inducement to engage in investment activity. You should seek independent financial and, if appropriate, legal advice as to the suitability of any investment decision. Past performance is not a guide to future performance.  The value of investment company shares, and the income from them, can fall as well as rise.  You may not get back the full amount invested and, in some cases, nothing at all.
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