UK VCs focus on ESG-driven investments

By Vikas Vi — A Venture Capital Trust (VCT) is a type of publicly listed, tax-advantaged investment fund in the UK, designed as a way for individual investors to gain access to VC investments via capital markets. In recent years, VCTs have increased their focus on socially responsible investments that take environmental, social and governance (ESG) factors into account while assessing business performance. 

 

The £3.5 billion VCT sector has become particularly active over time in environmental, educational and healthcare sectors where the dynamics driving change have been huge, especially with climate change and the increased health demands of an aging population. Investments in these areas deliver lasting rather than temporary value, and enhance social benefit.

 

VCT investments in the healthcare sector include healthcare staffing platform Network Locum, backed by ProVen VCTs, and clinical trial database Antidote, backed by Octopus Titan VCT. Women’s health is another area which has seen VCT involvement, including IVF specialist Create Health, backed by the Baronsmead VCTs, and cervical screening service Dysis Medical, backed by the Albion VTCs.

 

In the environmental sector, VCTs have contributed to the 25 percent of UK’s power which now comes from renewable sources. They have also supported agri-science, enabling more food to be produced for growing populations. VCT investments in this area include agricultural laboratory testing service Cawood Scientific, backed by Northern VCTs, and Silent Herdsman, backed by Albion Ventures.

 

There are several areas where VCTs support the education sector, both in the provision of technology and in the actual ownership and management of schools. On the technology side, Firefly Learing, backed by ProVen VCTs, provides software to schools in 32 countries, while Wey Education, backed by the Baronsmead VCTs, offers both a combination of technology and physical teaching.

 

Tim Levett, chairman of NVM Private Equity, said VCTs are playing an active role in improving the way we live. Over the past year, NVM has received a growing number of investment proposals where value can be created in a socially positive manner.

 

Source: FT Adviser

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