A venture capital trust or VCT is a highly tax efficient UK closed-end collective investment scheme designed to provide private equity capital for small expanding companies, and income (in the form of dividend distributions) and/or capital gains for investors. VCTs are a form of publicly traded private equity, comparable to investment trusts in the UK or business development companies in the United States.
VCTs are companies listed on the London Stock Exchange, which invest in other companies which are not themselves listed. First introduced by the Conservative government in the Finance Act 1995 to encourage investment into new UK businesses, they have proved to be much less risky than originally anticipated.