Reflections on a record fundraise for Puma Private Equity

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Key Info

Chloe Metcalfe

Rupert West

The 2022/23 tax year was – for many investors – tough going. Both global bond and equity markets suffered steep falls, which dealt a blow to those holding traditional 60/40 portfolios that rely so heavily on the hedging properties of bonds to protect against falls in equity prices.(1) Yet despite the ongoing turmoil, it proved to be another great year for VCT fundraising.

Another bumper year for VCTs

According to data from the Association of Investment Companies (AIC) £1.08 billion was raised – the second highest sum on record.(2) and demand for VCT’s shows no signs yet that it is abating, despite VCTs being clearly positioned as ‘more risky’ investments. Whilst it is fair that VCTs are considered to be specialist high risk investments given they invest in small companies with shares that are illiquid, they remain a pooled investment vehicle and bring with them other benefits that are proving attractive to investors. These include:

  1. Tax efficiency – VCTs are a way for individuals to invest their money tax efficiently, particularly where they have maximised contributions to both ISAs and pensions. And whilst pension contribution limits have risen (both the annual and lifetime limits have changed) there has been a reduction in the annual CGT exemptions as well as dividend allowances, making investments outside tax wrappers less attractive. Against this backdrop, VCT’s offering tax free dividends, tax free capital gains as well as 30% income tax relief on investments up to £200,000.
  2. VCTs are a way of investing into young and ambitious British businesses – some of whom individuals may have a personal interest in. First introduced in 1995, VCT investment has helped the likes of Virgin Wines, Gusto, Zoopla, Cazoo, Me&Em, Bella Freud, Pasta Evangelists, Five Guys and many more. Private investors have been able to share in the success of these companies through VCTs, where such access has previously only been available to institutional investors – all with tax positioning that is normally only available to high-net-worth individuals through bespoke off-shore structures.  

This year 27 share offers were open – the same as the previous tax year. But a number of the established investment managers sought a significant increase in funding rounds, making the total fundraise more concentrated than it has been in recent years. Octopus Titan – the UK’s largest VCT raised £237 million and there were six others that raised £50 million or more: our own Puma VCT 13 one of them.

What does this mean for British businesses?

One of the conditions attached to funds raised in a VCT is that 80% of the money has to be invested in scaling businesses within three years. So with so much money raised last year and this, one would assume that entrepreneurs and founders looking for investment are awash with offers. If we look back to the beginning of last year this was certainly true. In the months preceding the war in Ukraine and the challenges we now know this has conferred, offers were being made to scaling businesses at very high valuations. This is partly because during the pandemic investment levels had been low, so in the months following, many managers where in a rush to make offers, in a bid to make up for the deployment they had not undertaken during 2020 and 2021.

But as we look back to the tail end of 2022, we saw a number of factors start to dampen valuations, including volatile investment markets, rising inflation and consequently rising interest rates, falling consumer confidence and in turn, depressed discretionary consumer spending. Such prevailing economic headwinds have had implications for VCT investment managers, and whilst we have once again seen significant fundraising this year, this won’t necessarily translate into UK businesses seeing a plethora of funding offers on the table.

To start, some VCTs have built up significant exposure to certain sectors which have suffered a material valuation change in recently months, for instance, early-stage tech. The UK’s largest VCT which this year experienced the biggest single fundraise on record – also announced falls in its NAV per share of 23% in the last 12 months.(3)

In addition, whilst some VCT investment managers have secured a significant fundraise, they will be nervous about deploying too much into new companies as the capital may be needed for follow-on investments into their existing portfolios. One well known VCT provider recently stated they were expecting to use 65-70% of their latest fundraise for follow-on funding.(4)

At Puma Private Equity we are fortunate to have some protection from these factors, and as such we anticipate deploying a record level of capital into new businesses this year. Our approach has always been to run a generalist mandate that affords us exposure to a wide range of sectors within our funds. This cushions us from over-exposure to risks inherent in certain sectors, and gives us a wide flow of data, and a view of the whole economy. We seek to invest in mature management teams that have a proven commercial model and a clear market fit and intentionally run a more concentrated portfolio to enable our investment team to spend significant time with each of the businesses we’ve backed. This ensures we are able to create deep relationships and provide active and meaningful support at all levels in the businesses we partner with. Being such an active investor has helped us deliver consistent positive returns – helped by the average return on exit of investments we’ve made over the past four years is 3x the money invested. It also means the number of failures is tiny in comparison to others. At Puma we prefer to be steady and consistent rather than boom and bust.

And as our fundraising and investment levels have grown, we’ve continued to invest into our team with a number of new hires in the last twelve months including:

  • Ryan Goodbrand joined Puma at the end of 2021 as Portfolio Finance Lead after 17 years at Charterhouse Private Equity where he focused on portfolio performance and strategy. 
  • James Craig joined the team as Portfolio Value Creation Lead at the end of 2022. Before joining Puma, he was a Change Director at ScaleUp Capital, having come from a consulting background at Accenture and Beringa.
  • Most recently Mark Lyons joined the team in March 2023 as Investment Director and is responsible for heading up operations in Manchester and expanding Puma Private Equity’s presence across the North. Mark joined from Praetura where he was Head of Investments.

The North of the country is now a fantastic breeding ground for innovation and entrepreneurialism. We believe 2023 will prove to be our biggest year of deployment to date, and we are excited about the opportunities we are seeing both here and across the country.


1 – 2022 has been terrible for investors; 2023 promises to be much better – IFA Magazine
2 – Second highest VCT fundraising to boost ambitious UK companies | The AIC
3 – Octopus Titan VCT suffers ‘disappointing’ 23% total return loss in 2022 (
4 – MICAP 

Investments need to be held for at least 5 years to qualify for income tax relief. Individuals’ capital may be at risk. Past performance is no guarantee of future returns. Tax benefits are subject to change and depend on the individual’s circumstances.