Octopus Investments, part of Octopus Group and the largest provider of Venture Capital Trusts (VCTs) in the UK1, today announces it has opened a new £20 million fundraise for its two Alternative Investment Market (AIM) VCTs.
The VCTs offer an easy way to access emerging AIM listed growth companies, through a diversified portfolio with investments across a range of sectors, from building materials, pharmaceuticals to software development. Alongside growth, the VCTs also aim to provide investors with income through their established dividend policies.
Octopus AIM VCTs feature a comprehensive range of AIM-listed businesses at different stages of maturity. This allows investors to instantly benefit from owning established portfolios of around 90 AIM-listed companies, many of which have strong growth potential, and the team continues to add new investments to the portfolio each year.
One such company is Diaceutics, which provides the world’s leading pharmaceutical companies with an end-to-end solution for the launch of precision medicine diagnostics. The company generates insights from its aggregated testing data from its worldwide laboratory network. This provides real world evidence that informs the decision making of pharmaceutical companies across hundreds of precision medicine projects.
Another growth company backed by Octopus AIM VCTs is Learning Technologies Group (LTG), a group of businesses who provide innovative learning technology solutions. Through its portfolio of brands, LTG offers large organisations a new approach to digital learning and talent management. The company benefited from a series of material acquisitions and now has several locations across the UK, Europe, the United States, Asia-Pacific and South America.
The Octopus AIM VCTs are managed by the Octopus Quoted Companies team, which includes some of the most experienced AIM-focused fund managers in the market, with over 150 years of collective investment experience and an average tenure of 11 years2.
Kate Tidbury, Senior Fund Manager at Octopus Investments, commented:
“Recent headwinds of high inflation and rising interest rates have resulted in the valuations of many smaller companies falling to levels not seen since the 2008 financial crisis. However, most of the underlying businesses in our two portfolios have been more robust in the year to date, leaving shares looking cheap relative to their long-term averages.
“Moreover, for active managers like us, we are less concerned about these short-term changes in sentiment, given the good value opportunities we can provide for our longer-term investors in inefficient areas of the market. It’s against this backdrop that we can look forward to making new investments at attractive valuations.”
Jess Franks, Head of Investment Products, Octopus Investments said:
“Increasingly, we are seeing financial advisers recommending VCTs to a broader range of their client bank, due to factors such as portfolio diversification and the attractive returns that can be targeted by investing in smaller companies with some risk mitigation provided by tax relief.
“The Octopus AIM VCTs offer the opportunity to invest in an established portfolio of smaller listed companies, which may be a good choice for investors who are new to VCTs or want to add something different alongside VCTs invested in predominantly unquoted companies.”
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%3 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.
The new share offer for AIM VCT and AIM VCT 2 is open until 14 September 2024 for the 2023/2024 tax year. The offer will close earlier if it becomes fully subscribed.
New investors have the option of buying shares in one or both of the Octopus AIM VCTs. They can split their investment 60/40 between Octopus AIM VCT and Octopus AIM VCT 2, or place 100% of their investment into either VCT.
-Ends-
- The Association of Investment Companies, Interactive Statistics – as at April 2023
- Octopus Investments, August 2023
- 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 editor
Performance
Discrete 12-month performance data over the last five years to 31 July
| 2019 | 2020 | 2021 | 2022 | 2023 | |
| Octopus AIM VCT NAV total return1 | -12.2% | 3.6% | 38.6% | -22.3% | -17.0% |
| Octopus AIM VCT 2 NAV total return1 | -10.8% | 3.6% | 42.1% | -23.8% | -17.2% |
| FTSE AIM All-Share total return2 | -13.6% | -3.9% | 42.6% | -25.5% | -15.6% |
| FTSE All-Share total return2 | 1.3% | -17.8% | 26.6% | 5.5% | 6.1% |
| Octopus AIM VCT dividend yield3 | 4.5% | 8.9%4 | 5.8% | 6.7%4 | 6.1% |
| Octopus AIM VCT 2 dividend yield3 | 4.6% | 10.5%4 | 5.8% | 6.0%4 | 6.4%5 |
Past performance is not a reliable indicator of future results. Dividends are not guaranteed.
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.
3 Annual dividend yield, for the purposes of the above table, is calculated by dividing all the dividends for the 12 months to 31 July by the NAV per Share on 31 July of the prior year. For this calculation the record date for each dividend is used, which is the cut-off date by which Shareholders must be on the shareholder register to receive the dividend. Note that depending when a record date falls, some annual dividend calculations include three regular dividends for the year and others include only one.
4Includes special dividend paid following a number of partial and total sales of holdings from the portfolio.
5Octopus AIM VCT 2 has proposed an interim dividend of 1.8p to be paid to shareholders on 9 November 2023 to those on the share register by 13 October 2023. Please note for the upcoming fundraise we do not expect to complete an allotment before 13 October 2023.
Octopus Investments, Lipper, 31 July 2023.
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 2023.