VCF partners has announced they will acquire Advent Fund Managers from Advent Venture Partners.

"The deal may kick-start consolidation in a UK VCT industry that has experienced some turbulent times of late. Said Fairman: “There will undoubtedly be other deals of this nature. As markets develop, the money always moves to the bigger and more successful managers. VCTs are expensive to run because of listing costs and maintaining boards of directors, and you need at least £12 million in capital for it to make sense. I am sure there are other VCT businesses looking for a home.” PrivateEquityOnline

Another point is that there is a real problem of scale with smaller funds- which makes it difficult to fund enough companies for "porfolio theory" to kick in. If that doesn't happen, these early-stage funds must make relatively safe bets on each firm they fund. Larger funds will mean riskier projects can be financed, which in turn fuels innovation in the UK. Consolidation combined with the VCT tax incentives should provide the type of growth Gordon Brown was trying to encourage.