View more on these topics

Octopus raises another eclipse

Octopus Asset Management is looking to raise up to 30m for its eclipse 2 venture capital trust.

Unlike some generalist VCTs, this will not invest in start up or seed stage companies as the directors feel the risks are too high and the expected time to exit is too long. Instead, they believe the ideal time to invest is when companies have proven their business models and are looking for capital to expand.

The directors believe there will be plenty of investment opportunities as a lack of money available to smaller companies in the last four years has delayed plans for expansion and caused valuation levels of these businesses to fall. The governments response to this in the form of temporary enhancements to income tax relief on VCTs is also expected to create a demand for VCTs among investors.

Eclipse 2 will invest around 80 per cent in companies the investment team believes have good growth prospects and have demonstrated a sustainable competitive advantage over rival firms in the same sector. Around 20 per cent will remain in cash.

The portfolio will contain between 20 and 30 qualifying holdings which will range in size between 200,000 and 1m, depending on a companys stage of development and anticipated need for future funding. No more than 20 per cent will go into any one sector and up to 10 per cent may be invested in a single company.

When selecting companies the investment team will spend time with the management teams, customers and suppliers. They will also ask other professionals in the industry to provide independent comment and assessment.

In the run up to the end of the tax year, many VCTs are likely to be clamouring for new money on the back of the income tax enhancements so the environment is likely to be competitive. As this VCT does not invest in start-ups or those at the seed stage, it may appeal to investors who are looking for a VCT at the lower risk end of the spectrum.

Recommended

Tories pledge to match savings

The Conservatives have unveiled plans for a lifetime savings account, extending taxfree limits for Isas and giving employees access to financial advice.

Jupiter recruits to develop fund teams

Jupiter Unit Trust Managers has take on a new fund manager and a business develoment director.
The asset manager has taken on fomer Cazenove fund manager Simon Somerville to lead its assault on Asian markets.
Meanwhile, former chief executive of Invesco Europe Tristan Hillgarth has been appointed to the newly created position of group business development director.
Jupiter celebrated its 20th birthday this week.

Multi-Manager view

2005 will mark the 17th anniversary of the Financial Services Act. Seventeen years ago, the concept of multiple managers being available within a single product was barely heard of.

Bonds in 2017: Stick or twist?

Royal London Asset Management Bond Fund Managers Paola Binns and Craig Inches look at why short duration could be a key tactic for fixed income investors during 2017. Read the full article here The value of investments and the income from them is not guaranteed and may go down as well as up and investors […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com