In this interview, Rupert West and Jessica Franks explore the recent VCT changes announced in the Autumn Budget 2025 and the impact of these changes – on both investors and our own investment strategy.

Rupert and his team oversee all aspects of portfolio management for the VCTs. Jessica is an accountant and Chartered Tax Adviser and leads product innovation for our Puma VCTs. 

What was announced in the Autumn Budget 2025? 

Jessica: From 6 April 2026, the way that VCTs can deploy capital is being materially extended. The limits that control how much VCT funding a company can receive are doubling, as shown in the table below.

 Source: gov.uk, November 2025

In addition, existing VCTs will be able to back larger companies, effectively meaning more support over a longer period. In return for this change, individuals investing in a VCT after 5 April 2026 will receive a reduced rate of upfront income tax relief – 20% instead of 30%.

What will this actually mean for the VCT market?  

Jessica: We think in general this is very positive for investors and VCTs (and for our own VCT strategy). VCTs will be able to back larger companies and participate in later rounds of fundraising. Over time this will allow VCTs to give investors exposure to a more mature portfolio of companies. It will also allow VCTs to present themselves as more valuable partners to the most attractive companies, strengthening our ability to support their growth. 

The Government’s announcement recognised that these extensions increase the generosity of the relief. By enabling larger companies to be supported, the risk for VCTs that adopt these changes may be reduced. 

In particular what does it mean for our VCTs (Puma VCT 13 and Puma Alpha VCT)? 

Rupert: Our VCTs are ideally positioned to benefit from the new rules. Firstly, we invest in scale-ups, not start-ups. We already focus on ambitious UK scale-ups with proven market traction, leading larger rounds that support genuine strategic growth. Because we do not invest in start-ups, our investment team’s skills, experience and network are all aligned with companies that will be accessible to VCTs under the new limits. 

We target well-managed, established, unquoted companies with clear product-market fit and average revenues of around £7 million¹ – putting many close to profitability (around 40% of our portfolio already is²). Several of our companies sit near the existing investment cap, including CameraMatics, Lucky Saint and Pockit. The increased limits will allow us to back our existing success stories for longer. 

By focusing on scale-ups, we have always positioned ourselves at the larger end of the VCT investible market. We have built the networks, reputation and added-value capabilities needed to win these opportunities. We expect to be able to target new companies at the upper end of this limit, utilising existing market positioning and knowledge to invest in slightly larger companies with our first cheque. This should add robustness as we continue to add diversification. 

What do we expect the impact will be for investors? 

Jessica: It is important to remember that performance needs to be judged over the long term and is impacted by the overall strength of the economy. However, these changes should allow for better and more consistent performance. Why? Because every company that could previously receive VCT investment still can, but now VCTs can invest in larger companies and participate in later funding rounds that previously were beyond reach.

We believe adding exposure to more mature companies should reduce volatility plus participating in later funding rounds should add to returns (from a cash perspective). 

Focusing on the current environment – where are you finding opportunities? 

Rupert: When you step back and look at the last few years, it’s hard to overstate how challenging the environment has been for everyone – and particularly for people trying to build and grow small businesses. We’ve had domestic political instability, Covid, a sharp inflationary cycle, and prolonged pressure on both business and consumer confidence, followed by yet more uncertainty. Layer on top the current geopolitical backdrop and the pace of technological change, particularly around AI, and it’s made investment decisions unusually complex. 

That said, you simply can’t do this job without having a fundamentally positive outlook – investors tend to be cynical optimists by nature. And there are good reasons for that optimism today. Global growth remains relatively robust, balance sheets across both consumers and businesses are in better shape than many might expect, and debt levels (outside government) are not unusually high. Savings have built up over recent years, and as interest rates come down, the appeal of holding cash starts to diminish. 

Historically, that’s when capital begins to flow again – into spending, into growth, and into investment. Compared with the peak of the inflationary shock a couple of years ago, the environment is easing, and as conditions stabilise across the capital stack, we expect to see a materially stronger backdrop for investing in ambitious scale up businesses.

(Commentary from February 2026)

“Extending the EIS and VCT limits increases the real-terms generosity of the schemes. This continues to provide support to new and early-stage companies, as well as those scaling up” 

gov.uk, November 2025

References

1 Over the last 12 months to August 2025, compared to the minimum revenue requirement of £1 million, typically seen with other VCT/EIS providers. Source: Puma Investments, June 2025.

2 As of June 2025, based on the number of companies in the portfolio. Source: Puma Investments.