EISA Celebrating 25 Years | GBI 13 | Feb 2019 by Clifton Media Lab

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CONTENTS CHAPTER • 1 EISA celebrates 25 Years

Celebrating the 25th anniversary of EISA, Mark Brownridge, Director General, gives us his thoughts on the past, present and future of EIS

CHAPTER • 2 News

A round up of industry news

CHAPTER • 3 Finding Finance in a post-Brexit World

Industry experts share their views on what the world of smaller company finance will look like after March Brexit deadline

2019 Predictions

Andrew Aldridge, Head of Marketing at Deepbridge Capital looks into his crystal ball at what 2019 has in store for EIS, SEIS and VCTs.

The Exiteers

Bringing you news of successful exits in the sector

Supporting the creative Industries

Neil Martin talks to Dan Perkins, Commercial Director at Great Point Media, to find out how 2018 was for them and what beckons for 2019

Beware the 2019 VCT Capacity Crunch

Paul Latham, Managing Director of Octopus Investments asks whether there will be enough capacity to fulfill demand for VCTs in 2019

VCT Round Table

Insightful and informative articles emerging from key topics raised and discussed at GBI Magazine special VCT Round Table, London

CHAPTER • 4 Open Offers

Our listing of what’s currently available for subscription

Disclaimer

performance is no guarantee of future performance. The value of shares in any investee companies may go down as well as up and investors may not get back the full amount invested. Investors should not consider investing unless they can afford a total loss of their investment. Investments in unquoted shares carry higher risks than investments in quoted shares and involve a degree of risk as well as the opportunity of reward. It may be difficult to sell or realise the investment or obtain reliable information about its value. Any tax reliefs referred to in this publication are those currently applying or expected to apply. However, readers should be aware that tax reliefs and legislation can change. Their applicability and value will depend upon the individual circumstances of a given investor. Whilst the investments set out within may qualify for EIS and other tax advantageous breaks, there is no guarantee that EIS status or other tax efficient status can be maintained throughout the life of the investment. Both investee companies and investors need to comply with the requirements of the EIS legislation in order to maintain EIS Relief and non-compliance may result in the loss or partial claw-back of EIS Relief and potential interest penalties. The material in this yearbook is not to be regarded as an offer or invitation to buy or sell an investment, nor does it solicit any such offer or invitation, nor does it seek to endorse any particular investment product. Any information it contains is given in good faith, but no reliance should be placed upon the same. Applications to invest in any investment product referred to within should be made to the relevant promoter. GBI Magazine neither endorses any particular member, product or company/firm wishing to raise money under the EIS nor does it accept any liability for advice given. GBI Magazine is published by and a trademark of IFA Magazine Publications Ltd, Arcade Chambers, 8 King’s Road, Bristol BS8 4AB, Telephone 01173 258328 @2018 all rights reserved.

GBI Magazine is for professional advisers only. All material has been carefully check for accuracy but no responsibility can be accepted for inaccuracies. Wherever appropriate independent research and where necessary legal advice should be sought before acting on any information contained in this publication. The information and offers contained in this yearbook may not be suitable for all investors. Readers should be sufficiently aware of the risks and ensure that they are of a suitable category as defined by the Financial Services and Markets Act to review and invest in any of the potential offers or funds. The information given in this publication is not to be construed as advice relating to legal, taxation or investment matters. The information contained in this yearbook does not constitute or form part of any offer to issue or sell, or any solicitation of an offer to subscribe or purchase any investment, nor shall it or the fact of its distribution form the basis of, or be relied on in connection with any contract. This yearbook is aimed at UK Investors and is not aimed at persons who are residents of any other country, including the United States of America and South Africa where the funds referred to herein are not registered or approved for marketing and/or sale and where the dissemination of information on the funds or services is not permitted. The information provided in the yearbook is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution, publication or use would be contrary to local law or regulation. The information contained herein may not be reproduced, distributed or published by any recipient for any purpose without the prior written consent of GBI Magazine. No representation, warranty, or undertaking, express or limited, is given as to the accuracy or completeness of the information or opinions contained in this publication. As such, no reliance may be placed for any purpose on the information and opinions set out within it. Past

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Full subscription details and eligibility criteria are available at www.gbinvestments.co.uk ©2017. All rights reserved. Full subscription details and eligibility criteria are available at www.gbinvestments.co.uk

GBI Magazine is for professional advisers only. GBI Magazine is a trademark of IFA Magazine Publications Limited. No part of this publication may be reproduced or stored in any printed or electronic retrieval system without prior permission. All material has been carefully checked for accuracy, but no responsibility can be accepted for inaccuracies, independent research and where necessary legal advice should be sought before acting on any information contained in this publication.

