Currently closed for new investment, the UK’s largest VCT took in £120m before the end of the 2016/17 tax year taking its total assets to circa £444m.
While the group could not comment on when the new fund raising will begin, Alex Davies, CEO and founder of Wealth Club, said it reflects the fact that VCTs are becoming an increasingly mainstream investment option.
In the 2016/17 tax year, VCTs saw the strongest demand in a decade raising £542m.
“This latest fundraise gives investors the opportunity to support some of the UK’s fastest growing companies, and in doing so they benefit from a number of attractive tax incentives if the shares are held for at least five years, including 30% upfront tax relief, tax-free dividends and tax-free growth,” said Davies.
Investing primarily in early stage tech and high growth companies, the lead manager of the fund is Alex MacPherson, who also chairs the Octopus Ventures Investment Committee.
Davies added: “Whether you are seasoned VCT investor or someone planning your first foray into the VCT space, then investing with a well-known name like Octopus, with a strong track record of delivering returns for investors is a compelling option. Not only is Octopus Titan the UK’s largest VCT but it also boasts numerous success stories including Zoopla, the first £bn company to come out of a VCT, and Secret Escapes.
“With cuts to the pension allowances, restrictions on buy to let investing and more onerous taxation we expect demand to be greater than ever.”
Darius McDermott, managing director of Chelsea Financial Services, said while a fund raise of this magnitude should help Octopus keep costs down on the VCT, he did express concern over its growing size.
“The size is definitely a consideration because they probably are running too much money and we wouldn’t expect many more – if any more – fund raisings after this,” he said. “So if you like Octopus and want to invest, now is the time.
“If you are concerned about the size then there are a number of smaller VCTs open at the moment with good track records so you could look elsewhere.”
The news of the latest fundraising follows the announcement last week from Octopus that it is raising £30m for two new AIM VCTs in reaction to “exceptional demand” for the vehicles.
Both Octopus VCTs will be open until 4 April 2018 for the 2017/18 tax year and until 15 June 2018 for the following tax year, the firm announced last Wednesday.
