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Octopus launches new fundraise for Titan VCT

Octopus Investments (Octopus) has launched a GBP50 million fundraise for the Octopus Titan Venture Capital Trust (Titan VCT).

With over GBP215 million in assets under management, Titan VCT is the largest VCT on the market and has a strong track record of delivering returns for investors. Since it was first launched in 2007 it has focused on investing into high growth early stage companies, backing talented management teams that have the potential to develop the successful businesses of tomorrow.
 
Today the VCT offers investors the opportunity to invest in a well-established and diverse portfolio of around 50 smaller companies. These range from very young businesses such as online furniture business Swoon Editions to well-known household names including Secret Escapes, the members only holiday company.
 
Alex Macpherson (pictured), head of the Ventures team at Octopus and fund manager of the Titan VCT, says: “Titan VCT offers investors the opportunity to access a really exciting and unique portfolio of early stage companies that has been built up over the last eight years.  Every year, we handpick a small selection of new investments from a pipeline of hundreds, and then work with the management teams to help those businesses realise their full potential. This latest fundraise gives investors the opportunity to support both established and developing portfolio companies as well as new businesses. The entrepreneurial scene in the UK is thriving, and as the largest VCT in the UK, we are lucky enough to attract some of the best investment opportunities within this sector and work with some of the most talented entrepreneurs.”
 
VCTs were introduced by the government in 1995 to encourage much-needed investment into smaller companies, driving job creation and economic growth in the process. Since then, they have proved to be a vital source of funding, and have played a critical role in helping to support the next generation of UK businesses. VCTs offer a number of attractive incentives for those investors comfortable with the associated risks of smaller company investments, including up to 30% upfront income tax relief, tax-free dividends and tax-free growth, providing that shares in the VCT are held for at least five years. Titan VCT has an impressive  track record of paying dividends, returning 52p per share in total to investors since it was first launched[2], and is one of the top performing VCTs as listed on Trustnet[3].
 
Demand for VCTs has grown in recent years, with inflows in the last tax year reaching GBP429 million, the fourth highest total ever[4]. VCTs are now seen by many to be a powerful planning tool, and have proved popular with those considering investment products that are capable of generating additional income, or looking at ways to complement existing retirement plans. In the 2014/2015 tax year, according to the Association of Investment Companies (AIC), VCTs paid GBP240 million in dividends to investors, the highest dividend pay-out since VCTs began3, while Octopus itself experienced record VCT inflows during this period3.
 
Paul Latham, Managing Director at Octopus Investments, said: “There is a growing demand from financial advisers and their investors for VCTs thanks to the range of different planning requirements they can help to address. We expect this to increase on the back of ongoing changes to pensions, including the Finance Bill’s legislation regarding the tapering of relief on pensions contributions for high earners.
 
“Much has been made of the recent announcements regarding VCTs in the Finance Bill and the resulting impact on the industry. However we believe demand for VCTs will continue to grow as more people look to benefit from the growth potential that these young, dynamic businesses can offer and the role VCTs can play as part of a diversified portfolio of investments.”
 
The share offer is open until 1 September 2016, but may close earlier if the fundraising target of GBP50 million is met. The minimum investment is GBP5,000. The maximum investment still qualifying for income tax relief is GBP200,000.

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