Octopus Investments, part of Octopus Group and the largest provider of venture capital trusts (VCTs) in the UK, has opened fundraising for Octopus Titan VCT (Titan).
Octopus is targeting another GBP120 million fundraise for its flagship VCT, following last year’s record-breaking fundraise when Titan raised a total of GBP200 million. If fully subscribed, the total fund size could rise to over GBP800 million AUM, providing significant capital for investment in early stage businesses across the UK.
Titan offers investors, comfortable with the risks of smaller company investing, attractive tax incentives that accompany a VCT and access to a well-established and diverse portfolio of more than 65 potential game-changing smaller companies.
The investment team specialises in some of the most exciting tech-driven businesses in the UK, with the potential to scale internationally. One such example is the AI-powered language learning app, Memrise, which has grown rapidly to more than 35 million users, while another is Sofar Sounds, which hosts intimate music events in more than 415 cities across the globe every month.
Titan was also an early investor in Zoopla Property Group, the first VCT backed business to reach a GBP1 billion valuation, alongside other well-known names such as the snack company Graze and predictive keyboard software, SwiftKey.
Paul Latham, Managing Director at Octopus Investments, says: “VCTs continue to grow in popularity, with demand reaching its highest level in a decade last year. This is being driven partially by changes to pension and buy-to-let legislation, but also by those looking for a tax-efficient way to complement and diversify their portfolio.”
“Titan’s investment team is now one of the largest in Europe and has a vast amount of experience investing in early stage companies that are right in the sweet-spot of VCTs. Combined with its diverse and established portfolio, Titan has proven popular with investors keen to access the enormous growth potential of these businesses. Last year we raised a record GBP200 million well ahead of time and, with fewer VCTs fundraising this year, it could close even earlier this time round.”
VCTs offer investors up to 30 per cent upfront income tax relief providing that shares in the VCT are held for at least five years, as well as tax-free dividends and tax-free growth. Titan has an impressive track record of paying dividends and targets at least 5p per share annually. Since it was first launched in 2007 it has announced total dividends of 71p per share to investors.
Jo Oliver, fund manager of the Octopus Titan VCT, says: “Titan has been investing in innovative early stage companies for more than a decade now, and the pipeline of investment opportunities is as strong as it’s ever been. Whether in healthcare, retail, industry, or financial services, there is absolutely no shortage of talented tech entrepreneurs who have the potential to completely transform their markets. This is testament to the continued evolution of the UK’s entrepreneurial ecosystem, which is now recognised as one of the best places to build world-class technology companies.”
Last year Octopus became the first (and remains the only) VCT provider to offer an ISA wrapper on a VCT. This enables investors to transfer any existing ISA funds (from previous tax years 2017/18 or prior) to a new Titan VCT ISA, while maintaining all the benefits of VCT investing.
The share offer is open until September 2019 but may close earlier if fully subscribed. The minimum investment is GBP3,000 while the maximum investment qualifying for tax relief is GBP200,000.