What do we mean by ‘government backed’? In the interests of clarity, any reference made by GB Investments to the point that EIS, VCTs and similar investments are government backed relates to the government’s general approval of these schemes, indicated by their having granted them highly tax advantaged status. The use of this term does not imply that government would in any way act in the capacity as a guarantor or backer of last resort in connection with such schemes.

Welcome While we are all conscious of the machinations of politics around Brexit at the moment, as I write this, everything is still, pretty much, up in the air if not even more confusing as to what the ultimate outcome will be. So we, like all of you I’m sure, will watch with interest over the days and weeks ahead to see how things develop. Hopefully, by the publication of our next issue, the mist (or should that be fog?) may have cleared somewhat. We can hope!

Media, discussing GPM’s successes in 2018 and exploring exciting times ahead for them in 2019.

We start the year by sending massive congratulations to our friends and colleagues at EISA, on their 25th Anniversary. To mark the occasion (no pun intended) we asked Mark Brownridge, Director General at EISA, to write a feature length article for us as we wish them continued success in 2019 and beyond.

Finally, and as usual, our popular Open Offers section is brought to you in partnership with GrowthInvest. We invite you to check out all the opportunities that are currently available in this exciting sector, as we (and you!) prepare for a busy period in the run up to the end of the tax year in preparation for capitalising on the considerable benefits of integrating these dynamic investments as part of clients’ balanced portfolios - where appropriate.

Also in this edition, we have a special insight feature from industry experts who have generously shared their views of what the implications of Brexit might be on those small companies seeking allimportant finance after the end of March of this year. Paul Latham, Managing Director of Octopus Investments, shares his views and concern as to whether there will be enough capacity to fulfill the expected demand by investors for VCTs this year. Andrew Aldridge, of Deepbridge Capital, has gazed into his crystal ball for us to bring us his predictions for this sector in 2019. Over at our City Desk, Neil Martin has been chatting to Dan Perkins, Commercial Director at Great Point

GB Investment Magazine · February 2019

Along with our regular Exiteers feature, we’re pleased to bring you a special VCT Round Table feature. This consists of three thoughtful and insightful articles which have been written around the key topics that were discussed between our industry experts on the day of the event, in November last year.

We hope you enjoy this first issue of GB Investments in 2019. Alex Alex Sullivan Managing Partner CML | GBI Magazine | IFA Magazine

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25 YEARS OF

EISA To mark the 25th anniversary of the Enterprise Investment Scheme Association (EISA) we asked Mark Brownridge, Director General, to give us his thoughts on the past, present and future for EIS”

t seems 2019 will be a momentous year.

With all outcomes still possible, Brexit is set to dominate the political headlines once again as we career chaotically towards the 29 March. Its frightening to think that the future direction of our country for years to come could be decided in 2019. But 2019 is set to be a special year for another reason. It was 1994, when Michael Portillo, the then Chief Secretary to the Treasury announced that “The purpose of Enterprise Investment Schemes is to recognise that unquoted trading companies can often face considerable difficulties in realising relatively small amounts of share capital. The new scheme is intended to provide a well-targeted means for some of those problems to be overcome.” 2019 then marks the 25th anniversary of the Enterprise Investment Scheme, making it one of, if not the, longest running tax incentive investment schemes in the world. In that time, EIS has helped over

