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Octopus opens share offer for AIM VCTs as retirement planning options

15 August 2018

Octopus Investments has launched a £20 million joint fundraise for its two Alternative Investment Market venture capital trusts, as clients seek tax-efficient means to save for retirement outside of lifetime allowance limit.

The VCTs will offer investors access to a wide range of AIM-listed companies across a diverse range of sectors, from building materials and pharmaceuticals to software development and restaurants, the company said.

The VCTs have existing portfolios of around 75 companies which seek to offer investors long-term growth as well as income through dividends.

Richard Power, head of smaller companies at Octopus Investments said AIM is now seen as the go-to market for ambitious growth companies.

He said: “UK smaller companies continue to be a key driver of UK economic growth and offer a compelling investment opportunity for investors over the long term. We are seeing a strong pipeline of investment opportunities, both from newly floating and already listed AIM companies – and remain excited about the growth potential of these business.”

The Octopus AIM VCT and Octopus AIM VCT 2 have a target tax-free dividend yield of 5% a year. The share offer for both VCTs is open until 5 April 2019 for the 2018/19 tax year and 2 August 2019 for the 2019/20 tax year.

Investors, who must make a minimum investment of £5,000, can choose to split their investment 60/40 between AIM VCT and AIM VCT 2 or place 100% of their investment into either VCT.

Paul Latham, managing director, Octopus Investments, commented: “There is consistently high demand from advisers and investors for VCTs. By providing access to the growth potential of smaller companies in a highly tax efficient manner, AIM VCTs offer a unique investment proposition and are increasingly being used to complement retirement plans.”

Latham added that demand was bring driven largely by the reduction in the pensions lifetime allowance and changes made to the buy-to-let scheme, which have forced investors to think about other tax-efficient investments.

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