Octopus Investments has completed the merger of the five Octopus Titan Venture Capital Trusts (VCTs). The merged Octopus Titan VCT will target an annual regular dividend of 4p per share initially.
This will increase to 5p per share during the two years after the merger, and will also pay special dividends where applicable. The latest special dividends of 15p to Titan VCT 4 shareholders and 10p to Titan VCT 5 shareholders were paid on 21 November. In September Octopus announced the launch of a GBP50 million fundraise across the Titan VCTs, which will remain open following the merger.
The merger of the five Titan VCTs will enable Octopus to manage customers’ investments more efficiently in a number of ways. This includes significant administrative cost savings, simplification of communications and administration for investors, and increased management effectiveness, as the fund managers are now able to focus more time on working with portfolio companies to help them achieve growth targets. Importantly, the merger will also provide greater diversification for current investors, giving them access to both the successes and rising stars of the portfolio and therefore spreading the portfolio risk across a broader range of investments and sectors.
Paul Latham, Managing Director at Octopus, says: “The Octopus Titan VCTs were launched before HMRC changed the legislation to remove the limit on how much a VCT can invest into a single company. This meant that at the time it was necessary for us to launch a number of VCTs, which invested alongside each other in order to meet the investor demand for wider exposure to the portfolio of entrepreneurial fast-growing companies that the Titan VCTs invest in such as Zoopla Property Group, Secret Escapes and graze.com. It now makes sense to consolidate the five Titan VCTs in order to achieve the significant administrative and cost efficiencies for shareholders that result from running just one VCT.”
The Octopus Titan VCTs invest in high growth early stage companies that have the potential to become global businesses. The current portfolio of 45 companies includes a diverse range of successful businesses including SwiftKey, the touchscreen keyboard app which was Google Play’s bestselling app in 2012 and 2013, and YPlan, the last minute mobile ticketing application which is now live in five cities in the UK and US.
Alex Macpherson, head of the Ventures team at Octopus and fund manager of the Titan VCTs, says: “This merger will result in significant benefits for investors and, importantly, allow Octopus to focus on working closely with the management teams within the portfolio to help them achieve their growth potential. The current fundraise has already seen strong demand from investors looking to access the benefits that these dynamic businesses can offer, so it’s fantastic that we are also now able to provide existing investors with exposure to the full range of exciting high growth enterprises that the Octopus Titan VCTs have invested in over the years.”