The portfolio service will purchase secondary market shares from a 10 to 15-strong portfolio of mature generalist and AIM VCTs offered by a number of providers, including Octopus.
The service will offer investors tax-free dividend income, while the 10 per cent plus return will also include an annual tax-free income of at least 6 per cent after charges.
Octopus director and co-founder Chris Hulatt will oversee the investment selection, with VCTs chosen on performance track record and the ability to produce dividends. Octopus says there will be a focus on the acquisition of shares which the group see as representing a meaningful discount to Net Asset Value.
Octopus intends to raise up to £10m for the initial launch phase of the portfolio service between now and the end of the 2008/2009 tax year.
Minimum investment is set at £30,000.
Hulatt says: “Many VCTs are now reaching maturity and are demonstrating that they have the ability to deliver a consistent
dividend stream in excess of 7 per cent per annum. To date, few investors have benefited from the extensive opportunities available in the VCT secondary market given the extensive information, skills and time required to analyse their underlying investment portfolios.
“The Octopus VCT Portfolio Service will enable retail investors to benefit from tax-free dividend income and the potential for capital growth while minimising the level of risk through diversification across a broad range of VCTs. As the UK’s leading VCT provider, we believe that Octopus is perfectly placed to deliver this service and we look forward to generating attractive returns for our investors.”