Fern is the portfolio company that OITS clients hold shares in. Octopus Investments as the discretionary manager selected Fern because it is structured and managed in a way that is capable of meeting the objectives of OITS.  

OITS was designed with three core objectives: to provide investors with Business Relief qualification, to deliver steady long-term growth and to provide access if needed. Since its inception in 2007, we believe the service has maintained a 100% track record of Business Relief qualification and supported more than 8,000 estates.   

Fern owns and operates a diversified group of trading businesses across renewable energy, real estate and fibre infrastructure. Some of Fern’s more established businesses are already profitable, while others require investment to support their development and long-term value.  

Fern is overseen by its Board, which has a majority of directors independent of Octopus. Its share price is determined through an established valuation process, with external valuation input and review where appropriate.

One of Fern’s fibre businesses, Fern Fibre Trading Limited (FFTL), was involved in a potential M&A transaction. Because the outcome could have had a material effect on Fern’s value, trading was paused in July 2026 to prevent investors buying or selling shares at a price that might not fairly reflect the true value of the shares.  

When trading was first paused, the potential transaction had reached a stage where it could materially affect Fern’s valuation, but the timetable and possible outcome were not yet sufficiently clear to reflect reliably in the share price. The initial expectation of approximately one week was based on the information available at that point and the period in which we expected to gain greater clarity. 

As discussions progressed, it became clear that the transaction was more complex and would take longer than initially anticipated. Transactions of this nature involve detailed commercial, legal, funding, due diligence and governance work across several parties. The expected pause was therefore extended to six to eight weeks to allow that work to progress and to establish sufficient objective evidence to support a fair valuation. 

Since then, the process has advanced materially.  

We entered this process as it initially presented a compelling opportunity to deliver on our strategy to strengthen Fern Trading’s fibre businesses and deliver positive outcomes for Fern’s shareholders. Whilst the transaction has concluded differently than originally anticipated for a number of reasons, we welcome an outcome that brings stability to the market and creates the certainty needed for us to assess future opportunities and continue to pursue strategic options. We look forward to working with BT and the broader wholesale connectivity market to ensure it delivers for all.

We continue to believe AllPoints Fibre Networks (APFN), as an independent player, has an important role to play in the UK wholesale connectivity market and is well positioned to benefit from the long-term demand for high-quality fibre connectivity across the UK. 

As detailed above, the transaction itself has not simply moved through a fixed timetable. Its scope, structure and implications were continually assessed as more information became available. At the same time, we have considered how best to avoid continuing uncertainty within one part of Fern’s portfolio affecting all OITS investors.

We recognise that the changing timescales have been frustrating. Each estimate reflected our best assessment at the time, but the overriding priority throughout has been to avoid investors buying or selling at a price that may not fairly reflect the information available. 

Fern will be split into two share classes, which we explain in more detail through this Q&A.  

This change recognises that the more established assets and FFTL are at different stages and have different funding and strategic needs. Separating them will allow Fern’s wider established portfolio to stand on its own merits, while giving FFTL the time and flexibility to pursue its wholesale-first strategy and realise value from its platform and network assets. It will also enable OITS to reopen and restore access to the majority of existing investors’ holdings, rather than allowing uncertainty over one part of the portfolio to continue affecting the whole. 

We recognise that investment performance from the fibre sector has not met expectations over a number of years. While the new structure does not remove all uncertainty, we believe it provides a fairer and more sustainable framework to support investor access, aim to maximise value for all shareholders in the long term, and maintain the core objective of investing in companies expected to qualify for Business Relief. 

This change will be reflected in our systems by w/c Monday 5 October. 

This is a share split into two share classes (Fern A and Fern B), which will be followed by a separation of the business into the two parts. The separation will commence as we enter a transition period and is expected to take approximately two to three months, subject to the necessary approvals and completion of the legal and structuring work.

Yes. Each client’s existing Fern holding is expected to be divided between Fern A and Fern B using the same allocation basis. The allocation would reflect the relative values attributed to the assets and liabilities assigned to each share class at the agreed valuation date.

Fern A and Fern B are straightforward working names being used during the transition so the two holdings can be easily identified while the separation is completed. The Fern A portfolio is expected to remain in Fern Trading Limited and, subject to it continuing to meet the OITS mandate, we expect it to be the portfolio company for new OITS investment. Fern B is expected to receive a separate name that reflects its legacy nature: it will be closed to new investment for the foreseeable future and held only by clients who were shareholders at the point of the split. We will confirm the final names before the separation is completed. 

