The Octopus AIM VCTs are seeking up to £30m of fresh funding.
The initial amount sought will be £20m, with a £10m overallotment. The VCTs already have total net assets of £200m and a portfolio of 80 companies.
The portfolio includes many established businesses, with 67% of the companies being profitable. The VCTs invest new money in qualifying AIM fundraises.
Over the 10 years to June 2024 the VCTs delivered a net asset value (NAV) total return of 1.2% and 4.3% respectively. They have a target a dividend of 5p and 3.6p, or a yield of 5%, whichever is greater.
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Nicholas Hyett, investment manager at Wealth Club, said “To say it has been a tough few years for the AIM market would be an understatement. The result is that performance among AIM VCTs, including Octopus AIM, has been lacklustre.
“This has not been helped by risk of reforms to Business Relief rules, which may see certain AIM stocks no longer qualify for inheritance tax relief.
“However, there are reasons investors could still look on AIM VCTs with some optimism,” he continued. “First, a lot of the pain is now in the rearview mirror – AIM valuations are low, creating scope for a recovery if sentiment turns.
“Secondly, if the Budget leaves AIM broadly unchanged, a flurry of new listings could reinvigorate the market. Finally, the pain suffered by the highest risk AIM companies mean AIM VCT portfolios are now weighted towards the more mature investments they made years ago.”
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