GB Investment Magazine · February 2019

27,000 companies start and scale up their business and provided over £18 billion over equity funding. It’s a phenomenal success story and has helped companies across a wide range of different sectors and industries to achieve their goals and ambitions, including companies that have gone on to become multi million pound generating, globally recognised names, such as Gousto, Eve Sleep, Graze, Brewdog and Ten Lifestyle Group. Over the past 25 years, EIS has continued to support the next generation of entrepreneurs, innovators and disruptors and EIS investors and has stepped in and provided much needed funding when no other source of funding was prepared to. A common thread amongst entrepreneurs and business owners who have received EIS investment, is that EIS investment was vital to their success, particularly in the early stages when access to growth capital was thin on the ground and the banks didn’t want to know. Alex Cheatle, Chief Executive and Co-Founder of Ten Lifestyle Group, an

AIM-listed lifestyle management business has gone so far as to say “It’s absolutely fair to say that we probably would not have a business today without EIS”. Cheatle was able to provide his EIS investors with a 15x initial investment return but of course not all of the 27,000 companies that have so far received EIS funding have been able to match that. It’s the unfortunate nature of a start up that failure rates are high and investors lose money. A tax incentive scheme like EIS isn’t able to “pick winners” and the government fully recognises that they rarely, if ever, have the necessary resources and information to successfully target support to specific firms, sectors or technologies. Instead, the government relies on such schemes, to target entrepreneurial firms based on a number of criteria, such as age and size (financial and headcount). They do so because empirical evidence over a 25 year period has shown that young and innovative businesses have been key drivers of job creation, innovation and productivity in a number of studies. Moreover, companies that receive equity investment are more likely to grow faster, particularly in terms of turnover. More of the companies with turnover growth of more than 100% each year have used equity financing than those growing less quickly. Two important investment lessons emerge from this. One, EIS funded companies are more likely to succeed when compared to companies with no EIS funding. Two, there are winners out there but picking them is extremely difficult so you’re better off investing across a diversified portfolio of EIS qualifying investments to increase your chances of success. Over the course of 25 years, EIS has faced many challenges. Not least that it has survived 5 different Prime Ministers and 3 different governing administrations (Labour, Conservative and a coalition) in that time. New governing administrations, as we know, like to tinker with long established schemes (think pensions!) particularly those introduced by the previous administration. So whilst we’ve experienced yo-yoing rates of income tax relief, certain areas of investment encouraged and then excluded from investment and of course the intervention of the EU, to have survived relatively unscathed over such an extended period is testament to the significant contribution EIS has made to the UK economy. Every government since 1994 has recognised this. The government doesn’t undertake statistical analyses of the impact of the effectiveness of tax incentive schemes but anecdotally for every £1 invested via tax efficient schemes, the Government gets back £4. But that’s the past. What about the future?

business and establish it as the place for entrepreneurs to start, develop and grow a small business thus creating an “Innovation Nation”. Indeed, KPMG’s 2018 Global Technology Innovation Report recently ranked the UK as the third most promising market for innovation, disruption and technology breakthroughs that have global impact. The challenge however, as Mel Stride, Financial Secretary to the Treasury has put is “to encourage our entrepreneurs and help their bright ideas to become productive businesses”. This is where EIS will have an important role to play in the coming years. In effect, we have come full circle. Further in fact. Compare these comments made by Geoffrey Howe, Chancellor of the Exchequer in 1983 in respect to the introduction of EIS’s forebearer, the Business Expansion Scheme (BES) to Mel Stride’s above “by concentrating help on those companies which do not have ready access to outside capital, the scheme will assist many more small or medium companies to realise their undoubted potential for growth”. The services and sectors in which our small businesses operate today may have changed beyond all recognition in those 25 years but they still face the same funding problems their predecessors were facing. EIS remains both relevant and required. So, 25 years on its really a case of back to the future for EIS. The focus going forward is firmly on three areas: growth, innovation and technology. For investors and advisers the portents are exciting; Dealflow in the UK in these areas looks particularly strong as increasingly, does the prevalence of exits, EIS remains one of the most tax efficient investments available and small businesses still require and respect EIS funding. EIS has been and will continue to be a British success story to be proud of. At the EIS Association we will celebrating those 25 years in a number of ways over the course of 2019, culminating in a gala dinner on 20th June. Please do help us celebrate! GBI

It’s clear that in a post Brexit environment, the government wishes to reiterate that the UK is open for

