Mature companies
Overall, despite Brexit and some political disappointment about pledges to "back British businesses" in recent years, senior Octopus Investments fund manager Kate Tidbury said there were "pleasing" opportunities and some robust business models among more mature companies.
Tidbury told FTAdviser: “We have been pleased with the robust financial performance of many of the more mature businesses that form a large part of the VCT’s portfolio, which is at odds with valuations that have fallen to a level last seen around the financial crisis.
"Our stock market is sitting at a considerable discount to international markets and smaller companies are at a further discount, reflecting investors low appetite for risk."
She pointed to an improvement in the inflation figures and signals that peak interest rates are in sight, which she said should provide the basis for the wider stock market to establish a base and start to build from there.
However, she added: "There is a danger that companies are taken over cheaply before that recovery takes place, as company valuations are relatively cheap for overseas buyers.
"That said, government incentives such as those provided by VCTs are proving incredibly helpful to funding companies at the very small end of the market."
simoney.kyriakou@ft.com
