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UK’s largest venture capital trust (VCT) launches new fundraising

  • UK’s largest VCT, Octopus Titan VCT, targets £120 million fundraise to meet sustained entrepreneurial and investor demand
  • ‘Early bird’ and loyalty discounts are currently available – including initial fee reduction
  • Titan is the only VCT that you can access within an ISA wrapper – with previous tax year transfers accepted

Octopus Investments, part of Octopus Group and the largest provider of venture capital trusts (‘VCTs’) in the UK, today announces it has opened fundraising for Octopus Titan VCT (Titan).

Octopus is targeting another £120 million fundraise for its flagship VCT. This follows last year’s record-breaking fundraise when Titan raised a total of £200 million.  If fully subscribed, the total fund size could rise to over £800 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 more than 65 potential game-changing smaller companies.

The investment team specialises in some of the most exciting tech-driven businesses in the UK, with the potential to scale internationally. One such example is the AI-powered language learning app, Memrise, which has grown rapidly to more than 35 million users, while another is Sofar Sounds, which hosts intimate music events in more than 415 cities across the globe every month. 

Titan was also an early investor in Zoopla Property Group, the first VCT backed business to reach a £1 billion valuation, alongside other well-known names such as the snack company Graze and predictive keyboard software, SwiftKey.

Paul Latham, Managing Director at Octopus Investments, said:

“VCTs continue to grow in popularity, with demand reaching its highest level in a decade last year2. This is being driven partially by changes to pension and buy-to-let legislation, but also by those looking for a tax-efficient way to complement and diversify their portfolio. 

“Titan’s investment team is now one of the largest in Europe and has a vast amount of experience investing in early-stage companies that are right in the sweet spot of VCTs. Combined with its diverse and established portfolio, Titan has proven popular with investors keen to access the enormous growth potential of these businesses. Last year we raised a record £200 million well ahead of time and, with fewer VCTs fundraising this year, it could close even earlier this time around.”

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 and targets at least 5p per share annually. Since it was first launched in 2007 it has announced total dividends of 71p per share to investors.

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

“Titan has been investing in innovative early-stage companies for more than a decade now, and the pipeline of investment opportunities is as strong as it’s ever been. Whether in healthcare, retail, industry, or financial services, there is absolutely no shortage of talented tech entrepreneurs who have the potential to completely transform their markets. This is a testament to the continued evolution of the UK’s entrepreneurial ecosystem, which is now recognised as one of the best places to build world-class technology companies.”

Last year Octopus became the first (and remains the only) VCT provider to offer an ISA wrapper on a VCT. This enables investors to transfer any existing ISA funds (from previous tax years 2017/18 or prior) to a new Titan VCT ISA, while maintaining all the benefits of VCT investing.

The share offer is open until September 2019 but may close earlier if fully subscribed. The minimum investment is £3,000 while the maximum investment qualifying for tax relief is £200,000.

-Ends-

Notes to Editors

(2) The Association of Investment Companies (AIC) – April 2018

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 (as of 30 June 2018)

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 71p 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.

Discrete 12-month performance data over last five years

Year to 30 April 2014 2015 2016 2017 2018
Annual total return 9.6% 11.4% 7.2% 4.7% 4.3%
Annual dividend yield 5.6% 5.4% 9.2% 5.2% 5.3%
Total value 137.2p 147.7p 154.7p 159.2p 163.3p

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. The revised figure is divided by the NAV at the start of that year to get the annual total return. Total value is calculated as the sum of the NAV per share in pence and cumulative dividends per share in pence for the last five years to 30 April.

Just to remind you, the NAV is the combined value of all the assets owned by the VCT after deducting the value of its liabilities (such as debts and financial obligations). The performance shown is net of all ongoing fees and costs. The annual dividend yield is calculated by dividing the dividends paid per annum by the NAV at the start of the period.

The Board of Directors has determined it would be incorrect to compare the NAV of Octopus Titan VCT with those of other VCTs as different year-end dates for other VCTs would result in timing differences in each NAV calculation.

 

Past performance is not a reliable indicator of future results.

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. 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: September 2018.