The change remains subject to the relevant approvals, completion of the valuation process and confirmation that the legal and operational arrangements are ready. Once known, clients and advisers will be told the effective date.

The allocation is expected to be based on the relative value of the assets and liabilities attributed to each share class at the agreed valuation date. The valuation and allocation methodology has been approved through the relevant Fern governance process. 

Clients should receive the same proportionate allocation, subject to operational adjustments such as rounding. Their overall Fern value immediately following the split should reflect the combined value of their Fern A and Fern B holdings, although each holding may subsequently perform differently. This is explained further below.

Fern A represents the more established part of the existing Fern portfolio. It is intended to place OITS on a stronger and more sustainable footing by separating these businesses from the more complex retail and wholesale fibre assets held in Fern B. 

OITS continues to operate as it does today. Subject to Fern A continuing to meet the OITS mandate, new OITS applications can be allotted shares in Fern A, which we will continue to target trading weekly. OITS will continue to target a steady, but modest level of return through investments expected to qualify for Business Relief, subject to the relevant conditions being met.

Fern A will be made up of Fern’s real estate businesses, property lending, renewable energy assets and Fern’s Central London focussed enterprise fibre business Vorboss.  

Vorboss operates in a different market from Fern’s retail and wholesale fibre businesses. It provides dedicated, high-capacity connectivity to businesses, landlords and public-sector organisations in London. Vorboss is on a faster commercialisation path, and its customer base, commercial drivers and market position are materially different from those of the consumer fibre market. It will therefore remain within Fern A. 

Fern A will not have exposure to FFTL.

Fern A is expected to continue to undergo a formal, full bottom-up valuation each quarter, with a new quarterly share price declared following review and approval through the established governance process. 

The latest approved share price however will be reviewed before weekly dealing. Where a material development means the price may no longer fairly reflect the underlying value of the portfolio, the price may be adjusted or dealing may be postponed while the position is assessed. This is what happens currently and isn’t changing.

Yes. Fern A will resume weekly dealing, subject to the transition arrangements and the availability of liquidity. It’s important to remember that as an unquoted company, liquidity cannot be guaranteed. Further detail is provided under the OITS trading section.

Subject to it continuing to meet the OITS mandate, new OITS applications can be allotted shares in Fern A. New clients will not receive shares in Fern B. 

Fern A offers new investors a diversified portfolio of institutional-grade assets in sectors where Octopus has a strong track record.

Fern B will be made up of Fern Fibre Trading Limited (FFTL), which includes the AllPoints Fibre wholesale platform and network, together with a fixed network covering approximately 420,000 premises passed. It will also hold sufficient cash reserves to continue operating and to pursue opportunities that support its strategy and have the potential to create value, including the current potential transaction.

Fern B will hold FFTL’s wholesale platform and network, including the fixed network covering approximately 420,000 premises passed, together with the cash reserves described above.

Fern B is expected to be valued formally at least annually. An additional valuation will be considered whenever a material event, realisation or proposed capital distribution means that the existing valuation may no longer be appropriate. 

Its valuation will reflect the circumstances, performance and prospects of its underlying assets and will be subject to appropriate external input, governance review and Board approval.

Fern B will not offer routine withdrawals or a regular dealing facility. 

Fern B will focus on maximising the value of the businesses and returning cash to investors progressively as assets are refinanced, sold or otherwise realised. The timing and amount of any return will depend on business performance, market conditions and the availability of suitable transactions. There is no guarantee that some or all invested capital will be returned within a particular period.

No. Fern B will be closed to new investment. Only clients who held Fern shares at the point of the split will hold Fern B shares.

The fibre sector has changed considerably since we first invested in FFTL and its challenges have developed over a number of years. To address some of these challenges, FFTL launched its wholesale-first strategy in May 2025 through the Aquila platform. Earlier strategies, including the development of the Cuckoo retail internet service provider and the integration of four alternative networks into a single platform, required significant capital and did not deliver the outcomes originally expected. The move to a wholesale-first model was a response to that history and was intended to make better use of FFTL’s network assets by providing a single platform through which internet service providers can reach customers across the network. 

Though the wholesale business has not performed as strongly as we would have wished during its first 12 months, it remains a relatively new strategy. FFTL’s leadership has been strengthened with experienced wholesale connectivity leaders aligned to the strategy, and the team remains focused on customer acquisition, operational delivery and building value from the platform and network. 