GB Investment Magazine · February 2019

TIME promotes Roger Skeldon to co-fund manager

IME Investments, the long income property and estate planning firm, has promoted Roger Skeldon to co-manage its TIME: Commercial Freehold fund and TIME:Social Freehold fund. Both were launched to financial advisers in October 2018. Skeldon has over 15 years’ experience in fund management, finance and commercial property. He has been at TIME Investments for over seven years and has operated as Assistant Fund Manager for TIME:Commercial Freehold and TIME:Social Freehold since their inception. He was previously an Assistant Director at Close Brothers Group asset management division. Skeldon will manage the flagship TIME:Commercial Freehold fund alongside Nigel Ashfield, Managing Director of TIME Investments. Skeldon will also co-manage the £36 million openended social infrastructure fund, TIME:Social Freehold fund which was recently launched to the adviser market. This fund seeks to offer investors consistent income from long underlying rental income streams linked to inflation, whilst creating a positive impact on society. Ashfield said: “I am delighted to announce Roger’s new role as Co-Fund Manager. He is an experienced investment professional with a deep knowledge of long income property who has made a fantastic contribution to our business.” GBI

GB Investment Magazine · February 2019

News

TMT disposes of Wrike

MT Investments, the AIM-listed venture capital company investing in high-growth technology companies, has disposed of its entire holding in Wrike for a net aggregate cash consideration of US$22.9 million. The board of TMT believes that the disposal demonstrates the company’s ability to identify and invest in early-stage high-growth companies within the technology sector that have the ability to create significant shareholder value through capital appreciation. TMT told GBI Magazine that the disposal represents a substantial uplift in the valuation of TMT’s investment in Wrike of approximately US$14.5 million and will, on receipt of funds, result in a material increase in the company’s available cash to over US$25 million. The company will continue to seek to identify and invest in opportunities within the technology sector and will keep shareholders updated of developments in this regard as appropriate. The company has also taken the prudent decision to impair its investment in Wanelo by approximately US$3.5m. Despite the impairment of Wanelo, the disposal will result in a significant increase in the company’s NAV of approximately US$110 million, equivalent to approximately 37.5 cents per share (before adjustments for the company’s ongoing operating expenses, bonus accruals, insignificant revaluations, potential future impairments, and similar items).

Alexander Selegenev, Executive Director of TMT, said: “Following Vista’s partnership with Wrike, we are delighted to have achieved our largest cash exit to date. Wrike has always been one of our largest portfolio stars, and we are very pleased at having identified such a talented and professional team, led by Chief Executive and founder Andrew Filev, as Wrike’s very first institutional investor back in 2012. TMT originally invested US$1 million in Wrike, and the current exit proceeds are additional to the US$800,000 TMT received from its partial exits from Wrike in 2017. “The board believes that a total return of over 23x on our original investment demonstrates our ability to achieve significant capital growth for our shareholders by identifying and investing in early stage highgrowth tech companies, which shareholders would be unable to access otherwise. Our focus as investors is on identifying companies that are capable of scaling up globally. Founded in 2006, Wrike is today used by over 17,000 organisations, with 1 million users in 130 countries. “TMT continues to exercise a diligent impairment policy, with the company’s management using its discretion to impair individual portfolio companies based on their perceived prospects, even in the absence of formal transactions. Accordingly, we have taken the decision to impair the carrying value of Wanelo to more accurately reflect Wanelo’s likely current valuation. Having originally invested only $350,000 in Wanelo in 2011, the new impaired value of $1.8 million still represents significant potential upside for TMT.” GBI

This represents a material uplift in the company’s NAV of approximately 13.7% from the previously stated figure of $2.75 per share as of 30 June 2018.

GB Investment Magazine · February 2019

Foresight makes MEIF investment into smart textiles business

oresight Group has made a £249,000 equity investment into Footfalls and Heartbeats through the Midlands Engine Investment Fund.

