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 battery technology. The portfolios are made up of around 80 companies which have been built over several years. The VCTs 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%2 tax free dividend yield every year.
Richard Power, Head of Smaller Companies at Octopus Investments, said:
“This year AIM marked 25 years since its launch, during which time it has cemented its position as the ‘go to’ market for ambitious growth companies, providing more than £115 billion in capital. It has helped the UK create an increasing number of established, well-known, and often international brands, it really is a brilliant UK success story.”
MaxCyte, a global company that provides a patented cell-engineering platform to biopharmaceutical partners, is just one example of an exciting growth company backed by the Octopus AIM VCTs. The company’s platform, which is best in class within the sector, is used by drug researchers, developers, and manufacturers to produce cells safely in large volume.
Paul Latham, Managing Director of Octopus Investments, commented:
“UK smaller companies have proven themselves time and time again to be a key driver of UK economic growth and job creation, and their success will be vital to the UK’s economic recovery following COVID-19. They also tend to be much more adaptable than their larger peers, setting them in good stead to react quickly and take advantage of new opportunities as they arise. As witnessed in recent months, even during periods of economic stress, AIM continues to prove a great and much needed platform for small companies to access crucial growth capital. This demand is likely to continue, with smaller businesses looking for equity financing as the Government begins to withdraw its financial support for businesses during the COVID-19 outbreak.”
The new share offer for AIM VCT and AIM VCT 2 is open until 5 April for the 2020/2021 tax year and 20 August 2021 for the 2021/2022 tax year. The offer will close earlier if it becomes fully subscribed.
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 –
- The Association of Investment Companies, Interactive Statistics – as at August 2020
- Octopus AIM VCT targets 5% dividend yield or 5p per share, whichever is greater. Octopus AIM VCT 2 targets a 5% dividend yield or 3.6p per share, whichever is greater.
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, 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 | 2016 | 2017 | 2018 | 2019 | 2020 |
| Octopus AIM VCT NAV Total return1 | 1.8% | 19.9% | 6.5% | -12.2% | 3.6% |
| Octopus AIM VCT 2 NAV Total Return1 | 3.6% | 18.7% | 6.0% | -10.8% | 3.6% |
| FTSE AIM All-Share Total Return2 | 2.1% | 32.1% | 12.5% | -13.6% | -3.9% |
| FTSE All-Share Total Return2 | 3.8% | 14.9% | 9.2% | 1.3% | -17.8% |
| Octopus AIM VCT Dividend Yield3 | 4.9% | 5.7% | 4.8% | 4.7% | 9.4%4 |
| Octopus AIM VCT 2 Dividend Yield3 | 5.3% | 5.4% | 4.9% | 4.9% | 11.1%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 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.
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 investments-old.production.octps.co. 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: August 2020.