The VCT PONZI scam is shown to be worse as every day passes...

 Anyone running a book on how many FCA Aurthorised Investment Managers state:

"we rely almost entirely for the success of our own business on endlessly raising new cash in VCTs" - or words to that effect?

The answer is now well into double figures and proof positive that VCTs are the very definition of PONZI schemes.

......but wait a minute, deeper financial analysis as a result of having to defend myself against the scurrilous litigation commenced by Octopus to block any and all shareholders ever soliciting a meeting of members, shows that things are even worse than at first thought and VCT managers have been scamming investors for years ... so by way of worked example let us use the example of Octopus' alltime "dog" of an investment that is Many Group Ltd (https://manypets.com/uk)....

... "dog" may seem a little harsh but in 2023 Octopus were still describing it as one of "..UK's generation-defining companies..some of which have become Unicorns" which perfectly demonstrates the total nonsense spouted by all Investment Managers about "our interests are aligned because of performance fees". No-one anywhere in the world, other than masters of hype and crypto, values a mere niche start-up loss-making specialty insurance intermediary (yes it is only an agent not an insurer) as a Unicorn - mind you perhaps the definition of Pet includes mythical creatures. I know 2021 was the ultimate hype year but someone at Octopus really lost the plot ! 

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Way back in 2016 Octopus invested in MANY for both OTV2 (62%) and their EIS "fund" (38%).

In 2018 Octopus "doubled-down" with OTV2 buying 91% and EIS 9%

In 2019 Octopus "doubled-down" again with OTV2 buying 95% and EIS 5%

Then along comes the £233.40 per share "Unicorn" Series D and a multitude of Octopus Scottish LPs so beloved by, and the entity of choice of, fraudsters, scammers and tax evaders labelled "Octopus Zenith ......" (ps do refer to the Albion blog about them using one LP to bribe ABRDN employees over getting  Hampshire County Council Pension Fund to rip-off the VCTs by investing in Quantexa at undervalue) and a gaggle of "offshore" LLPs labelled "..Opportunities" or "...SPV" investing £30,000,000.. 

Where do we stand in 2025? No-one knows because the Octopus director on the board of MANY (the crypto specialist Zihau Xu), along with his colleagues, filed an incomplete Confirmation Statement with all Octopus investments omitted. Accidental? Hmmm. 

Octopus' end 2024 valuation of MANY shares based on OTV2 holding?  

 £45.22 per share.  (80% loss to the poor saps who bought MANY Series D)

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But now comes the crunch .... proof that Investment managers never lose so long as they can milk the cashcow of any VCT "send me more money annually" PONZI scheme.... no wonder so many are the richest members of LLPs about to be properly taxed.

Applying the Octopus' "annual and performance fee rules" (EIS investors pay only on realisations) to those numbers:

Fees paid in cash by OTV2: (all based on Octopus annual stick-your-finger-in-the-wind numbers)

              2016-2024 Annual 2% "management" fees     £30,500,000

                                Performance fee 20%:            £27,200,000

                                                    TOTAL  £57,700,000

Current valuation: £24.6m and annual 2% still running at £420,000 per annum on MANY shares alone. 

Fees paid by OTV2 to date 234% of value of investment .


Fees paid by EIS investors:                £ NIL

and the Chairman of OTV2 told all present at the 14 October meeting that it was essential to continue to use Octopus as there would need to be follow on investments and only they know the businesses, and he refused to disclose the basis on which they decided not to place OTV2 into liquidation.

The reason? Fees, fees, fees and all in cash for the directors and Octopus.

I am going to run the numbers on the revised "only get fees on realisations" for the Calculus VCT. They still get cash annually for valuations unlike EIS.




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