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Octopus Investments becomes the first VCT investment within an ISA as it announces record fundraise for Titan

  • First provider to offer ISA wrapper on a VCT due to combined expertise as a VCT and ISA manager
  • UK’s largest VCT, Octopus Titan VCT, targets record £120 million to meet increasing entrepreneurial and investor demand
  • Octopus opens up VCT market to give more people the opportunity to access the growth potential of the next generation of UK business 

Octopus Investments, a fast-growing UK fund management company and the largest provider of venture capital trusts (‘VCTs’) in the UK[1], is enabling people to invest in VCTs for the first time through their ISA.

The innovative move comes as Octopus announces the launch of the latest fundraise for its Titan Venture Capital Trust (‘Titan’), the largest VCT in the UK, with a record-breaking target of £120 million with the potential for a further £80 million, subject to demand. The news comes on the back of growing demand for its flagship VCT.

This is the largest ever fundraise for a VCT and once fully subscribed, would take the total fund size to over £600 AUM, providing significant capital for investment in early stage businesses across the UK.

Titan offers investors comfortable with the risks of smaller company investing, attractive tax incentives that accompany a VCT and access to a well-established and diverse portfolio of around 50 smaller companies. These range from very young early stage businesses, such as the retail property marketplace company Appear Here, to well-known household names including Secret Escapes, the members-only holiday company. For the first time, the market-leading VCT provider will offer investors the opportunity to invest in a VCT using assets already within their ISA portfolio.

Paul Latham, Managing Director at Octopus Investments, said:

“It’s a truly exciting time for VCTs. Figures have shown that during the last tax year, VCT demand was the strongest in a decade[2], an increase that has been fuelled by changes to pensions legislation and the buy-to-let market in recent years. VCTs are now seen by many to be a powerful planning tool, and have proved popular with those looking for a tax-efficient way to complement and diversify their portfolio

“By enabling people to invest in a VCT through their ISA, we are opening up the VCT market to more investors. We want to give people the opportunity to access the planning benefits of a VCT and the growth potential of some of the UK’s most exciting growth companies.”

On the back of continuing changes to pensions and following requests from advisers and investors, Octopus was the first manager to introduce a direct debit scheme last year to enable investors to make monthly contributions into their VCT. Titan was the first VCT in the UK to offer this service, with new share issues to investors at around three monthly intervals.

Paul Latham added:

“As market leader, we are proud to be able to meet both adviser and investor demand for different ways to invest in a VCT, whether through an ISA or their direct debit, while helping to drive further funding into such a vibrant sector of the UK economy.”

VCTs have proved to be a vital source of funding, and continue to play a critical role in helping to develop the next generation of UK business.

Jo Oliver, fund manager of the Octopus Titan VCT, commented:

“Since we launched Titan ten years ago, we have seen the UK entrepreneurial scene thrive and flourish. Europe has become a hub for building world-class technology companies. In 2010 there were only two European tech businesses valued over $1 billion and yet there are now nearly fifty, only seven years later. Eighteen of these are headquartered in the UK.

“The investment opportunity for early stage investing in this country is huge. Titan often backs successful companies from the earliest stage of their development working closely with the talented entrepreneurs building them. We are incredibly excited about the strength of the pipeline of investment opportunities for us over the coming years as we enable investors to access the growth potential of these businesses.”

VCTs offer investors up to 30% upfront income tax relief providing that shares in the VCT are held for at least five years, as well as tax-free dividends and tax-free growth. Titan has an impressive track record of paying dividends, having announced total dividends of 66p per share to investors since it was first launched.

The share offer is open until 4 September 2018, but may close earlier. The minimum investment is £3,000 while the maximum investment qualifying for tax relief is £200,000.

– Ends –

Notes to Editors

[1] Source: The Association of Investment Companies, April 2017

[2]Source: The Association of Investment Companies, April 2017

About Venture Capital Trusts

Venture Capital Trusts (VCTs) were introduced by the government in 1995 to encourage much-needed investment into smaller companies, driving job creation and economic growth in the process. They offer a number of tax incentives for those investors comfortable with the associated risks of smaller company investments, including up to 30% upfront income tax relief providing that shares in the VCT are held for at least five years, as well as tax-free dividends and tax-free growth. Whilst these incentives are subject to certain HMRC legislation and personal circumstances they remain very attractive for those willing to put their capital at risk through investing in a VCT.

Dividends

Octopus Titan VCT aims to pay regular tax-free dividends of at least 5p per share annually, as well as offering investors the potential for special dividends if portfolio companies are sold at a significant profit. Since its launch in 2007, it has announced total dividends of 66p per share to investors. While profits are usually paid out to investors as tax-free dividends, if the shares do rise in value, there’s also no capital gains tax to pay when you eventually choose to sell them. Past performance is not a reliable indicator of future results.

Five year performance

 

30/04/2013

30/04/2014

30/04/2015

30/04/2016

30/04/2017

Annual total return

33.8%

9.6%

11.4%

7.2%

4.7%

Annual dividend yield

38.3%

5.6%

5.4%

9.2%

5.2%

Source: Octopus Investments, 20 April 2017

The performance information above shows the total return of Octopus Titan VCT for the last five years to 30 April, the VCT’s interim accounting period. The annual total return for Octopus Titan VCT is calculated from the movement in net asset value (NAV) over the year to 30 April, with any dividends paid over that year then added back.

For journalists in their professional capacity only. The value of an investment, and any income from it, can fall or rise. Tax treatment depends on individual circumstances and may change in the future. Tax reliefs depend on the VCT maintaining its VCT-qualifying status. VCT shares could fall or rise in value more than other shares listed on the main market of the London Stock Exchange. They may also be harder to sell. Past performance is not a reliable indicator of future results. Investors may not get back the full amount they invest.  Personal opinions may change and should not be seen as advice or a recommendation.  We do not offer investment or tax advice. We recommend investors seek professional advice before deciding to invest. This advertisement is not a prospectus. Investors should only subscribe for shares based on information in the prospectus, which can be obtained from octopusinvestments.com. Issued by Octopus Investments Limited, which is authorised and regulated by the Financial Conduct Authority. Registered office: 33 Holborn, London, EC1N 2HT. Registered in England and Wales No. 03942880. Issued: September 2017.