Weekly Briefing: Alternative Asset Managers Scale Up, Atom Bank’s 2025 Progress, VCT Investor Survey & Consumer Lending Trends

This week’s briefing spans shifting investor incentives, household borrowing behaviour, international asset management, and a year of strong execution from a UK challenger bank.

Together, the stories reflect how capital allocation decisions - by governments, households, and institutions - are shaping behaviour across markets.

From tax policy changes affecting venture funding to signs of financial strain and confidence among consumers, the themes are grounded in real-world responses rather than forecasts.

We also look beyond the UK, with expansion plans in the Gulf, before closing with a company update closer to home.

Read on for the full context.

VCT Relief Cuts Trigger Investor Pullback

A new survey brings more concrete suggestions that proposed changes to Venture Capital Trust (VCT) tax relief could materially reduce investor participation. According to the survey by Wealth Club, 85% of respondents plan to invest less or nothing at all in VCTs once income tax relief is cut from 30% to 20% from April 2026.

The findings are based on responses from 511 high-net-worth and sophisticated investors, including 474 existing VCT investors. Out of the 85% mentioned, it was split nearly half and half between people who would choose to stop VCT investments entirely and those who would simply reduce investments.

Almost all respondents (96.4%) want the government to reconsider the decision, and 85.6% believe the cut will, to some degree, reduce overall investment into UK start-ups. It’s almost certainly a damaging change for VCTs and the ‘bad press’ seems to be effecting the wider industry as well.

Wealth Club CEO Alex Davies pointed to historical precedent. He noted that the last time VCT relief was reduced by 10%, fundraising fell 65% year-on-year, and when relief last stood at 20% in 2003/04, the industry raised just £70m compared with nearly £900m in 2024/25.

He concluded: “VCTs have been a crucial source of funding for the UK’s small and growing companies over the last 30 years… we expect VCT investment to fall off dramatically next tax year. That is bad news for the hundreds of small UK companies that rely on VCTs for funding.”

As we highlighted in our earlier piece on this change, this looks to be an incredibly short-sighted decision. More importantly, it represents a missed opportunity to strengthen, rather than undermine, an established industry that supports economic growth, job creation, and innovation across the UK.

Credit Card Borrowing Accelerates Into Winter

UK households turned increasingly to credit in November, with consumer borrowing rising at the fastest annual rate in almost two years.

According to the Bank of England, individuals borrowed an additional £2.1bn in consumer credit during the month, up from £1.7bn in October.

Credit card borrowing accounted for £1bn of this increase, compared with £700m the previous month. Annual growth in credit card borrowing rose from 10.9% to 12.1%, the highest rate since January 2024, reflecting pressure on household finances ahead of Christmas - yes, January 2024, is now 2 years ago! 

Other forms of consumer credit, including personal loans and car finance, also edged higher. Experts suggested the rise likely reflects both seasonal spending and the increasing difficulty of covering everyday costs without borrowing.

This came against a mixed inflation backdrop. While headline inflation has fallen to 3.2%, it remains above the Bank of England’s 2% target, and food prices continued to rise. British Retail Consortium data showed food price inflation increased to 3.3% in December, even as non-food prices fell due to heavy discounting.

Despite higher borrowing, households also increased savings, with bank deposits rising by £8.1bn in November, according to the Bank of England. Interestingly, this signals financial caution alongside credit use. Mortgage approvals, meanwhile, fell slightly to 64,500, reflecting a slowdown in the property market post Autumn Budget.

Simon Trevethick of StepChange said: “For many households, the increase in consumer credit borrowing in November may reflect the reality that everyday costs are becoming harder to manage without turning to credit… our own polling found that 14 million people would struggle to afford Christmas.”

Gulf Asset Managers Scale Up Ambitions

In the Middle East, competition in private markets continues to intensify as regional firms seek greater scale. Bloomberg reports that Gulf Islamic Investments (GII), a Dubai-based alternative asset manager, is targeting $10bn in alternative assets under management by the end of the decade, nearly tripling its current size.

To support that growth, GII is exploring options to raise up to $400m in the near term through a capital increase and Islamic debt issuance. Alongside fundraising, the firm is assessing acquisition opportunities to accelerate expansion.

Founded in 2014, GII operates across Abu Dhabi, Dubai, and Riyadh and has deployed more than $1bn across private equity, real estate, and private credit over the past four years. It typically co-invests 20% to 30% of equity in its transactions, with the balance coming from institutional and high-net-worth investors.

The strategy reflects broader shifts in the region. As global buyout and private credit firms increase their presence in the Gulf, competition for deals and talent has intensified, but so has the pool of potential co-investors and capital partners.

GII has positioned itself as a local gateway for international capital, particularly as deal sizes grow and regional markets mature. In late 2024, the firm completed an oversubscribed $100m capital increase and reported assets under management of more than $4.5bn.

Executives have framed the latest push as building a scaled, Middle East-based alternative asset manager with a broader product set capable of competing with international peers over the long term.

Atom Delivers Growth With Discipline

Atom, one of GCV Invest's external portfolio companies, has reported a strong year of operational and financial progress, delivering against the plan agreed with its Board while expanding both lending and deposits. Total loan balances increased by 29% to £5.3bn, significantly outpacing the UK’s largest banks, whose loan books have grown at around 2% annually over the past four years.

Customer numbers rose by 19%, supported by competitive savings rates. Atom offered UK savers 52% more interest on instant access savings than the market average, contributing to deposit balances growing by 31% over the year.

To add on top of these positive stats, the bank’s customer experience metrics remain a clear differentiator amongst its competitors. Atom is the highest-rated UK bank on Trustpilot, as well as the highest-rated savings bank and mortgage lender, with a Net Promoter Score of 89.

In late 2025, Atom moved into its new headquarters at the Pattern Shop in Newcastle’s Stephenson Quarter, marking a transition from its first decade in Durham. The historic building, once central to the work of the Stephenson brothers, will house the next phase of the bank’s growth.

Investment continues across products and capabilities, seeing its first ISA on the app in late 2025, expanding its savings range in 2026, and progressing work on second-generation credit models and an IRB waiver application. Atom also remains one of the UK’s largest four-day-week employers and has committed to becoming climate positive by 2035.

Atom’s leadership summarised the approach: the bank gathers deposits to lend into the real economy rather than relying on placing funds at the Bank of England, with the aim of helping customers buy homes, build businesses, and plan for the future.

Final Note

Across this week’s stories, a common thread emerges around how incentives and confidence shape behaviour. Policy decisions are influencing investor appetite, households are balancing caution with necessity, institutions are scaling to stay competitive, and challenger banks are growing by sticking closely to their stated purpose.