Octopus Investments is seeking to raise £20m for its two alternative investment market (Aim) venture capital trusts (VCTs).
The VCTs will give investors access to around 75 Aim-listed companies from sectors such as pharmaceuticals, software development and building materials. The VCTs are intended to provide investors with long-term growth as well as income through established dividend policies.
Paul Latham, managing director of Octopus Investments, said: "There is consistently high demand from financial advisers and investors for VCTs. Demand is being driven largely by the reduction in the pensions lifetime allowance, which is impacting not just the super-affluent.
"Changes made to the tax regime for buy-to-let have also had an impact, forcing some investors to think about complementary tax-efficient investments."
The Octopus Aim VCT and Octopus Aim VCT 2 have a target tax-free dividend yield of 5 per cent a year. The share offer for both VCTs is available to 5 April 2019 for the current tax year and 2 August 2019 for the 2019/20 tax year but will close earlier if fully subscribed.
Investors can choose to split their investment, with 60 per cent in one VCT and 40 per cent in the other, or place all of their investment in either trust. The minimum investment is £5,000.
Richard Power, head of smaller companies at Octopus Investments, said: "Aim is now seen as the go-to market for ambitious growth companies and is home to an increasing number of well-known brands.
"UK smaller companies continue to be a key driver of UK economic growth and offer a compelling investment opportunity for investors over the long term. We are seeing a strong pipeline of investment opportunities - both from newly floating and already listed AIM companies – and remain excited about the growth potential of these businesses."
Russ Mould, investment director at AJ Bell, said: "There are three reasons to welcome the new VCTs. The first is Octopus has a very good record here. The second is the dividend yield is very attractive, even if we are now seeing some glacial movement in interest rates.
"Finally, there is the capital appreciation and the fact that VCTs sit well in a diverse investment portfolio, which makes them appealing for tax planning purposes."