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VCT inflows resilient as investors look to tech for growth

by | Dec 4, 2020

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Octopus Investments has announced that it raised a total of £61 million into its venture capital trusts (VCTs) during the month of November, equivalent to more than £2 million each day, in a sign that demand for VCTs remains resilient despite broader economic uncertainty.

This came as it closed fundraising for its Octopus AIM VCTs after they raised £17 million in November and reached the overallotment target of £31 million.

Octopus also experienced strong inflows into the UK’s largest VCT, Octopus Titan, which raised £38 million last month and sees it almost half way to its initial £80 million fundraising target, just 5 weeks after opening.

 
 

Paul Latham, Managing Director of Octopus Investments, said:

“VCTs act as a critical source of patient capital, which is needed now more than ever as smaller companies navigate the shifting environment that the pandemic has brought. Strong inflows into VCTs will be welcome news for the UK’s early stage technology companies, many of which are in a great position to scale but still need funding to realise their full potential.

“This opportunity to back some of the most promising British technology businesses has clearly resonated with investors seeking growth, while also looking for established managers with a proven track record.

 
 

“Another factor which explains why inflows have held up is that VCTs are now more ingrained in the financial planning process. In years gone by, we often saw a big rush towards the end of the tax-year, but increasingly investors and financial advisers have become more familiar with VCT investing and are also doing their tax planning much earlier. However, this increases the risk of the most popular VCTs reaching capacity sooner than you might expect, as we have seen already with our AIM VCTs.”

Many investors have taken advantage of ‘early bird’ discounts available until 15th December which offer reduced fees on the VCTs.

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