Octopus' Titan venture capital trust (VCT) is seeking to raise £120m of new share capital to invest in a higher proportion of new companies than has historically been the case.
The investment trust’s manager, Jo Oliver, said the trust has historically invested about 75 per cent of the new capital it raises in companies already in the portfolio. But this time, due to the scale of the opportunities he sees in the market, he said the proportion of the capital to be invested in new companies will be closer to 40 per cent.
The rules governing the types of companies VCTs can invest in were altered in the November 2017 Budget. The rule changes are designed to force companies to place more capital into companies that spend more on research and development, and away from companies that are lower risk.
The total amount that can be placed in any one company by a VCT fund was raised from £5m to £10m, and Mr Oliver said this has made his company a "net beneficiary" of the rule changes as it means they can deploy more capital into companies they like.
Jason Hollands, who runs the VCT business for the Bestinvest platform at wealth manager Tilney, said: "Titan is the largest VCT with a voracious appetite for new fund raising, which is partly down to its long-standing focus on early-stage companies that are more inclined to need periodic follow-on financing.
"Since the November 2015 Finance Act, VCTs have been refocused on providing venture and development capital to younger businesses.
"While for most VCTs this has resulted in significant changes to their new investment programmes - and in many cases the recruitment of additional investment professionals with experience at this end of the deal spectrum - Titan has arguably been the least impacted by these changes and so the 'new' VCT investment landscape certainly plays to their expertise."