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Octopus Investments has passed £1bn milestone in VCT assets under management


  • By Neil Martin

Octopus Investments, part of Octopus Group and the largest provider of venture capital trusts in the UK, has passed the £1bn milestone in VCT assets under management.

The firm told GBI Magazine that it is the first and only investment manager to reach this milestone, which comes after recent fundraising. The assets are spread across Octopus’ four VCTs, which are currently supporting more than 200 portfolio companies.

According to the latest figures from Association of Investment Companies, Octopus manages almost 25% of all VCT funds, which amount to £4.25 billion2.

VCT
Assets under management
Octopus Titan VCT
£693 million
Octopus AIM VCT
£121 million
Octopus AIM VCT 2
£85 million
Octopus Apollo VCT
£126 million
Total
£1,025 million AIC statistics

Paul Latham, Head of Tax Products, at Octopus Investments, said: “VCTs have proven to be a fantastic government initiative since being introduced in 1995, providing generations of UK entrepreneurs with the vital investment they need to grow and scale their businesses.

“This success has been made possible by the many thousands of individual investors, for whom VCTs are seen as a valuable and impactful financial planning solution. VCTs are gaining in popularity as more advisers and investors recognise the growth potential of UK smaller companies and the tax benefits VCTs offer.”

Octopus also revealed  that its £80m over allotment facility for Octopus Titan VCT will be opened, as the UK’s largest VCT hits its initial £120m fundraising target. This takes the VCT’s total fundraising target to £200m and, if fully subscribed, would take its total AUM up to c. £800 million. Octopus Titan VCT was the first VCT to raise a record breaking £200m in 2018.

Jo Oliver, Fund Manager for Octopus Titan VCT, commented: “VCTs have played a fundamental role in transforming the UK’s entrepreneurial ecosystem and helped to cement its reputation as the best place in Europe to build world class technology companies. With one of the largest investment teams in the region we meet hundreds of hugely talented entrepreneurs each year, many of whom are capable of completely transforming their industries. This is incredibly exciting for our investors as we work to deliver returns to them and support the next generation of leading global businesses.”

Commenting more broadly on VCT fundraising activity this tax year, Nick Britton, Head of Intermediary Communications at The AIC, said: “VCTs have raised £264m5 in this tax year so far which indicates a healthy fundraising environment and continuing strong demand for VCTs. Although this figure is down compared to the same period last year (£483m), 2017/18 was an exceptional year in which uncertainty over the outcome of the Patient Capital Review led to a boost in demand earlier in the tax year than usual. Otherwise, this year’s figure is consistent with previous years, for example 2016/17 (£221m). Demand for VCTs has been driven by increasingly restrictive pension rules, as well as advisers’ increasing comfort in the track record of the sector, which is now in its 24th year.”

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