Investment in Venture Capital Trusts has increased by over two-thirds so far this tax year to £152 million despite upcoming tax relief adjustments, according to figures from the Association of Investment Companies released today.

Investment in Venture Capital Trusts has increased by over two-thirds so far this tax year to £152 million ($249.8 million) despite upcoming tax relief adjustments, according to figures on these UK vehicles from the Association of Investment Companies released yesterday.

Measured from 6 April – 31 December 2013, the jump from £89.8 million during the same period in the previous tax year suggests investors’ continue to like the VCT sector even though the UK government removes tax relief in April this year for enhanced share buy-backs. Enhanced share buybacks allow investors to sell their shares back to managers after five years to then instantly repurchase them, granting them a further round of tax relief.

Excluding the impact of ESBBs, there was a 94 per cent increase in new investments so far this tax year to £134.7 million from £69.3 million during the same period in 2012.

Venture Capital Trusts, which are listed vehicles with a number of reliefs on taxes such as income tax and capital gains tax, have been one of the more visible ways that retail, as well as high net worth, investors, can tap into the venture capital space.

“These figures demonstrate continued and increasing demand for VCTs, reflecting some consistent performance and dividend track records for a sector which continues to offer vital support to small and emerging enterprises,” said Ian Sayers, director general of AIC.

Assets under management for the VCT sector peaked at £2.9 billion as of 5 January, their highest ever amount. The ten largest managers by AuM manage around 74 per cent of the total VCT funds.