Despite a low level of investor confidence, Tim Dickens from Octopus Ventures thinks now is a good time to experiment with investing in venture capital.
The investment specialist has been with the company for around 18 months after more than six years at Close Brothers Asset Management.
His job involves speaking to advisers about the benefits of venture capital investing.
Dickens told FT Adviser: “My sense from advisers is there is a low level of investment confidence now you can earn money on cash.
“The raise this year has been slow for VCTs, I am hearing that clients have got less cash than they had a few years ago.”
Despite growing awareness of the benefits of VCTs, Dickens believed there were still advisers out there not confident using them.
He said: “There is a big swathe of advisers not advising on these things.
“If they’ve written one or invested themselves they are more likely to recommend it for others.
“I do think VCTs are becoming a much more important part of an adviser's kit bag with capital gains tax and dividend allowances coming down."
The CGT annual allowance will fall to £3,000 in April 2024, after it fell to £6,000 last year while dividend tax will fall to £500.
Dickens added: “Nobody is talking about putting 100 per cent of your portfolio into venture capital but I think it can add value to your portfolio.”
With valuations lower than previous years, Dickens said now is a good time to invest in venture capital.
He added: “Across all stages valuations have come down - If you loved VCTs two years ago you would love it even more today.”
Dickens said he receives up to 5,000 pitches a year from new companies but Octopus picks 30 to 40 to actually invest in.
He said: “This world is so far removed from my old world, it doesn’t always feel like I am working in investments, it is so exciting.”
tara.o'connor@ft.com
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