Based in Nottingham, Footfalls has developed what it claims to be a revolutionary and proprietary process for manufacturing smart fabric, which uses nanoscale interactions within the textile to make the fabric itself the sensor. The technology can be used in medical applications such as bandages, or within sports apparel and shoes, monitoring the pressure being exerted on a specific body part and transmitting data in real time, wirelessly to a receiver. The money from the MEIF will be used for continued development of product prototypes with several world leading commercial partners in the fields of healthcare and sports. Footfalls will also continue to develop its intellectual property, as well as purchase additional production equipment. Footfalls was founded in 2012 by Simon McMaster, who has worked with the University of Nottingham, a world leading institution in the field of Fibre Optic Technology. It has established a partnership with Footfalls to develop and exploit new technologies. The University has invested in Footfalls and as a result is a major shareholder. Footfalls Founding Director Simon McMaster said: “These are exciting times and we are delighted to have Foresight’s backing. With their investment we can move forward with our plans to bring more prototyping in-house with the purchase of a bespoke, one-of-a-kind, knitting machine and the employment

GB Investment Magazine · February 2019

of additional staff to join the existing, multidisciplinary team. This investment will allow Footfalls to deliver the various development agreements in shorter time frames. It will also help us to achieve our patent and commercial licensing goals.” Jordan Lavender, Investment Analyst at Foresight Group, added: “This innovative game-changing textile manufacturing technology developed by Footfalls & Heartbeats is precisely the type of opportunity MEIF was created for, where funding from other sources is hard to come by. We look forward to seeing the Company develop and grow as we share the journey with this enthusiastic team.” Grant Peggie, Director, at the British Business Bank, commented: “The Midlands Engine Investment Fund was set up to support companies such as Footfalls and Heartbeats to bring innovative new products to market. It is particularly good to see the that MEIF is working alongside the University of Nottingham to develop technologies that could have a global impact. Midlands’ universities are key drivers of innovation and growth across the Midlands Engine area and we would encourage all Universities across the Midlands to explore MEIF as a potential source of investment for small, innovative companies.” The Midlands Engine Investment Fund project is supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank.

News

YFM exits Gill Marine

YFM Equity Partners has sold its stake in Gill Marine Holdings for an undisclosed sum to the Myers family office, working in conjunction with Pop Capital, a specialist brand investor. The acquisition provides a full exit for all YFM funds and delivers a 2x return on its original £9m investment. YFM and its advised funds, including British Smaller Companies VCT and British Smaller Companies VCT2, backed the management buyout of Gill Marine in 2013. Gill is a British performance apparel brand which has more than 40 years of heritage in designing technical clothing, footwear and accessories for elite sailors, and marine enthusiasts, within its global distribution network. It is led by Chief Executive Jamie Tunnicliffe and his team of Chief Operating Officer Ian Poore, Commercial Director Dominic McCarthy and Product Director Matt Clark.

our success. We are now well placed to continue the growth and look forward to working with our new owner to deliver Gill’s full potential as a global marine inspired technical apparel brand.” Ian Waterfield, Partner at YFM, added: “It has been a real privilege to work with the outstanding Gill management team, supported by Chairman Steve Richards. Gill is a fantastic brand and we are sure that the new owners of the business will help drive even further growth.” YFM and the other shareholders were advised by Ash Burman of Financo, and Richard Medd and Sam Sharp at Browne Jacobson LLP acted as legal counsel. KPMG provided financial due diligence support and Pragma Consulting provided commercial due diligence. The Myers family office was advised by Osborne Clarke, Deloitte, Macfarlanes, PWC and Cains. GBI

Tunnicliffe said: “These are exciting times for Gill. YFM has supported us through a period of significant expansion and played a key role in helping us achieve

GB Investment Magazine · February 2019

ADVERTORIAL

TOWARDS A CHALLENGE LED APPROACH TO

VENTURE CAPITAL

or a long time the traditional venture investing model has gone unchallenged. While portfolio returns can be significant, there remain large risks associated with early stage companies; a company’s journey from start-up to scale-up is, after all, one of its most uncertain and challenging times. Emerging recently however, is a movement towards a new, distinct approach to venture investing based upon the need to address certain risks associated with nascent companies – establishing market fit. This new ‘challenge-led’ approach can accelerate the growth of these early-stage enterprises and potentially boost returns for investors. Venture investing has typically focused on researching a broad cohort of companies, and sought to identify those businesses likely to be successful. Whilst this has been the natural assumption underpinning venture capital to date, the analysis often ignores the crucial factors that determine the success and longevity of the vast majority of start-ups. Research suggests more than forty percent of failures of early stage companies arise from problems in the initial phase; testing market demand. Put simply there is either no market need for a product, the product is not a hit, or the company has the wrong business model. Market participants have found these problems difficult to address, potentially exposing investors to a greater level of risk from the outset and leading, at best, to lower returns. But a new approach is pioneering a way to mitigate these risks. The approach sees large corporates and early stage businesses work together. It starts with the market challenge, by asking large corporates what they need to fix within their own business to

