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Octopus Investments targets £20 million joint fundraise for its AIM VCTs

Octopus Investments, part of Octopus Group and the largest provider of venture capital trusts (VCTs) in the UK¹, has today announced the launch of a £20 million joint fundraise for its two Alternative Investment Market (AIM) VCTs.

The VCTs offer investors access to a wide range of AIM listed growth companies across a diverse range of sectors, from building materials and pharmaceuticals to software development and online fashion. The portfolios are made up of around 75 companies which have been built over a number of years and aim to provide investors with long term growth as well as income through their established dividend policies.

The latest fundraising offers investors the opportunity to invest into both Octopus AIM VCT plc (AIM VCT) and Octopus AIM VCT 2 plc (AIM VCT 2), which both target a 5% tax free dividend yield every year.

Richard Power, Head of Smaller Companies at Octopus Investments, said:

“Although the number of companies floating on public markets has been affected by the recent market backdrop, AIM has successfully raised over £3 billion in the year to 31 October 2019.  AIM remains the venue of choice for ambitious growth companies looking for access to capital to further develop their business in public markets. Our team has tremendous depth of experience and we will be looking to find those companies that we believe to have a significant growth opportunity ahead.”

Creo Medical, which uses cutting-edge technology to redefine the limits of minimally invasive surgery, is just one example of an exciting growth company backed by the Octopus AIM VCTs. The company’s technology harnesses radiofrequency energy and microwave power, meaning its miniature endoscopic instruments can cut and remove soft tissue, as well as helping to stop bleeding more quickly. This can help reduce recovery times and the risk of complications, as compared to open surgery.

Paul Latham, Managing Director of Octopus Investments, commented:

By providing access to the growth potential of smaller companies in a highly tax efficient manner, AIM VCTs offer a unique investment proposition and are increasingly being used to complement retirement plans. Demand continues to be driven largely by the reduction in the pension lifetime allowance and recent changes to the tax regime for buy-to-let, with more people now looking for complementary tax-efficient investments such as VCTs.”

“As a result, we expect VCT demand from financial advisers and investors to remain consistently high. What’s different this year is that some of the more popular VCTs are fundraising less. This is likely to mean they fill more quickly.”

The new share offer for AIM VCT and AIM VCT 2 is open until 5th April for the 2019/2020 tax year and 29th November 2020 for the 2020/2021 tax year. The offer will close earlier if it becomes fully subscribed. In the previous tax year both AIM VCTs filled within two months of opening2 

Investors have the option to split their investment 60/40 between AIM VCT and AIM VCT 2, or to place 100% of their investment into either VCT. The minimum investment is £5,000.

– Ends –

¹ The Association of Investment Companies, Interactive Statistics – as at November 2019

2 In the previous tax year the AIM VCTs opened on 3rd Aug 2018 and closed 2nd Oct 2018 after raising £30 million.

Notes to editors

Performance

One of the advantages of VCTs for income-seeking investors is that they have the potential to pay out their profits to investors in the form of tax-free dividends. Dividends cannot be guaranteed, but both Octopus AIM VCTs target an annual dividend of 5% of the share price. In addition, the VCTs can pay special dividends if there are significant gains from the sale of portfolio holdings. As the two VCTs pay dividends at different times of the year, investing in both VCTs offers the potential for investors to receive four dividend payments per year.

 Discrete 12-month performance data over last five years

12-month performance to 31 October 2019

2015

2016

2017

2018

2019

Octopus AIM VCT NAV Total return1

8.9%

3.7%

18.4%

-2.3%

-8.4%

Octopus AIM VCT 2 NAV Total Return1

8.5%

5.8%

17.4%

-1.9%

-7.4%

FTSE AIM All-Share Total Return2

3.9%

13.1%

28.1%

-4.9%

-7.5%

FTSE All-Share Total Return2

3.0%

12.2%

13.4%

-1.5%

6.8%

Octopus AIM VCT Dividend Yield3

9.1%4

4.9%

5.3%

4.8%

5.1%

Octopus AIM VCT 2 Dividend Yield3

7.9%4

5.4%

5.4%

4.9%

10.1%4

Past performance is not a reliable indicator of future results and may not be repeated. Dividends are not guaranteed, and tax treatment is subject to change. Please note, the NAV per share may be higher than the share price, which is the price you may get for the shares in the secondary market.

1NAV total return: The performance table above shows the total return of the Octopus AIM VCTs over the last five years to 31 October. The annual total return is calculated from the movement in NAV over the year to 31 October, with any dividends paid over that year then added back. The revised figure is divided by the NAV at the start of the year to get the annual total return.

2FTSE AIM and All Share total return: Performance is shown alongside the total returns of the FTSE AIM and FTSE All Share indices, which are indicators of activity in the broader UK equity market (source: Lipper). Note that none of these indices are used as benchmarks for the Octopus AIM VCTs.

3Annual dividend yield: The annual dividend yield is calculated by dividing the dividends paid per annum by the NAV at the start of the period.

4Includes an additional special dividend.

These figures exclude a special dividend announced by Octopus AIM VCT which will be paid in January 2020.

About Octopus Investments

Octopus Investments, part of the Octopus Group, is an award-winning, fast-growing investment business dedicated to delivering quality services and products to financial advisers and investors across the UK. We offer a broad portfolio ranging from tax-efficient investments to multi-manager funds, UK smaller company investing, cash management and peer to peer lending. At Octopus we champion the value of financial advice and passionately believe that more people and their families could benefit from financial planning. We want to change the world of investments by offering a straight-talking approach, exceptional customer service and a range of products that aim to do what they say they will.

About Octopus Group

Octopus is a group of innovative, entrepreneurial businesses investing in the people, ideas and industries that will help to change the world. We are experts in financial services and energy, transforming these markets by offering our customers access to smart and simple solutions that do what we say they will. Today we manage more than £8.3 billion on behalf of retail and institutional investors. Octopus Energy, Octopus Investments, Octopus Renewables, Octopus Real Estate, Octopus Ventures, Octopus Wealth and Seccl Technology are all part of Octopus Group. Visit octopusgroup.com.

For journalists in their professional capacity only. The value of an investment, and any income from it, can fall as well as rise. Investors may not get back the full amount they invest. 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. 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 and the Key Information Document, 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. We record telephone calls. Issued: December 2019.