Review: Octopus Titan VCT
With more than £615 million of net assets, Octopus Titan VCT really is the giant of the VCT world. Since its launch in 2007 it has built an unmatched track record for spotting rising stars and achieving high-profile exits. Zoopla Property Group, Secret Escapes, graze.com and Tails.com all received funding from Octopus Titan VCT.
If any VCT is going to find the next Facebook it is likely to be the Octopus Titan VCT in our view.
Committed to finding tomorrow's winners
Octopus Titan VCT has backed growth-orientated early-stage businesses since its beginning, so, unlike other VCTs, it didn’t need to adjust its investment strategy following the recent VCT rule changes.
Due to its size and position in the market, the management team believes it has the pick of the best companies.
It engages with around 5,000 businesses a year and sees 60-70% of what it believes to be the top tier of deals. Yet, after the stringent selection process, only a select few receive investment.
In the 12 months to April 2018, Titan has invested £39 million in 13 new deals and £50 million in 26 follow-on deals.
An example of a recent investment is memrise, a language learning app created by a Grand Master of Memory and a Princeton neuroscientist. The app now has over 35 million users and became profitable earlier this year.
Octopus Ventures, which manages the VCT, invested £4.4 million last year, but it had been tracking the company since 2012.
A track record of success to date
Octopus Titan VCT has realised a number of high-profile exits over the years, including trade sales to the likes of Amazon, Google, Twitter and Microsoft. These successes have helped the VCT pay 71p per share in cumulative dividends since launch. Past performance is not a guide to the future and dividends are not guaranteed.
One of the most recent exits is from Tails.com, which offers personalised dog food by post. Titan first invested when it was founded in 2013. In April 2018 Nestlé Purina PetCare acquired a majority stake for an undisclosed amount. Octopus Titan VCT realised a 10x return on the initial share price.
As is to be expected, not all investments work out. Since launch, 21% of companies have been exited at a loss. This equates to less than 12% of total capital invested. So far positive realisations have been sufficient to compensate for the failures, but there is no guarantee this will continue.
Risks - important
This, like all investments available through Wealth Club, is only for experienced investors happy to make their own investment decisions without advice.
VCTs are high-risk so should only form part of a balanced portfolio and you should not invest money you cannot afford to lose. They also tend to be illiquid and hard to sell and value. Before you invest, please carefully read the Risks and Commitments and the offer documents to ensure you fully understand the risks.
Tax rules can change and benefits depend on circumstances.
VCTs can now only invest new money in growth capital deals. Management buyouts/replacement capital deals and investments in mature companies are no longer permitted. This results in considerably higher risks.
What to consider next
Please visit the offer page using the link below to download the provider documents, read more (including risks and charges) and apply online.
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