Octopus Investments, part of Octopus Group and the UK’s largest Venture Capital Trust (VCT) fund manager1, today announced the launch of a new £35 million fundraise for its Octopus Apollo VCT (Apollo VCT).
Apollo VCT aims to accelerate the growth of smaller business-to-business (B2B) software companies. The companies, while early-stage and therefore high risk, tend to be established having already brought their product or service to market, with existing recurring revenues and the potential for significant expansion.
Octopus Apollo VCT is managed by a specialist investment team of 13 that sits within Octopus Ventures, one of the largest venture capital teams in Europe2. The team has significant collective investment experience in sourcing investment opportunities, executing deals, and managing portfolios in the B2B software sector.
Apollo targets a dividend yield of 5% per year, as well as offering investors the potential for special dividends and capital growth, although these are not guaranteed. Since its launch in 2006, it has paid total cumulative dividends of 86p per share to investors.
Richard Court, Fund Manager for Apollo VCT said:
“Over the past year, Apollo VCT has demonstrated its ability to maintain robust performance through the current challenging macroeconomic backdrop. This is aided by the fact that the technology companies Apollo invests in sell their products to other businesses, which often means their revenues are contracted and recurring, making them more predictable and less vulnerable even in difficult economic circumstances.
“Looking ahead to next year, with entry valuations having already reset, we should hopefully see a good environment for another strong cohort of investments as well as improving exit opportunities.”
Apollo VCT has an existing portfolio of around 45 companies. Typically, the team considers over 600 investment opportunities a year, and whittles that down to around 10 new investments. Apollo typically invests between £2 million and £10 million into each business. Notable portfolio companies include:
VaultSpeed: a firm whichhelps large and mid-market companies to automate their complex and time-consuming data activities by integrating their datasets into data warehouses. This means businesses are able to analyse, understand and store their data more easily and securely, saving both time and resource.
SOVA: a human resources technology (HRTech) company designed to manage the assessment of candidates for large organisations, helping them improve transparency and diversity. By combining psychometric science and a compelling digital experience, SOVA helps companies more accurately identify top talent and create personalised candidate experiences. SOVA’s platform helps companies rapidly adjust their approach to hiring in a virtual working environment.
Jess Franks, Head of Investment Products, Octopus Investments commented:
“Over the past five years we have seen VCTs become a more mainstream product for advisers, and we don’t expect that trend to change. VCTs remain a great investment for advised clients that are looking for smart tax planning and want access to private market investments, even for those with smaller amounts to invest or who are starting to add this asset class to their portfolio.
“A recent survey we carried out found that 45% of investors are interested in exploring investment opportunities in early-stage companies3, suggesting the opportunity to provide access to growth companies via VCTs would be valued by a large number of clients comfortable with the risks”.
The minimum investment amount for Apollo VCT is £5,000. The new share offer is open until the 1st April 2024 for the 2023/2024 tax year and 15 November 2024 for the 2024/2025 tax year. The offer will close earlier if it becomes fully subscribed.
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Notes to Editor
- By Funds under management, the Association of Investment Companies, April 2023. 2 Octopus Investments, 30 June 2023.
- 2022 Annual Interactive Global League Tables, PitchBook, 4 March 2023.
- Opinium Research, survey of 1020 UK Adults with investments partly/fully managed by an adviser and 206 UK IFAs, April 2023
Performance
Past performance is not a reliable indicator of future results and may not be repeated.
| 2019 | 2020 | 2021 | 2022 | 2023 | |
| Annual total return | 2.7% | 3.0% | 18.4% | 12.2% | 8.2% |
| Annual dividend yield | 6.3% | 3.2% | 7.8% | 11.2% | 5.0% |
| Total value (p) | 118.8 | 120.2 | 128.7 | 134.9 | 139.1 |
The performance information above shows the total return of Octopus Apollo VCT for the last five years to 31 July 2023.
The total return is calculated as movement in total value in the period, divided by the NAV per share at the beginning of the period.
The annual total return for Octopus Apollo VCT is calculated from the movement in net asset value (NAV) over the period to period end, with any dividends paid over the period then added back. The revised figure is divided by the NAV at the start of the period to get the annual total return. Performance shown is net of all ongoing fees and costs.
The annual dividend yield is calculated by dividing the dividends paid during the period by the NAV at the start of the period. Please note, the NAV per share may be higher than the share price, which is the price you may get for the shares on the secondary market.
Total value shows the sum of the NAV per share in pence for the last five years to 31 July and cumulative dividends per share in pence since inception (2006) for the last five years to 31 July.
Please note data is unaudited and may be subject to change.
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. 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 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: November 2023