Octopus Investments has launched a new venture capital fund to allow three of its existing Octopus Titan funds to retain VCT qualifying status.
The Octopus Titan VCTs 1-3 will sell their holdings in four underlying portfolio companies – Zoopla Property Group, Graze, Calastone and Secret Escapes – to a new fund that will be financed by institutional investors and managed by Octopus.
The three funds will retain 50 per cent of their original investment in these companies by owning a stake in the new fund, which is backed by institutional investors. Exposure to the companies has been maintained to allow investors to benefit from the anticipated future increase in their value.
In addition, the cash realised will be used by the Titan VCTs 1-3 to fund new and follow-on investments, as well as funding future distributions to shareholders in the form of tax-free dividends and financing share buy-backs.
According to Octopus, 97 per cent of votes cast by shareholders were in favour of the proposal.
Octopus Titan VCTs fund manager and ventures team head Alex Macpherson says: “We are really pleased that our VCT investors have given us their full support and proactively voted in favour of our proposal.
“We wanted to find a solution that allowed us to continue to actively manage the portfolio, ensuring each VCT remained qualifying and that shareholders’ tax reliefs were maintained, while enabling our investors to benefit from the continued success of these four companies.”