Whilst the recent M&A transaction did not conclude as anticipated for various reasons, the strategy is to continue developing FFTL’s wholesale platform and pursue M&A, partnership and bulk customer acquisition opportunities where these are considered the best route to maximising value for shareholders. Separating FFTL from Fern A should make it easier, legally, practically and commercially, to pursue these opportunities and to access alternative sources of capital where appropriate, without adding further fibre concentration to clients’ Fern A holdings. 

We will continue working to create and realise value from FFTL., and we believe the revised structure gives FFTL greater strategic flexibility while protecting the ability of the wider Fern portfolio to progress independently.

Based on the proposed structure and the advice received to date, we do not expect the creation of the Fern A and Fern B share classes to result in an immediate taxable disposal for clients. 

The tax treatment of the subsequent legal separation will depend on the final structure and remains subject to the relevant legal and tax advice. We will confirm the position once the structure has been finalised. 

OITS will reopen through a transition period rather than moving immediately to business as usual. During this period, we will implement the revised structure and operational arrangements. Further detail on the treatment of existing withdrawal requests and the future dealing process is set out in section four. We will keep advisers and clients informed and confirm in advance when the transition period will end and the business-as-usual arrangements that will apply.

Fern performance update

Fern A and Fern B will now each have their own share price. The Fern A portfolio will be valued quarterly and we will provide regular updates on its performance. We will report any material developments relating to Fern B, which is expected to be valued annually.

As at 1 October 2026, the Fern A share price is 106.3p. For comparison, the 1 July 2026 share price before the split would have been equivalent to 107.2p for Fern A.

Ongoing merger and acquisition activity in the fibre sector means that we have not been able to establish a fair value for the assets held in the Fern B share class. Fern B will be shown at its last valuation as at 1 July 2026 at 49.1p.

Fern A performance

The Fern A portfolio benefited from improved performance and valuation growth at Vorboss and Elivia. These gains were partly offset by a reduction in Melton Renewable Energy’s (MRE’s) valuation following regulatory developments, together with continued prudent provisioning in the property lending portfolio.

A notable positive development was the improvement in the outlook for the housebuilding sector after a period of valuation pressure. Elivia benefited from the Government’s announcement of new housing initiatives and stronger expectations for the UK housebuilding market.

These gains were partly offset by reductions in the energy portfolio. In particular, the MRE valuation was reduced following the Government’s confirmation that the Renewable Obligation Certificate (ROC) scheme will not be extended to smaller biomass generation assets in a similar way to the scheme for larger biomass generators announced earlier this year.

This is a one-off reduction as the level of support across the sector has now been clarified by the Government.

Overall, the performance of Fern’s portfolio was flat. However, some operational costs (including fees and some small property loan provisions) resulted in a small decrease in Fern A performance.

Yes, we expect Fern A and Fern B to continue to qualify for BR. 

No, we do not anticipate any changes to how the two-year qualifying period works for BR qualification.

The OITS mandate is unchanged. OITS will continue to seek to target a steady, but modest level of return through investments expected to qualify for Business Relief. However, Fern A and Fern B will have different asset exposures, liquidity arrangements, valuation frequencies and potential outcomes, as explained above.

Yes, we will be waiving any Annual Management Charge (AMC) for existing and new investors. 

Yes, although it’s important to remember that as an investment into an unquoted company, liquidity cannot be guaranteed. Whilst Business Relief products are only effective as an estate planning tool if they are held until death, we appreciate that circumstances can change and access to their investment has been a core feature of why advisers recommend using Business Relief qualifying products for investors. However, access to capital needs to be balanced alongside the portfolio’s core objectives of Business Relief and modest long-term returns.  

Following the transition period, we expect to introduce a 90-day notice period for withdrawals from OITS. This will allow us to forecast and plan for future withdrawals in a managed and orderly way, minimising the impact on the remaining investors and the portfolio. We will be in touch with more information about what this means as we work through the transition period.

The trading pause is expected to end next week for Fern A. Withdrawal requests will be managed through a governed process intended to balance access for clients with the liquidity available from new investment, cash generation, financing and portfolio realisations. 

There will be a transition period while we work through any existing withdrawal requests, and complete the operational changes needed to support the new Fern A and Fern B structure. This includes updating our systems and processes, reflecting the two holdings on client records and the online portal, confirming existing withdrawal instructions and implementing the revised dealing and valuation arrangements. 

