The Octopus Apollo VCT has announced an offer for up to £75 million (£50 million + £25 million overallotment).
The VCT has total net assets of £439 million and a portfolio of 45 companies. The VCT invests in more mature, often profitable, businesses, focussing on software companies selling into corporate customers.
Over the five years to June 2024 the VCTs delivered a NAV total return of 49.4%. The VCT targets a dividend equal to 5% of NAV.
Nicholas Hyett, Investment Manager at Wealth Club said, “Apollo’s focus has served it well in recent years.
“Rising interest rates have been brutal for those companies that relied on regular investments to fund rapid growth – sapping capital out of venture investing as it found more reliable returns elsewhere. That has left many companies without the fuel needed to power the lightning-fast growth investors had come to expect.
“That’s less of a problem for Apollo. Its software investments are capital light, which means they can survive and even thrive without the regular cash infusions other start-ups often need. Their corporate customers are also more reliable than consumers, and once software is integrated into a business’s day-to-day processes it doesn’t get ripped out on a whim.
“Of course, the downside is that in the boom years these steady eddy businesses can look rather boring. But when boom turns to bust, boring turns to beautiful.”
