Octopus Investments (Octopus) has launched a GBP20 million joint fundraise for its two Alternative Investment Market (AIM) VCTs, with scope for the offer to be extended by an additional GBP10 million.
The offer comes at the end of a year that celebrates AIM’s twentieth anniversary and has seen AIM responsible for a GBP25 billion contribution to UK GDP and almost three quarters of a million jobs in Britain alone³. The latest offer gives investors the potential to access the growth of UK smaller companies whilst receiving a regular income through the funds’ dividend policies.
Octopus AIM VCT (AIM VCT) and Octopus AIM VCT 2 (AIM VCT 2) both target a minimum 5% tax free dividend yield every year. The AIM VCTs offer investors access to diverse portfolios of around 70 companies, built over a number of years, across a number of different sectors. Successful companies backed by AIM VCT and AIM VCT 2 include Brooks Macdonald Group plc, an established wealth management group with over GBP7 billion of discretionary funds under management and over 450 staff, and Tasty plc, which operates 42 restaurants⁴ under the brands of dim t and Wildwood, with a management team that originally founded ASK restaurants.
Stuart Lewis, business line manager for VCTs at Octopus Investments, says: “This latest fundraise follows swiftly after new share offers were announced for Octopus Titan VCT and Octopus Apollo VCT, and is in response to increased demand from financial advisers and direct investors for VCTs. The Octopus AIM VCTs have a good long term track record of delivering a steady income stream for investors via regular tax-free dividends.
“VCTs can provide real investment value and are increasingly being used as an established planning tool by investors to complement their existing portfolios. We believe that VCTs will become even more relevant to those individuals likely to be affected by the continued restrictions to the pensions lifetime allowance.”
Introduced in 1995, the same year that AIM was set up by the London Stock Exchange, VCTs were brought in by the government to encourage funding for smaller companies, helping drive economic growth and job creation. There are a number of tax incentives on offer for investors, designed to compensate investors for taking on the high risks associated with investing in smaller companies. Demand for VCTs has grown in recent years, with inflows in the last tax year reaching GBP429 million, the fourth-highest total ever⁵. AIM has also seen rapid growth with more than 1,000 companies currently listed, holding a combined market value exceeding GBP73 million⁶.
