Octopus Investments, a 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, 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 VCTs aim to provide investors with long-term growth as well as income through their established dividend policies, while the team managing them has accumulated over 140 combined years of experience in smaller company investing.
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. VCTs can enable investors to receive 30% income tax relief (as long as the shares are held for at least five years), tax free growth and tax-free dividends.
Kate Tidbury, Senior Fund Manager at Octopus Investments, commented:
“Across the stock market company valuations have understandably reduced in the face of an uncertain economic and geopolitical climate. The AIM market has felt the effects of that, with many AIM businesses, including businesses in the Octopus AIM VCT portfolio, valued below their long-term averages. Despite the challenging environment, however, qualifying small businesses continued to be able raise funds to help them thrive thanks to VCTs.
“We believe that there is room for valuations to recover when the market outlook improves, and we’re continuing to focus on finding companies and management teams that we think can deliver significant growth over the long-term. We expect to have opportunities to invest the funds raised at attractive valuations.”
The Octopus AIM VCTs’ portfolios contain a range of companies across various sectors, some of which are new additions and some which have been supported for many years; both of which offer significant growth potential.
One example of the exciting growth companies backed by Octopus AIM VCTs is Clean Power Hydrogen (CPH2). Octopus made its first investment in February 2022, after recognising CPH2’s opportunity in the highly sought-after climate technology space. By utilising a safe and sustainable system, CPH2 is able to generate pure hydrogen and oxygen as separate gases to accelerate progress towards a zero-carbon future.
A business held much longer in the portfolio is Scotland based Craneware. The team is led by industry experts and provides software to gather operational, financial, and clinical data that gives healthcare providers valuable insight and enables them to transform their cost, revenue, and compliance structure. Octopus first invested in 2007 and since then it has grown exponentially.
Kristy Barr, Distribution Director for Sales and Customer at Octopus Investments, commented:
“Octopus AIM VCTs can offer advisers a great opportunity to diversify their clients’ portfolios. The fundamentals of investing in the AIM market have remained strong, despite recent market turbulence and although not without risk, investing in smaller companies offers high growth potential alongside opportunities for tax relief.”
The new share offer for AIM VCT and AIM VCT 2 is open until 31st March 2023 for the 2022/2023 tax year and 21 September 2023 for the 2023/2024 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.
- The Association of Investment Companies, Interactive Statistics – as at September 2022
- 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.
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. This document is an advertisement and not a prospectus. Any decision to invest should only be made on the basis of the information contained in the prospectus and the Key Information Documents (KIDs) available at octopusinvestments.com. Personal opinions may change and should not be seen as advice or a recommendation. This is not investment or tax advice. We recommend investors seek professional advice before deciding to invest. 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 2022.