Albion Capital raised a bumper £80m across their six Venture Capital Trusts (VCTs) in the 2022/23 tax year and will now set about deploying the capital in high-growth innovative British companies.
Albion Capital will use the funds to add new companies to their portfolio, as well as deploying further capital across their portfolio of 60 companies to help accelerate growth.
Albion Capital’s investments in technology companies operating in health care and finance have helped create over 5,000 jobs and provided investors with an average annual return of 8.4% p.a. over the 10 years to 30 September 2022, excluding the impact of tax relief.
“VCTs play an important role bringing British innovation to life and supporting entrepreneurs on their growth journey. This results in positive economic and social benefits for the UK and valuable returns for patient VCT investors,” said Will Fraser-Allen, Managing Partner at Albion Capital.
“This has been recently demonstrated by one of our companies, Quantexa, completing a funding round at a £1.4bn valuation.”
Portfolio company revenue growth
The key to success for the Albion Capital portfolio is strong revenue growth. Speaking at an event held in early April, Managing Partner Will Fraser-Allen and Partner Robert Whitby-Smith spoke of seeking out companies that had the potential to generate £100 million revenue and their process for selecting companies with potential to do just that.
Across the 15 largest healthcare and technology companies in their portfolio, Albion notes forecasted revenue grew by 63% to total over £275m in the last year.
Portfolio company Quantexa is a great example with their 70% increase in annual recurring revenue in their last full year. Quantexa provides intelligent data management services to global banks and counts HSBC and Standard Chartered as their clients.
Robust VCT demand
Albion Capital completed their oversubscribed £80m fundraising in the second highest year for VCT funding on record. Albion Capital’s £80m represented roughly 8% of the total £1.08 billion raised by VCTs in 2022/23, according to data from the Association of Investment Companies (AIC).
The 2022/23 tax year was second only to the last tax year when £1.13bn was raised.
“This VCT fundraising is close to record levels which will be highly beneficial to the UK’s innovative small businesses in a challenging year. Last year VCTs invested £700 million in small private companies and AIM companies,” said Richard Stone, Chief Executive of the Association of Investment Companies.
“This much-needed support to the UK’s fast-growing companies helps deliver vital economic, social and environmental advantages to the country. It’s crucial VCTs can continue to fund young businesses which create jobs, develop skills and knowledge, increase exports and raise the tax take across many sectors including healthcare and technology.”