During the transition, any investor waiting for a withdrawal before 1 October 2026 will be managed through the existing process. We expect the transition period to take approximately 90 days to work through. This is an expected timeframe rather than a guarantee and may take longer. Confirmed requests, including those relating to the estates of deceased investors, will be managed through the same process. 

Our aim continues to be balancing access for investors whilst ensuring fair value for all shareholders. 

We will keep advisers and clients informed as the changes are implemented. Once the existing requests have been addressed and the revised arrangements are operating as intended, the aim is to move to a sustainable business-as-usual process. However please remember that liquidity cannot be guaranteed.

We’re required to reach out to all advisers, to ask to reconfirm their client’s withdrawal request and if they would like to proceed on the revised basis, with the amount available for withdrawal restricted to the value of their Fern A shares. This will also include non-advised clients and the estates of deceased investors.  

We’ll provide a simple link which is the primary route for confirming whether a client wishes to proceed with their withdrawal on the revised basis. Advisers can complete it on a client’s behalf after confirming that they have discussed the revised basis with the client. We’ll also accept confirmation by email or telephone. 

For full withdrawal requests:

• If you confirm that the client wishes to proceed, the available Fern A shares will be sold when possible. Fern B shares cannot be sold.
• If you do not respond within 30 days, we will assume that the client wishes to proceed and will sell the available Fern A shares when possible.
• If you confirm that the client no longer wishes to proceed, the withdrawal request will be cancelled.

For partial withdrawal requests:

• The above confirmation process will need to be followed.
• If the requested amount can be met in full from the client’s Fern A shares, it will be processed when possible.
• If the requested amount cannot be met in full from Fern A, you will be asked whether the client wishes to proceed with a partial payment up to the amount available from Fern A. Any balance that cannot be met from Fern A will not remain as an active withdrawal request against Fern B.

Once responses are confirmed, requests will be processed in the order in which they were received. Withdrawals will be met only to the extent that they can be satisfied from the client’s Fern A shares. The Fern B portion will remain invested and will be returned only when Fern B has sufficient cash from cash generation or realisations.

We will process the withdrawal queue during the transition period in a series of tranches, allowing us to manage Fern’s cash flow in a controlled and orderly way. We expect those who have been waiting the longest to be included in the earlier tranches. As we do not currently anticipate a change to the Fern A share price during this period, unless there is a material development, we do not expect investors awaiting confirmation of their withdrawal to be disadvantaged.

Existing regular withdrawal instructions will need to be reviewed by advisers and clients as part of the transition to ensure they remain appropriate and can be supported under the revised structure. Fern A is expected to support regular withdrawals, subject to available liquidity and the agreed dealing process. Fern B will not provide a regular withdrawal facility. 

We expect for regular withdrawals to resume in October and therefore be paid at the start of November. We won’t pay any missed payments; we will have a bespoke communication for these clients and recommend you speak to your clients.

When we return to business-as-usual following the transition period, the proposed 90-day notice period is intended to provide time to manage withdrawals in an orderly way, reflecting the long-term nature of Fern A’s underlying businesses. It should not be taken as a guarantee that payment will be made immediately after 90 days of the request. Advisers and clients will be kept informed where payment is expected to take longer.

The existing vulnerability, financial hardship, bereavement and exceptional-circumstances framework will continue to be used. If your client needs additional support, or if their needs have changed since you last updated us, please get in touch.

Advisers should consider whether the revised structure, liquidity terms, valuation frequency, risks and expected returns affect the continuing suitability of OITS for each client. This will be particularly important for clients who may need access to their investment, have a withdrawal instruction in progress or have circumstances that have changed.  

We suggest you speak to the client and explain how Fern and OITS are changing, including that, subject to Fern A continuing to meet the OITS mandate, new investment can be allocated to Fern A and will not provide exposure to Fern B, and that the annual management charge is being removed. If the client remains happy to proceed, please let us know. If the client no longer wants to proceed, please let us know as soon as possible so the application can be cancelled.

No, we are waiving our AMC for existing and new customers. We will waive any historic accrued AMC.

For Fern A, the service fee will remain unchanged. For Fern B, the service fee will be deferred, and Octopus will receive it only if investors have received at least the current value of their Fern B shares, after all fees including the service fee, within three years.

Adviser trail commissions and ongoing adviser charging will continue to be paid in the normal way once trading resumes.