Private Markets: A Quick Chill After the Olympics
After pounding through the pandemic and bagging a stellar 2021, private markets hit the brakes, especially in tech and life‑science. The dip is real, but remember—those were the times when valuations were flying higher than a sunrise in a summer blockbuster.
Why the Been‑a‑Little‑Down?
- Tech Boom to Bust: Venture funds have been riding the tech wave—growth, hype, high‑flying valuations. Now the tide’s receding.
- Life‑Sciences Lull: The promise of medical breakthroughs is still gold, but investors are cautiously sipping the cocktail.
- Long‑Term Love Story: VC money is a marathon, not a sprint. Good companies can weather the storm. The market’s swing? A temporary hiccup.
What Does This Mean for You?
Experienced investors and savvy fund managers are turning the current slump into a treasure hunt. They’re hunting for quality deals—both in the public market and in the private realm—where the next big thing is available at a discount.
Quick Takeaway
Stay the course: VC plays are deep‑water. Short‑term dips are fine for those who can ride the waves. If you’re in the track, keep your eyes on the next breakthrough—often invulnerable to market jitters.
What do you believe will be the main challenges in 2024?
Why a Hot Bank Rate Hits Everyone in the Investment Crowd
Short‑answer: When the Bank Rate climbs, borrowing costs go up. That means each investor’s wallet takes a hit and valuations across the board—yes, even the private unicorns—might feel the squeeze.
Ride the Rollercoaster – Investors Who’re Ready for the Loop‑De‑Loop
- EIS & VCT value the long haul: They know that buying a stake in a barely‑profitable start‑up isn’t a quick sprint. It’s a marathon with lots of unpredictable corners.
- Flexibility is the name of the game: Those schemes let investors stay patient, weathering the brief heat‑up without jumping ship.
- Risk, but with a safety net: If the market takes a dip, the tax shields in EIS and VCT help cushion the blow.
How These Schemes Keep the Birds in the Nest
Private companies often find it tricky to raise fresh cash—especially on their first run. Here’s how the schemes step in:
- Spotlight for riskier ventures: Think of it as spotlight lighting on a stage where the strung‑up players can still get the applause (or funding).
- Tax-only sweeteners: UK backers receive mileage rewards—like a bonus ride for each one of their shares—making the dive into unquoted equity a lot more appealing.
Bottom Line
In short, even when the Bank Rate fires up the cost of capital, the EIS and VCT frameworks give investors a buoy and new firms a lifeline. It’s a win‑win for those who dare to bet on the next hidden gem in the market.
Where do the best opportunities lie?
What’s Hot Right Now: Life Sciences & Tech Are Juicy!
Been hearing the buzz? The life‑sciences and tech arenas are cooking up some big‑bang deals that aren’t breaking the bank. These industries are the speed‑bump for growth—think cutting‑edge drugs, AI, and smart gadgets—yet they’ve always been thirsty for capital. That thirst has historically pushed valuations sky‑high.
- Fast‑Tracking Innovation – New breakthroughs come out faster than a blinking LED.
- Capital Hungry, But Less Pricey – Investors can now snag stakes without needing a small fortune.
- Opportunity Spike – Prices are aligning with reality, making these plays more accessible than a discounted pizza slice.
Bottom line: It’s a great time to dive in, because the numbers are looking friendlier, and the upside is bound to keep growing. So grab a coffee, sit back, and let’s watch the markets roll out the red carpet for us.
What does fundraising look like in 2024 for the sector?
Why the World’s Throwing a Money Party and Cash Looks Warmer
Geopolitical drama, sky‑high borrowing costs, and inflation that’s stuck its nose in way too deep are turning investors into cautious cats. Every headline about a crisis or a rate hike feels like a scary movie, so the obvious safety net for many is the cold, unyielding glow of cash.
Seven Tips to Nail Your Self‑Assessment—Because Who Has Time to Mess Up?
- Start Right Outta the Block
Open your Return before the deadline (or else the taxman gets a chance to haunt you). - Keep the Numbers Clean
Double‑check every figure—cents matter when the govt’s watching. - Pull in All Income Streams
Don’t forget that side hustle, that freelancer gig, or that cryptic trust. Every source asks for a share. - Know the Deductions You’re Allowed
From office supplies to home office mileage, it’s all gold if you’ve got the right receipts. - Watch for Capital Gains
If you sold shares, bonds, or crypto, you’ll have to report a little profit—or a loss—to avoid a penalty. - Re‑check the Tax Code Applies
2024‑shelf has updates—make sure you’re using the latest rules. - Ask for Help When You’re Stuck
It’s easier—and cheaper—than the £50,000 fine that could come from an error.
Why Cash Might Be the Short‑Term She‑Dare
All that chatter about the “cash‑only” approach is becoming a bit of a fad. While holding cash feels nice in a turbulent market, thinking it’s the ultimate refuge can blind you to bigger, perky opportunities.
From Cash to Growth – The Investor’s New Go‑To
As managers of Equity Investment Schemes (EIS) and Venture Capital Trusts (VCTs), we keep our eyes on the next big thing—a company that’s primed to grow the next year, then pop the champagne when it’s sold at a lofty multiple. And the tax perks? 30 % income‑tax relief right off the bat, and a tidy “no‑capital‑gains‑tax” on the upside. Talk about a sweet deal.
So, if you’re feeling the urge to stash away your portfolio in a safe‑haven, consider that a set of jars might not be the only thing to keep your wallets healthy. Investing in a high‑growth company with a tax‑friendly umbrella can keep you ahead of the curve, while also putting us on a path to a jackpot that outperforms even the jitteriest market scenarios.
What does a potential change in UK government mean for the sector?
UK Tax Reliefs Get a Long‑Term Power‑Up—No Time For Downtime
Jeremy Hunt, the Chancellor, just pushed the sunset clock for both the Enterprise Investment Scheme (EIS) and the Venture Capital Trust (VCT) out to April 2035. That means investors who keep their foot in the door of these schemes will keep enjoying the tax breaks, as long as they stay plugged in.
Labour Cheers the Good News
Shadow Chancellor Rachel Reeves made a quick, upbeat rallying cry: “Labour should keep the incentives alive – SEIS, EIS and the R&D tax credit – so that investors and start‑ups get the best tools to grow.” She’s basically saying: “If you want a thriving economy, keep these schemes running.”
The Real‑World Upside
- Fuel for Innovation – The extra funding lets start‑ups test new ideas without drowning in red‑tape.
- Job Creation – More capital feeds more teams, which means more jobs to fill.
- Productivity Boost – When companies can invest in what matters, they get faster, smarter results.
- Growth Engine – All this adds up to a louder, faster racing UK economy.
All in all, it’s a win for entrepreneurs, a win for employees, and a win for the bottom line. Let’s keep the incentives rolling and watch the economy sprint to the next milestone.
