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.
Octopus AIM VCT was launched in 1997 and Octopus AIM VCT 2 in 2005. Both VCTs have been making investments alongside each other, in proportion to the size of each VCT, since 2010. Each benefits from holding a broad spectrum of VCT-qualifying UK companies. Maintaining a portfolio of companies operating in diverse industries is fundamental to the team’s approach to managing risk.
Although new investments remain small enough to qualify for VCT funding, the established nature of the Octopus AIM VCTs means they feature a broad range of AIM-listed businesses at various stages of maturity. This means investors can instantly benefit from owning established portfolios of around 80 companies, many of which have strong growth potential.
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 a great track record of uncovering value in smaller companies. Many of these companies are providing solutions to modern day problems in areas such as technology, healthcare and the environment.
The team makes investment decisions based on their considerable knowledge of the market and analysis of the companies themselves, including the company management track record, financial position, growth potential and long-term prospects.
One of those companies is Sosandar, a fast growing UK based retailer focused on the underserved segment of the women’s fashion market for ages 35-64. Despite the challenging environment, the company continues to demonstrate the value of the brand they have built. They are due to open its first three stores this year, which should be a catalyst for profitable growth.
Another company is Craneware, which provides software and support services for the healthcare industry. It has an industry-leading team of experts who examine operational, financial, and clinical data to provide valuable insights, in particular, to the US healthcare sector. It benefits from a highly cash-generative business model, and it expected to deliver double-digit growth in annualised recurring revenue this year.
Freda Isingoma, Lead Fund Manager of the Octopus AIM VCTs at Octopus Investments, commented:
“There’s no questioning that the last few years have been challenging for UK quoted companies, particularly on smaller growth companies, where high inflation and rising interest rates have negatively impacted valuations.
“However, with UK smaller companies trading at a discount and showing strong underlying performance, improving market conditions and a resilient UK economy, we believe the current outlook for investors looks promising.”
Jess Franks, Head of Investment Products, Octopus Investments said:
“As well as being a good place for smaller companies to gain access to funding to help them grow, AIM remains one of the best places for growing businesses to take their first steps to becoming public companies. Over the years, AIM companies have made significant contribution to the UK
Economy, whether that be through job creation or regional growth.
“For those comfortable with the risks of investing in smaller companies, getting exposure to them via a VCT can prove attractive. The tax benefits associated with a VCT can help to mitigate some of that risk and investors can look forward to the long-term potential growth that comes with smaller 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%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.
The new share offer for AIM VCT and AIM VCT 2 is open until 23 September 2025 for the 2024/2025 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 2024
- 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
| Year to 31 Jul | 2020 | 2021 | 2022 | 2023 | 2024 |
| Octopus AIM VCT NAV Total Return1 | 3.57% | 41.72% | -24.70% | -17.58% | -2.17% |
| Octopus AIM VCT 2 NAV Total Return1 | 3.63% | 42.14% | -23.78% | -17.15% | -1.14% |
| FTSE AIM All-Share Total Return2 | -3.90 | 42.60 | -25.47 | -15.56 | 4.90 |
| FTSE All-Share Total Return2 | -17.76 | 26.64 | 5.51 | 6.09 | 13.54 |
| Octopus AIM VCT Dividend Yield3 | 8.93% | 8.91% | 4.34% | 5.56% | 14.33% |
| Octopus AIM VCT 2 Dividend Yield3 | 10.49% | 5.84% | 6.02% | 6.40% | 13.69% |
Past performance is not a reliable indicator of future results. Dividends are not guaranteed.
1 NAV 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.
2 FTSE 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: The annual dividend yield, 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.
4 Includes special dividend paid following a number of partial and total sales of holdings from the portfolio.
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 2024.