GB Investment Magazine · February 2019

make themselves more competitive and serve their customers better and then focuses on early stage companies that can, or already do, offer solutions. In doing so a market fit is established far earlier, thereby eliminating one of the crucial issues that leads many fledgling enterprises to fail so early, while also looking to reduce investors’ risk exposure and increase their potential returns. We are already employing this new strategy, having launched a new, Venture Fund share class for our existing Triple Point VCT 2011 plc. The new approach draws on the expertise and reach of our own Venture Network, encompassing a wide range of corporate innovators and entrepreneurs. They match the Network’s over 5,000 innovative young companies with big corporates to help them solve some of their key operational and trading issues. By investing in growth businesses that already have established a strong market fit the challenge led approach mitigates the main risks inherent with venture investing, helps underpin investor returns – and may, potentially, transform the face of venture capital. Risk Warning: As with any investment there is no guarantee that target returns will be achieved and investors’ capital is at risk. Past performance is not a guide to future performance and may not be repeated. Tax rules and reliefs are subject to change. Triple Point Investment Management LLP is authorised and regulated by the Financial Conduct Authority, firm reference number 456597. Triple Point Administration LLP is authorised and regulated by the Financial Conduct Authority, firm reference number 618187. GBI

GB Investment Magazine Â· February 2019

FINDING FINANCE IN A

POST-BREXIT WORLD Industry experts share their views on what the world of smaller company finance will look like after the March Brexit deadline

s we enter one of the most turbulent political and societal periods in recent memory, there has been a lot of attention on large businesses and how they will operate in or outside of the UK after March 2019.

proposition on intellectual property (IP) as opposed to physical assets or products. These IP-rich companies often have trouble finding support without physical collateral to offer as security.

However, for the wider economy of small, scaling, and medium-sized businesses, securing funding to galvanise their market position and achieve the next level of growth are often forgotten about in times like these. Four industry experts have given their advice on how to achieve growth finance for start-ups and scale-ups and how investors can negotiate the preBrexit landscape.

Individuals looking to invest through SEIS can then make decisions based upon individual cases and potential rather than being held back by regulation or corporate policy. Of course, the risk still exists but with tax and loss reliefs, it is much more likely that the risk will be seen to be worth it in the eyes of an investor. Getting ideas off the ground is arguably the most important part of encouraging new businesses and creating new jobs as they grow and expand.

Mark Brownridge, Director General of the Enterprise Investment Scheme Association (EISA)

Luke Davis, Chief Executive and Founder of IW Capital

Securing funding as a start-up is often one of the biggest challenges that new businesses face. Not only is it often difficult to secure the funding itself, it is even more so when trying to get the right kind of funding for the specific needs of the business. This is key to the government’s plans for strengthening the UK economy as SMEs make up 98% of private sector businesses and contribute £1.9 trillion to the UK economy. Allowing this sector to grow and bolster its numbers is absolutely key to the future.

It can be daunting for start-up businesses to scale into fully-fledged entities, especially in times of political and economic uncertainty. This is where alternative finance options come in that we, at IW Capital, help to provide. We can provide both debt and equity-based funding through EIS which, much like SEIS, offers investors a government-backed tax efficient way to support small businesses, balancing out some of the increased risk to capital that comes with the territory of investing in new companies. EIS has a much higher limit for annual investment making it more suited to SMEs that are past the initial stages of set-up compared to SEIS with an annual limit of £1 million.

