How does Baronsmead stack up against the competition?
The Baronsmead VCTs, managed by Gresham House, represent a long-standing and distinct proposition within the VCT market.1 When compared against the top-performing VCTs on the metrics of total return and dividend yield, a clear picture emerges of a trust with a different risk-return profile, driven by a unique investment strategy.3
Performance on Total Return
The primary metric for assessing a VCT manager’s performance is the 5-year Net Asset Value (NAV) Total Return. On this measure, the Baronsmead VCTs have delivered significantly lower returns compared to the sector leaders over the last five-year period.
- Baronsmead Venture Trust delivered a 5-year NAV Total Return of 9.0%.4
- Baronsmead Second Venture Trust delivered a 5-year NAV Total Return of 9.8%.4
This performance is considerably below the average for Generalist VCTs, which was 33.1% for the same period, and trails the top performers by a substantial margin.4 For context, the top-ranked VCTs from the initial analysis delivered returns such as 94.2% (Foresight VCT) and 74.3% (British Smaller Companies VCT).4 This indicates that over the past market cycle, the Baronsmead strategy did not capture the same level of capital growth as its top-tier peers.3
Differentiating Investment Strategy
The divergence in performance can be largely attributed to Baronsmead’s distinct “hybrid” investment strategy.3 Unlike many VCTs that focus almost exclusively on direct investments into unquoted companies, the Baronsmead portfolio is constructed with three core components:
- Direct Unquoted Investments: Like other VCTs, it invests directly in early-stage, high-growth UK businesses across sectors like technology, healthcare, and business services.1
- AIM-Quoted Companies: The portfolio includes a significant allocation to companies listed on the Alternative Investment Market (AIM).5
- Listed Equity Funds: A substantial portion of the portfolio is invested in other open-ended funds also managed by Gresham House, such as the WS Gresham House UK Micro Cap Fund and the UK Smaller Companies Fund.3
This fund-of-funds approach provides a high degree of diversification, spreading risk across a much larger number of underlying companies than a typical VCT.3 However, this structure also means that the VCT’s performance is a blend of direct venture capital returns and the performance of these other public equity funds. While this may offer stability, it can also dilute the high-growth potential from direct, successful venture capital exits that have driven the outsized returns of the top-performing VCTs.
Performance on Dividend Yield
Where Baronsmead VCTs compare more favorably is in their objective for income generation. The board has a stated dividend policy that uses a target of 7% of the opening NAV of the financial year as a guide when setting dividends.9
This is an ambitious target, placing it in the same category as the Gresham House Income & Growth VCTs, which were highlighted in the initial report for their income focus. The current dividend yield for Baronsmead Venture Trust is approximately 7.75%, confirming its status as a high-yielding VCT.9
Conclusion: A Comparison Summary
| VCT | 5-Year NAV TR (%) | Dividend Target | Investment Focus |
| Foresight VCT | 94.2% | ~5% of NAV | Generalist Growth (Direct) |
| British Smaller Co. VCT | 74.3% | Attractive long-term yield | Tech-enabled B2B (Direct) |
| Gresham House I&G VCT | 56.3% | 7% of NAV | Generalist Growth (Direct) |
| Baronsmead Venture Trust | 9.0% | ~7% of NAV | Hybrid (Direct, AIM, Funds) |
| Generalist VCT Average | 33.1% |
Source for performance data: Morningstar, Wealth Club. Data to 30 June 2025.4
In summary, the Baronsmead Venture Trust does not compare favorably with the best-performing VCTs on a total return basis over the last five years. Its hybrid investment strategy, while highly diversified, has resulted in performance that lags both the sector leaders and the generalist VCT average.4
However, for an investor whose primary objective is to generate a high level of regular, tax-free income, the Baronsmead Venture Trust is a strong contender. Its 7% dividend target and high current yield make it a competitive alternative to other income-focused VCTs.9 The choice ultimately depends on an investor’s priority: for maximum capital growth, the top performers from the initial analysis remain superior; for a high and consistent dividend stream, Baronsmead Venture Trust warrants consideration.