Dividends and support for UK firms valued by VCT investors

18 September 2017
Research commissioned by YFM Equity Partners (“YFM”), the specialist private equity fund manager, has established that shareholders consider the ability to support growing UK businesses and the dividend yield resulting from that growth as significant factors, alongside tax relief, when investing in VCTs.

The research, carried out by FWD Research, surveyed over 1,000 YFM shareholders to discover their reasons for investing in VCTs.  Unsurprisingly, 90% of respondents said that they chose to invest in VCTs primarily due to the tax relief on offer. However, 75% also identified dividend yield as a key driver behind this investment, and nearly half (45%) said they chose VCTs in order to support growing UK businesses. Amongst investors under 60 years old, 54% opted for VCTs as an alternative to their pension fund.

David Hall, Managing Director at YFM said, “It is incredibly encouraging that our shareholders identify supporting small UK businesses and dividend yield as two of the top reasons for investing in our VCTs. The team at YFM is incredibly proud of our ability to help smaller UK businesses grow into larger, more profitable enterprises and, as a result, support the UK’s economy. It is welcoming to see that our shareholders also value this element of their VCT investment”.

“Of course, it is this growth in small businesses which drives the dividend yield and YFM has an impressive track record in this regard. Our two VCTs, BSC and BSC2,  have produced a dividend yield between 5% and 15% over the last five years, with the growth rates differing depending on where each investment is in its growth cycle. As with any long-term investment, VCTs can be a volatile ride in the short-term, but, as our shareholders have seen, those who are patient certainly reap the rewards. We are delighted that YFM’s investors recognise the additional value of these investments and look forward to strengthening our VCT funds in the next few months.”