When you invest in a VCT, you’re buying shares in the VCT itself and gain exposure to the fund's existing and growing portfolio. Investors don’t own shares in the portfolio companies themselves, however. The trust’s managers use capital raised from investors to invest in a diverse range of early-stage companies across various sectors—think tech startups and niche consumer brands.
The key goal for VCT managers is to help these companies grow and create value for investors by producing returns, which are aligned with the objectives of unlisted venture capital funds as well.
Despite being listed, the fund itself holds illiquid assets. Typically, VCTs will hold their investments for anywhere from three to seven years, before exiting and reinvesting in new opportunities.