Venture Capital Trust - VCT

AAA

DEFINITION of 'Venture Capital Trust - VCT'

A type of publicly listed closed-end fund found in the United Kingdom. A venture capital trust is designed as a way for individual investors to gain access to venture capital investments via the capital markets. Its mandate is to seek out potential venture capital investments in small unlisted firms to generate higher than average risk-adjusted returns for its investors.


Numerous venture capital trusts are listed on the London Stock Exchange.

INVESTOPEDIA EXPLAINS 'Venture Capital Trust - VCT'

Venture capital trusts are tax-advantaged investments in the United Kingdom, often relieving investors of many of the tax implications surrounding dividends and capital gains, or offering lower taxation rates.


Typically, they are bound by regulations to the percentage of funds that must be allocated to qualifying investments, or holdings, along with timelines for capital injection loans and investments outside of those held in said qualifying holdings. However, the majority of VCTs aim to invest a large majority of their funds with the goal of achieving higher risk-adjusted returns than other investments available in the market.

RELATED TERMS
  1. Death Valley Curve

    A slang phrase used in venture capital to refer to the period ...
  2. Venture Capital

    Money provided by investors to startup firms and small businesses ...
  3. London Stock Exchange - LSE

    The primary stock exchange in the U.K. and the largest in Europe. ...
  4. Angel Investor

    An investor who provides financial backing for small startups ...
  5. Pre-Money Valuation

    A slang phrased that refers to the value of a company's stock ...
  6. Seed Capital

    The initial capital used to start a business. Seed capital often ...
RELATED FAQS
  1. What are the top high yield bond ETFs?

    Three of the most popular high-yield bond exchange-traded funds, or ETFs, are the Peritus High Yield ETF (HYLD), the SPDR ... Read Full Answer >>
  2. Why has the market for high yield bonds grown so much?

    Reasons for the rapid growth of the high-yield bond market include the creation of new types of issues, a prolonged period ... Read Full Answer >>
  3. How can electricity be traded as a commodity by an individual investor?

    Electricity can be traded in the financial marketplace like any other commodity. Electricity futures trading offers an alternative ... Read Full Answer >>
  4. What is the relationship between research and development and innovation?

    Although it's possible to achieve innovation without research and development and it's possible to conduct research and development ... Read Full Answer >>
  5. Are so-called self-offering and self-management covered by "Financial Instruments ...

    As the Financial Services Agency (FSA) explains, self-offering of interests in collective investment schemes falls under ... Read Full Answer >>
  6. What are some examples of smart beta ETFs that use passive and active management?

    There are a number of smart beta exchange-traded funds (ETFs) that use passive and active management, including the WisdomTree ... Read Full Answer >>
Related Articles
  1. Entrepreneurship

    How Venture Capitalists Make Investment Choices

    In order to increase your odds for receiving funding, here are some criteria considered by venture capitalists.
  2. Investing Basics

    What Is Private Equity?

    This investment vehicle attracts wealthy investors to increase the value of portfolio companies.
  3. Fundamental Analysis

    Cashing In On The Venture Capital Cycle

    Find out how VC firms make the market go round, and round and round.
  4. Investing Basics

    How To Invest In Private Companies

    It can be tough to invest in a company that doesn't trade on an exchange, but there are also several advantages.
  5. Mutual Funds & ETFs

    Private Equity A Trendsetter For Stocks

    In this article, we'll show you how private equity sets the trend for stocks everywhere.
  6. Mutual Funds & ETFs

    How To Invest In Private Equity

    Private Equity might be a pricey investment, but returns are on the rise and the payoff could be big.
  7. Entrepreneurship

    Top 9 Venture Capital Interview Questions

    Ace your interview by learning how to break down the most common questions asked.
  8. Personal Finance

    Seek An Adventure In Venture Capital

    Make a career out of chasing down the "next big thing".
  9. Professionals

    Top Strategies to Attract Elite Clients

    Here's how to think outside of the box when it comes to attracting a high-net-worth client base.
  10. Professionals

    Worried About Stocks? Try on Convertibles

    Convertibles are a good hedge against equity market risk (if you're o.k. with losing a bit of upside potential).

You May Also Like

Hot Definitions
  1. Inbound Cash Flow

    Any currency that a company or individual receives through conducting a transaction with another party. Inbound cash flow ...
  2. Social Security

    A United States federal program of social insurance and benefits developed in 1935. The Social Security program's benefits ...
  3. American Dream

    The belief that anyone, regardless of where they were born or what class they were born into, can attain their own version ...
  4. Multicurrency Note Facility

    A credit facility that finances short- to medium-term Euro notes. Multicurrency note facilities are denominated in many currencies. ...
  5. National Currency

    The currency or legal tender issued by a nation's central bank or monetary authority. The national currency of a nation is ...
  6. Treasury Yield

    The return on investment, expressed as a percentage, on the debt obligations of the U.S. government. Treasuries are considered ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!