One of the routes that allows this to happen in the UK is through SEIS, which offers investors tax reliefs in order to offset the higher risks involved in investing capital into start-ups. SEIS represents an alternative to start-ups from traditional finance routes such as banks that may not be willing to lend. This is especially useful for small businesses that base their

GB Investment Magazine · February 2019

This is particularly important for knowledge-intensive SMEs that struggle to secure funding without assets to use as collateral for loans. With an industrial focus on research and development this will be key

moving forward with the government’s plans to grow the tech industry. This is reflected in the increased EIS limit for knowledge-intensive companies of £2 million per year, this change has been introduced to provide further encouragement to investors to support IP-rich businesses. Supporting SMEs is hugely important for the UK economy as they represent the employment of around 16 million people in the UK - depending on who you ask - and this number is currently growing at a rate that is three times faster than for big corporations. Fueling this growth will be key moving into a post-EU economic landscape that will rely even more heavily on domestic business and job creation. Jonathan Schneider, Capital Step

Executive

Chairman

Family-run and regional businesses form the lifeblood of the UK’s entrepreneurial landscape. Equally, it is apparent that the funding options available to established family-run enterprise seem to be eclipsed - in local communities - by corporate entities that have greater exposure to the most appropriate funding options. The role of the family enterprise, community SMEs, and bricks and mortar productivity across the length and breadth of Britain must be considered a firm priority for the UK government - deal or no deal. Transitioning the immediate aftermath of Brexit will be an acutely sensitive process; ensuring the foundations for a business community that can thrive and scale in the long term will lead the charge for a successful post-Brexit future - the UK economy is only as strong as the businesses and communities that uphold it.   As both investors and entrepreneurs, we have witnessed countless examples of business owners having to give up control of their companies in exchange for funding. In many instances, even successful founders end up with a disproportionately small reward for their hard work upon exit as a result of having sacrificed too much ownership and control along the way. The Capital Step model is specifically designed to address this issue, by providing flexible capital solutions without existing shareholders having to give up ownership or independence in exchange.

Jenny Tooth, Chief Executive of the UK Business Angel Association (UKBAA) In our current political landscape, Brexit will undoubtedly be at the forefront of investor sentiment for 2019; where and how much investors invest will be very much dependent on the broader economic and political climate. It is expected that, as investing in the EU markets will become more challenging for investors, we should see an increase in investment for businesses which are globally focused. I therefore anticipate a continual growth in investment towards some of the most significant emerging technologies and fintech as these sectors will continually have societal and global impact. We as trade bodies, policymakers and commentators bear a significant responsibility to assist UK SMEs in what will be one of the most critical periods in their business life, ensuring contingency plans, scalability options, growth strategies, and immediate resilience responses to ensure their successful navigation of the seismic impact of Brexit. In particular, the UKBAA has focused a significant amount of attention on increasing regional investment, with the implementation of many angel hubs throughout the UK, especially in Northern regions. However, there is still a long way to go to fully utilise the untapped potential found within these areas. This can only be done when it is popularly recognised that there are significant investment opportunities outside of London beyond Brexit. With the Brexit deal still to be decided by all parties, rifts within the government, and businesses battening down the hatches ahead of March 2019, SMEs and SME investors may be uncertain of what the future holds for the UK’s entrepreneurial economy. However, much of the alternative finance arena is optimistic about opportunities for both investors and scale-up enterprises. Whether you are a start-up, scale-up, established business or investor, there is still a vast array of opportunities for you throughout and after Brexit. GBI

GB Investment Magazine · February 2019

2019 PREDICTIONS PREDICTIONS FOR ALTERNATIVE INVESTMENTS Andrew Aldridge, Head of Marketing at Deepbridge Capital, looks into his crystal ball to see what 2019 has in store for EIS, SEIS, and VCTs.

