Octopus Investments (Octopus), a fast-growing UK fund management company and the largest provider of venture capital trusts (VCTs) in the UK¹, announces the launch of a £30 million joint fundraise for its two Alternative Investment Market (AIM) VCTs, with scope for the offer to be extended by an additional £10 million.
The latest fund raising offers investors the opportunity to invest into both Octopus AIM VCT (AIM VCT) and Octopus AIM VCT 2 (AIM VCT 2), each of which look to provide investors with income through their established dividend policies. AIM VCT and AIM VCT 2 both target a 5% tax free dividend yield every year. The AIM VCTs offer investors access to diverse portfolios of around 75 companies, built over a number of years, across a number of different sectors. A good example of a successful company backed by AIM VCT and AIM VCT 2 is Breedon Group plc, which operates around 60 quarries across the UK, with a management team with long experience in the industry and a track record of success.
Richard Power, Head of Smaller Companies at Octopus Investments, said:
“Well-known brands and many other interesting growing companies continue to be attracted to AIM. We expect there to be a good pipeline of investment opportunities for our AIM VCTs coming from both newly floating and already listed AIM companies. We will continue to adhere to our strict investment criteria and do not expect problems investing this new capital.”
Stuart Lewis, Head of Tax Efficient Investments at Octopus Investments, added:
“This latest fundraise is in response to increased demand from financial advisers and investors for VCTs. By providing access to the growth potential of smaller companies in a highly tax efficient manner, AIM VCTs offer a uniquely differentiated investment proposition and are increasingly being used as a way to complement existing retirement plans. Our AIM VCTs offer instant access to established portfolios of around 75 AIM-listed, smaller companies with strong growth potential.
“In the last tax year, to April 2017, demand for VCTs was exceptionally high. The reduction in the pensions lifetime allowance to £1 million, down from £1.8 million in 2011, is now impacting a wide range of individuals and not just the super-affluent. Additionally, changes made to the tax regime for buy-to-let such as the increase in stamp duty, and restrictions on mortgage interest relief, have forced investors to think about complementary tax-efficient investments as they plan for their retirement.”
The new share offer for AIM VCT and AIM VCT 2 is open until 4 April 2018 for the 2017/2018 tax year and 15 June 2018 for the 2018/2019 tax year, or earlier if the Offer is 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.
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. 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.
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.
For journalists in their professional capacity only. The value of an investment, and any income from it, can fall or rise. Investors may not get back the full amount they invest. Past performance is not a reliable indicator of future results. 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. 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, which can be obtained from octopusinvestments.com. 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. 3942880.