Core Viewpoint - The interim management statement for Hargreave Hale AIM VCT PLC highlights a strong recovery in equity markets, particularly in the AIM sector, despite ongoing economic challenges in the UK. The company has reported its best quarterly performance in four years, driven by positive investment returns and strategic positioning in the market [2][4][6]. Investment Performance - The unaudited NAV per share increased by 1.95 pence from 34.48 pence to 36.43 pence, resulting in a total return of 5.66% for the quarter [7]. - Qualifying investments returned 1.42 pence per share, while non-qualifying investments gained 0.71 pence per share [7]. Market Overview - Following Liberation Day, market volatility was replaced by a more constructive outlook, with expectations of tariffs on US imports settling between 15-20%, which is lower than initial fears but higher than historical averages [3]. - The UK market benefited from an early trade deal with the USA, leading to strong gains in equity markets, particularly in AIM, which recorded a 12.1% increase [4][6]. Economic Context - The UK economy continues to face challenges, with a rising unemployment rate and mixed consumer confidence. However, June PMI data indicates a potential improvement after two months of contraction [5]. - Inflation is expected to peak in the current quarter, allowing for potential interest rate cuts, which could positively impact small company valuations [5]. Qualifying Investments - Cohort saw a significant increase of 29.5% in valuation, supported by a strong order book and positive trading outlook [9]. - The Property Franchise Group reported a 31.0% increase in valuation, driven by strong EBITDA growth following strategic mergers and acquisitions [10]. - Gousto's valuation increased by 51.8% due to good operating performance and rising peer valuations [11]. - Eagle Eye experienced a decline of 44.8% due to the loss of a significant contract, impacting revenue forecasts [12]. - Oberon Investments Group and Maxcyte saw declines of 18.6% and 22.5%, respectively, with Maxcyte de-listing from AIM [13][14]. Non-Qualifying Investments - The non-qualifying portfolio saw an increase of £1.28 million, with Chemring and Wickes performing well, while Shell and Hollywood Bowl faced declines [15]. Portfolio Structure - The VCT ended the period at 93.25% invested, comfortably above the HMRC defined investment test [16]. - The market for new qualifying investments remains subdued, with only two VCT qualifying IPOs in the last 12 months [17]. Share Buybacks and Discount Control - The company acquired 1.5 million shares at an average price of 33.54 pence, with the share price increasing from 33.8 pence to 34.10 pence during the quarter [22]. Post Period End - As of 18 July 2025, the unaudited NAV per share decreased slightly to 36.34 pence, while AIM increased by 0.54% [23].