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OCTOPUS INVESTMENTS – Launch of new Future Generations Venture Capital Trust

OCTOPUS INVESTMENTS – Launch of new Future Generations Venture Capital Trust

Minimum Investment £3,000; Early bird discount of 2% before 3rd March 2023

The Octopus Future Generations VCT is now open, seeking to raise £30 million of investment. This VCT will be attractive to clients interested in investing thematically in businesses which can bring both positive societal change and financial return.

With the end of the tax year approaching, we feel that this unique product is worth considering for experienced investors who have utilised Pension and ISA allowances and are looking for a tax-efficient solution for investing surplus cash.

The Octopus Future Generations VCT is managed by Octopus Ventures, a leading UK venture capital team established in 2000, which manages a number of early-stage investments including Venture Capital Trust (VCT) and Enterprise Investment Scheme (EIS) funds. They had £12.6 billion of funds under management at the end of June 2022, including its Titan VCT which has supported some of the UK’s most successful technology companies.

The Octopus Future Generations VCT invests in UK businesses with high growth potential across three areas which we believe have the power to transform the world for the better: building a sustainable planet, empowering people and revitalising healthcare. This approach is aligned with the belief that some of the best future returns will come from companies which address the biggest problems faced by society today.

Clients who invest before 5 pm on 3 March 2023 will benefit from an early bird discount of 2% on the initial fee.

Initially launched in January 2022, the VCT saw considerable demand due to its unique mandate, raising £40 million in its maiden fundraise.*

The VCT has already invested in 18 businesses aiming to tackle some of society’s most compelling challenges. We believe these types of businesses have the opportunity to deliver excellent returns for the following reasons:

  • Tackling society’s biggest problems means there are huge markets to address.
  • The demand for solutions to the planet’s challenges is urgent and growing.
  • People increasingly want to work for businesses that make a positive difference in the world, therefore these companies are attracting the best talent.

Examples include:

  • Oto, a mobile app created by a team of doctors to help people manage their tinnitus. Tinnitus affects many people globally, such that around 15% of adults in Europe are affected by it.**
  • Neat, an insurance provider that focuses on having the products it covers repaired or reconditioned, rather than being automatically thrown away. It’s been shown that if consumers don’t change their habits, global electronic waste is expected to reach 120 million tonnes per year by 2050.***

This investment is available for the 2022/23 tax year and the minimum investment is £3,000. Over the longer term, the VCT aims to pay an annual dividend of 5% of NAV per share, although dividends are variable and cannot be guaranteed.

Understanding the risks

VCTs are high risk investments which invest in small, unlisted or AIM-listed companies. There may be no market for the shares should you wish to dispose of them, and you may lose your capital.

Consequently, providers encourage investors to take advice from a regulated professional adviser to ensure suitability of their investment. At Best Price Financial Services Ltd, we offer VCT investments on an advised basis, so this is where we can help.

Within our assessment, we will look at your personal tax circumstances, previous investment experience, attitude to risk and capacity for loss to ensure that the product is suitable for your needs. We are fully regulated and authorised by the FCA to provide advice on tax planning products, which means that in the event that the product was not suitable to meet an individual’s needs, the investor has recourse to the Financial Ombudsman Service (FOS) to independently assess the merits of the advice provided. We are required to seek to deliver the best outcomes for our clients and are obliged to carry professional indemnity insurance in this regard. If you were to purchase a VCT from a regulated distributor on a non-advised basis, you would not receive the same level of service or the reassurance of FOS protection.

To help compensate for the higher level of risk involved, the government offers generous tax benefits on VCT investments:

  • High annual allowance – invest up to £200,000 per tax year.
  • Up to 30% tax relief – Save up to £60,000 on income tax when you invest in newly issued VCT shares, provided they are held for at least five years. Please note that the amount of income tax reclaimed cannot exceed the amount of income tax due.
  • Tax-free dividends – No Income Tax is payable on dividends from ordinary shares in VCTs.
  • Tax-free growth – No CGT on gains from disposals of ordinary shares in VCTs.

Please note that the tax treatment for VCTs depends on the individual circumstances of each client and tax rules may be subject to change in future.

Lowest advice fees

We are confident that our fees for providing advice on VCT investments are the lowest that you will find anywhere in the UK.

For the Octopus Future Generations VCT, their initial fee is 3%, with an early bird discount of 2% for anyone who applies before 5pm on the 3rd of March. Please see the brochure and accompanying documents for full details of this product and related and ongoing fees. Links are provided below.

Click here to read the Brochure
Click here to read the Prospectus
Click here to read the KID

We believe this is an excellent opportunity to make a compelling addition to a modern, balanced, risk-managed portfolio and invite you to get in touch with us to discuss.

Click here if you wish to get in contact

Warmest Regards.

Best Price FS Team

*Octopus Investments, as at 13 January 2023.
**Tinnitus prevalence in Europe: a multi-country cross-sectional population study, paper, The Lancet, 03 November 2021.
***2022 Global E-waste already weighs more than four Burj Khalifa, article, Unlock net zero, 03 March 2022.

Advice: Simply click here to get in touch if you wish to receive regulated advice in relation to the ‘suitability’ of the plans to meet your investment needs.