Octopus Titan Shareholder Protests Over Fees Amid Poor Performance

Shareholders in the UK’s largest venture capital trust, Octopus Titan, have expressed outrage over £162 million in fees received by its management during a period of disappointing performance. Investors have accused Octopus Investments of failing to take responsibility for the significant losses experienced by the Titan fund, which has seen its net asset value plummet and share prices decrease dramatically.

The recent discontent stems from the over £82 million in performance fees charged by Octopus, triggered when Titan’s net asset value briefly rose in late 2021. Despite these fees, the fund’s current financial health paints a stark contrast, with shares now valued at just 28 pence, down from a high of 197.7 pence.

Investor Matt Russell, an experienced venture capital investor, voiced strong concerns regarding the management team’s accountability. He highlighted the lack of significant changes in the board and management following what many view as poor investment decisions. “Our children could pick better investment opportunities than the Octopus team,” Russell remarked, illustrating the frustration among investors.

Amidst ongoing performance issues, Titan has initiated a strategic review and launched a shareholder survey to gather feedback on investors’ concerns. The firm continues to charge a 2% annual management fee, which has generated approximately £22 million in recent years, adding to the dissatisfaction among shareholders.

Octopus Investments defends its actions, asserting that the performance fees were a reflection of Titan’s strong performance in 2021, when substantial dividends were paid out. The company maintains that its valuation processes are rigorous, involving independent audits and committee evaluations, yet this has not quelled criticisms regarding transparency and performance.

The broader investment landscape poses challenges for Octopus, especially given the recent scrutiny from the Financial Conduct Authority regarding the valuation of private assets. As Titan prepares to communicate further updates to shareholders later in April, the pressure mounts for the management team to address the needs and expectations of its investors more effectively.