Octopus Investments, part of Octopus Group and the largest provider of Venture Capital Trusts (VCTs) in the UK, today announced that 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.
