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First VCT launched by Octopus Investments in 10 years targets sustainability


Octopus Investments is launching its first VCT in ten years in a bid to raise £20m to support scaling up businesses in need of investment. The VCT, named Future Generations, is the first sustainability focused VCT launched under the current rules.

Funds raised will go into scaling up early-stage businesses that support building a more sustainable planet, empowering people or revitalising healthcare.

Alex Davies, CEO and founder of Wealth Club explained: “This is the first VCT launch from Octopus in over ten years and the first under the new rules to have a focus on sustainability. Sustainability is an increasingly important consideration that is shaping consumer and business spending habits across the globe. Early-stage companies that can provide innovative solutions to address these issues could have the potential for attractive returns.”

“Investors no longer have to sacrifice returns in order to invest with their hearts,” Davies added. “Octopus already has a loyal following after early investments in brands such as Graze, Depop, Zoopla and Secret Escapes, but with research showing 80% of investors believe ESG to be an important factor in their investment decisions, we are expecting the launch to be popular.”

This is the 27th VCT to open in the 2021-22 tax year. VCTs are on track to raise record sums after attracting £710 million in support of businesses scaling up with two months of the tax year still to run.

What is a venture capital trust (VCT)

Investors can claim up front tax relief of up to 30% of their investment on the first £200,000 invested each year. Dividends and capital gains are also tax free. Investors need to hold shares for a minimum of five years. VCTs invest in smaller companies that are often not listed on the main market of the London Stock Exchange. As such investments in smaller companies can fall or rise in value much more sharply than shares in larger, more established companies.

Octopus Future Generations VCT offers investors the opportunity to access a portfolio of early-stage companies aligned to three core investment themes each designed to disrupt industries and drive positive outcomes for the planet and society.

What are the new VCT’s strategic investment goals?

Building a more sustainable planet: tackling the climate emergency by investing in and supporting companies at the forefront of reducing carbon emissions, protecting ecosystems, or creating a circular economy that removes waste.

Empowering people: investing in businesses using technology to further society, such as those improving access to digital learning, making financial advice widely available, or providing cybersecurity and privacy solutions.

Revitalising healthcare: improving the health and wellbeing of people around the world by investing in modern healthcare industries, such as those helping people conquer addictions, or creating software that will make healthcare services more efficient.

The new VCT will be managed by Simon King, a Partner in Octopus Ventures, one of Europe’s largest venture capital teams and the investment team behind Octopus Titan VCT, the largest VCT in the UK with £1.3 billion under management.

Octopus manages over £11 billion across its funds which includes the Octopus Titan VCT, Octopus Apollo VCT, and a number of follow-on funds used to support investee companies once they outgrow the VCT. Two thirds of Octopus Group’s assets under management are focused on building a sustainable planet, empowering people, and revitalising healthcare, the three pillars of the VCTs investment strategy.

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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