Octopus Investments, part of Octopus Group and the UK’s largest Venture Capital Trust (VCT) manager1, has announced that its AIM VCTs have closed after raising £40 million in just 24 days.
This makes it the fastest fundraise for the Octopus AIM VCTs in terms of the rate of inflows, averaging more than £1.6 million each day since it opened.
An initial target of £30 million was set when fundraising opened on 19th August. The offer was then extended to £40 million due to the high level of investor demand, which closed on 13th September after reaching the new target.
The VCTs offer investors access to a wide range of AIM listed growth companies across a diverse range of sectors, including pharmaceuticals, biotech, healthcare services, software development and clean energy tech. The portfolios are made up of around 90 companies, more than half of which have been held for over five years.
The two AIM VCTs have performed strongly over the past year2, delivering a total return of 41.7% and 42.1% and both VCTs have recently declared special dividends3 in the period.
Jessica Franks, Head of Retail Investment Products, commented on the record fundraise:
“The performance of the AIM VCTs has been particularly strong over the past 12 months and increasing numbers of investors now recognise the significant long-term growth potential of smaller companies.
“Early indications also suggest that that VCT demand is very high across the market this year. This is being partly driven by the usual factors of tightening of pension contributions and concerns over the lifetime allowance. However, we’re also hearing that some people have built up larger savings over the past 12 months due to fewer holidays or other expenses. VCTs offer an attractive solution for those looking to invest their additional savings tax efficiently while still accessing growth.
“This all means that advisers and investors will need to act quickly to ensure access to the best VCTs. If you wait until March, they might all be gone.”
– Ends –
Notes to editors:
- The Association of Investment Companies, Interactive Statistics – as at August 2021
- 12-month performance to 31 July 2021. See table below.
- Octopus AIM VCT paid a special dividend of 2.5p on 13 August 2021; Octopus AIM VCT 2 has declared a special dividend for payment on 12 November 2021.
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, or 5p per share for Octopus AIM VCT and 3.6p for Octopus AIM VCT 2, whichever is greater. 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 July | 2017 | 2018 | 2019 | 2020 | 2021 |
| Octopus AIM VCT NAV Total return1 | 19.9% | 6.5% | -12.2% | 3.6% | 41.7% |
| Octopus AIM VCT 2 NAV Total Return1 | 18.7% | 6.0% | -10.8% | 3.6% | 42.1% |
| FTSE AIM All-Share Total Return2 | 32.1% | 12.5% | -13.6% | -3.9% | 42.6% |
| FTSE All-Share Total Return2 | 14.9% | 9.2% | 1.3% | -17.8% | 26.6% |
| Octopus AIM VCT Dividend Yield3 | 5.7% | 4.8% | 4.7% | 9.44% | 9.6%4 |
| Octopus AIM VCT 2 Dividend Yield3 | 5.4% | 4.9% | 4.9% | 11.14% | 6.2%5 |
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 July. The annual total return is calculated from the movement in NAV over the year to 31 July, 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.
5Octopus AIM VCT 2 has declared a special dividend of 1.7p, which will be paid on 12 November 2021 to investors who hold shares on 15 October 2021, therefore is not included in this table
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. This information does not constitute 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. Issued: September 2021.