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Octopus picks up on bioscience

Octopus Asset Management



Bioscience VCT

Aim: Growth by investing in listed and unlisted bioscience

companies.

Minimum investment: Lump sum £3,000.

Opening-closing date: October 15, 2001-April 5, 2002 for 2001/2002

tax year, April 12, 2002 for 2002/2003 tax year.

Charges: Initial 5 per cent, annual 1.25 per cent.

Commission: Initial 2.25 per cent, renewal 0.25-0.4 per cent for first

four years.

Tel: 0800 2792501.

Broker Panel:-

Simon Burke – Managing director, Arctic Life &

Pensions

Nick Upton – Consultant, Ian Cooke & Partners

Martin Dilke-Wing – Director, Morgans Independent Advisers

Broker Ratings:-

Investment philosophy: 7.3

Past performance: 5.7

Company&#39s reputation: 5.7

Charges: 4.7

Commission: 5.0

Product literature: 8.3

Octopus Asset Management has introduced the bioscience venture

capital trust, which invests in both listed and unlisted bioscience

companies.

Looking at how the trust fits into the market Burke says: "Within

the venture capital trust market, this will no doubt be regarded as a

very specialised and, therefore, potentially more risky trust. However,

there is no doubt that bioscience related investments have not

suffered the same backlash as technology funds in general. I

therefore think the fund will be well received in some

quarters."

Upton agrees the trust will be seen at the upper end of the risk scale,

but adds that it presents an exciting opportunity.

Dilke-Wing says: "The venture capital trust market tends to be

split between various sectors, technology, generalist, hybrid, quoted,

unquoted, Aim etc. This is the only trust of which I am aware that

specialises in bioscience specifically and, as such, provides a useful

alternative to existing issues."

Moving on to the type of client that the trust will be suitable for Upton

says: "Mostly, I would say experienced investors with

reasonably large established and diverse portfolios. The ability to

defer capital gains tax liabilities using a venture capital trust is a

useful tax planning tool for the wealthy."

Dilke-Wing feels it would be suitable for clients with a capital gain

where they wish to defer paying tax, and/or have an aggressive risk

profile.

Burke adds: "Any client who is happy to accept the real or

perceived investment risks associated with this type of project,

especially those who can take maximum advantage of the tax

concessions available to venture capital trusts. Investors who need to

make use of the tax concessions may also prefer venture capital

trusts to enterprise investment schemes due to the greater

diversification of the underlying investment."

Turning to the marketing opportunities that could be provided by the

product Dilke-Wing says: "Difficult to say at present.

Traditionally, venture capital trusts are end of tax year planning

vehicles. I am not sure what the public demand for venture capital

trusts will be this year."

Burke cannot see that the trust will provide any marketing

opportunities. Upton says: "Bioscience is a very fashionable

investment area for specialist funds, so offering those within a

venture capital trust is another approach."

Casting an eye over the main useful features and strong points of the

product Upton says: "Generically there are the obvious tax

benefits, but looking specifically at this individual product, I was

extremely impressed by the vast wealth of knowledge and expertise

brought to this venture by the various personnel involved on all sides

of the project."

Dilke-Wing picks up on the fact that the trust occupies a niche in the

venture capital trust market, as well as commenting on the

credentials of the investment committee and managers.

Burke says: "As mentioned earlier, the fact that bio-related

companies have not suffered as badly as conventional IT related

business is helpful. With an ageing population, potential for new

businesses in health related research must be on the

increase."

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