Octopus Investments, the UK fund management focusing on the smaller company sector, has launched a ÂŁ50 million ($81.7 million) share offer in its Titan Venture Capital Trusts range.

Octopus Investments,  a UK fund management firm focusing on the smaller company sector, has launched a ÂŁ50 million ($81.7 million) share offer for its Titan Venture Capital Trusts range.

Octopus said in a statement that it is offering a 2 per cent discount on initial management fees for those who invest in the Titan VCTs before 11 November.

The firm recently announced a proposal to merge the Titan VCTs. This is currently pending shareholder approval, and if successful will result in all five Titan VCTs combining into one single VCT later in 2014.

VCTs, which have been around as tax-deductible investments in the UK since the mid-1990s, are designed to fund business start-ups and small-cap companies; their attraction as a source of financing has increased as conventional bank lending to firms has been squeezed in the current economic climate. Also, as the UK government has curbed tax-free pension savings for higher earners, VCTs and similar vehicles have been touted as attractive alternatives.

“Recent developments in pensions legislation mean we are seeing an even greater demand from advisors and their clients for planning tools that can complement or even offer an alternative source of income to a pension,” said Paul Latham, managing director at Octopus.

“There is a really strong appetite among advisors for VCTs as a result of this, and in particular the Octopus Titan VCTs. The Titan VCTs have a strong track record of performance and provide investors with an opportunity to access tax free income potential and a fantastic underlying portfolio of investments. We expect this latest fundraising to be warmly received by both advisor and investor communities,” said Latham.