An update on Octopus Apollo VCT

What are our portfolio companies saying?

We are actively engaged with all our portfolio companies to support them. The current climate is clearly a fast-moving situation, with Government announcing measures for businesses on a near-daily basis. The companies in the portfolio will be reacting to those and we are working to assess any possible impact day-by-day. We are also proactively supporting our companies in understanding what Government support is available, including initiating a well-received program of webinars on specialist topics.

How has the NAV been affected?

The latest published NAV has to be a Fair Value as defined by the FCA and the International Private Equity and Venture Capital Guidelines. It is the responsibility of Octopus as the Fund Manager and the independent Apollo VCT Board to ensure that this requirement is met.

The NAV is therefore reviewed on a regular basis to comply with this requirement, including when any share transactions take place (allotments, share buy backs and dividend reinvestments).

In respect of the recent impacts of COVID-19 we have assessed each individual business within the portfolio and have made adjustments to affected companies where necessary. These adjustments have been reviewed by the Octopus Valuations Committee and approved by the external Apollo VCT Board. The unaudited NAV as at January 31^st and as adjusted at 2^nd April were both approved and announced to the market on 2^nd April 2020.

Against a backdrop of extremely volatile public markets which have seen significant falls since the outbreak of COVID-19, we view this as a good endorsement of Apollo’s investment approach.

You can find more information on the London Stock Exchange announcement.

When is the next dividend payment?

Apollo has historically paid dividends in the summer, towards the end of July, and in the winter, either in December or January (interim and final dividend). We currently expect to continue with this schedule. Please note, however, that dividends are not guaranteed.

How will the current situation impact the sale of energy assets?

A small proportion of the Apollo portfolio is made up of energy assets. We have been progressively exiting these historical deals as part of our transition to a portfolio of growth capital investments.

COVID-19 makes for a difficult market in which to exit any investment, energy assets included. However, we are taking active steps to identify likely buyers and will report any significant exits in due course.

How is deployment likely to be affected?

Currently, we expect market conditions to become more favourable to investors. Valuation expectations for companies seeking capital could well come down. We also expect healthy deal flow, with lots of companies looking to raise capital, whether or not they are finding the COVID-19 backdrop challenging. This should mean there is more opportunity for the team to make highly selective investments.  We also expect to continue to provide follow on funding to our existing portfolio where attractive.

Reminder of the key risks

• The value of investments discussed, and any income from them, can fall as well as rise. Investors may not get back the full amount they invest.
• Tax treatment depends on an investor’s personal circumstances and may change in the future.
• Tax reliefs depend on the VCT maintaining it’s VCT-qualifying status.
• VCT shares could fall or rise in value more than other shares listed on the main market of the London Stock Exchange. They may also be harder to sell.
• This advertisement is not a prospectus. Investors should only subscribe for shares based on information in the prospectus and Key Information Document (KID), which can be obtained from octopusinvestments.com.