Octopus Titan Reports £147 Million Loss in 2024 Under Pressure From Shareholders

Britain’s largest venture capital trust, Octopus Titan, has reported a loss of £147.6 million for 2024, bringing its cumulative losses over the past three years to more than £600 million. The trust, which focuses on investing in high-risk UK start-ups, acknowledged widespread dissatisfaction among its 20,000 shareholders, many of whom are high-net-worth individuals.

The trust faced a challenging year, with net assets dropping from £994 million in December 2023 to £831 million a year later. The negative impact was compounded by the devaluation of 72 companies within its portfolio, which collectively accounted for a reduction of £193 million, while only 39 companies were upgraded by £56 million. Among those that failed during the period were AudioTelligence, a hearing software company, and Dead Happy, a life insurance start-up that stirred controversy with its advertising.

Octopus Titan, which raised £107 million in fresh capital last year, has shifted its focus to addressing weaknesses in its existing portfolio. This strategic decision has resulted in a near-total halt in new investments. Tougher trading conditions and constrained growth have forced many of its investees to prioritise cash preservation over expansion, exacerbating the trust’s challenges.

Criticisms over fee structures have also taken centre stage. The trust paid £19 million in management fees in 2024 and has historically incurred performance fees totalling £82.3 million for prior successes. These figures have drawn ire from shareholders, a sentiment acknowledged by Octopus Titan Chairman Tom Leader, who admitted to “deep shareholder dissatisfaction” over the lack of capital growth and overall performance.

The pressure has prompted changes in leadership and culture within Octopus Ventures, the fund’s manager. Erin Platts, previously head of Silicon Valley Bank’s UK operations, was appointed CEO in January to help address internal gaps following a string of departures. The ongoing strategic review launched last September is assessing the sustainability of the business and scrutinising past investment decisions, although its findings will not be complete ahead of the trust’s annual meeting in June.

Venture capital trusts like Octopus Titan offer investors substantial tax concessions as part of a government initiative aimed at fostering British start-ups. Despite this, the trust’s struggles highlight the risks inherent to such investments. With the government extending VCT operations for another decade in 2023, the spotlight remains on fund managers to balance shareholder returns with entrepreneurial support.