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.
