Octopus Investments raises £2bn in private markets fundraise

Octopus Investments, part of Octopus Group, raised £2bn over the 12 months to 31 March 2022 in a fundraise aimed at pursuing private market opportunities.

This latest round of fundraising brought the total institutional funds under management (FUM) to £4.6bn after “significant” institutional fundraising across the group.

It also increased its pool of global institutional investors by 50 per cent.

Octopus raised over £400m for its care home strategy to meet the needs of the ageing population from investors including pooled and individual local government pension schemes, and overseas investors from the Netherlands, Scandinavia and Japan.

The firm stated that the strategy increases the supply of UK quality care homes to release pressure on healthcare providers and improve the quality of life for older demographics.

Another fundraise was the mandates to ramp up investment into renewable energy infrastructure, through which Octopus raised more than £800m in total and the National Employment Savings Trust (Nest) committed a further £200m in the period to invest in renewables projects in the UK and Europe.

Octopus also won an additional £150m corporate pension mandate to invest in renewable energy infrastructure, and £190m from a North American government pension plan to invest in the development of new renewable energy assets.

Octopus has said that the institutional capital it raised over the previous 12 months will ensure it is able to advance positive impacts for people and the planet on a larger scale.

Octopus Group co-founder, Chris Hulatt, commented: “Our client base has long been interested in private markets with a sustainable tilt, but we have seen a step change in commitments in the past year with additional capital being allocated to our strategies from investors across the globe.

“Healthcare and renewables are two particularly dominant trends, with the climate crisis and global pandemic putting a sharp focus on the role for private capital to drive tangible, positive change against these themes.

“While continuing to grow these strategies, we are looking closely at how to enable institutional investors to access growth companies. This will benefit the British entrepreneurs building world-leading companies and drive economic growth, while providing strong risk-adjusted returns and enabling greater end investor engagement.

“Central to this is working with the UK government on its consultation to remove the regulatory charge cap on pension schemes, that in most cases restricts them from accessing venture capital opportunities. This is a compelling private market opportunity that pension schemes should be able to access, alongside more traditional allocations.

“We have ambitious plans to grow our institutional investor base, bringing them innovative opportunities in specialist sectors that present both sustainability and compelling risk-adjusted return opportunities.”

Octopus outlined its priorities for the year ahead, which include encouraging investment into growth companies in the UK, creating effective deployment opportunities that can move the dial for the global energy transition, and tapping into growing demand for UK private markets among Middle Eastern, Korean and Japanese investors.

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