eing asked for predictions for 2019 is somewhat of a poisoned chalice and given the high-profile uncertainties at home and abroad it may be foolhardy to categorically state that ‘X is likely to happen’. It should be caveated that political and economic certainty are both, by their very nature, myths but perhaps we can all agree that 2019 has more foreseen uncertainty than most years – at the time of writing, everything Brexit-related is up in the air, the US government is closed, a US and China trade war continues to loom large and Apple has issued its first revenue warning in years. So, against this backdrop what predictions can possibly be made? I’m certainly not going to make any predictions about who the UK Prime Minister will be by the end of the year, nor will I attempt to make any assumptions around the UK leaving the EU. With all that in mind perhaps any look at the future for 2019 must begin and end rather closer to home. We all know that different political parties look at the financial services market in different ways, and therefore when looking ahead we must try to adopt an ‘all things being equal’ approach, even if this is a highly unsatisfactory one and means we may have to talk in generalities. MORE INVESTOR UNCERTAINTY? So, what of financial services in general? Advisers are likely to have seen how the uncertainty of our economic and political future has developed into ongoing investor uncertainty. It seems logical to acknowledge that for many this means keeping one’s powder dry, however, let’s also be completely aware of the fact that Brexit does not change the fact we are just a few months away from the end of the tax year or that individuals will continue to want to utilise tax-efficient investments before that particular deadline. Indeed, tax-efficient investments, by their very nature of being unquoted, and therefore largely uncorrelated assets,

GB Investment Magazine · February 2019

may be particularly appealing to those appropriate investors who are staying away from the main markets but who wish to see their cash being active. If we acknowledge that some decisions are way beyond the control of either investment managers or advisers, what are we to make of the tax-efficient investment sector? Needless to say, we are positive about how 2019 might unfold in that regard and believe both advisers and investors will continue to become increasingly aware of the importance of taxefficient investments, especially how they might fit as part of a balanced portfolio. This is a continuing theme from recent years as advisers seek to find alternative tax-efficient homes for investors. Whatever you might think of the current government, it’s fair to say it – and especially Chancellor Philip Hammond – has been supportive of the EIS, SEIS, and VCT sectors. There appears to be a strong and growing consensus that EIS and SEIS are vitally important for both job creation and economic growth in the UK, and that entrepreneurs and start-ups in particular should have access to a wide and varied array of potential funders who secure their money via such investors. SIGNIFICANT SHIFT We have seen a shift in our sector since the Chancellor announced a return to how EIS was originally envisaged – investment in higher-risk businesses rather than simply focusing on capital preservation. 2019 will also see more meat placed on the bones of the government’s ‘knowledge-intensive’ EIS approved fund structure, as providers consider their options and opportunities, and we get a sense of how this will be delivered to investors. Some of the core issues with the EIS/SEIS sector are also unlikely to go away anytime soon. A number of providers have struggled to deploy funds expeditiously and within the same tax year, leaving problems for those advisers

who recommended such schemes and clients in terms of accessing their tax reliefs. A number of providers have recently had to dramatically change tack in order to meet the changed risk to capital requirements, and we are also seeing newly-formed/refocused teams, who do not have experience in certain sectors, struggling to find the necessary deal flow. Due to this, the messaging around EIS and SEIS investment stays the same, even in a time of potentially great upheaval. Advisers and investors should continue to focus on those managers that have always been growth-focused and can demonstrate they have the necessary specialism, skills, experience and quality, in their chosen sectors – and importantly have the opportunities available in order to ensure expeditious deployment of capital. For example, our team has spent years operating in the technology and life sciences sectors, and this experience tends to be appreciated by those looking for managers who know what they’re doing and want to ensure that funds are deployed quickly, thereby allowing their investors to claim their tax reliefs. UK: A HOME FOR TECH Interestingly, no matter what happens when it comes to the UK leaving the EU, we believe this country will continue to be seen as a great home for technology and life sciences start-ups and scale-ups. The UK has a rich history in these sectors, and we as an investment manager work particularly with universities and science parks to help support those firms who are established here. When speaking with entrepreneurs and venture capitalists overseas, it is particularly interesting to note that globally the UK is still seen as one of the best places for tech start-ups to be based as there is funding available – this reputation is unlikely to be tarnished by Brexit, certainly not in the short term at least. Overall, while 2019 does look politically uncertain and the results of such uncertainty are never going to be overly positive, we believe the EIS/SEIS market is in a great position for the next 12 months and beyond. We have growth-focused businesses here that need investment and who want to create jobs, exports and deliver further innovation. However, there are still ongoing issues for some managers to overcome, particularly as those who were previously focused on ‘capital preservation’ propositions adapt to the new world. We do not wish to see unnecessary deployment delays and sector inexperience damaging the reputation of the EIS as a whole. 2019 can deliver great opportunities for advisers and investors – as always, it depends on the client circumstances and appropriate advice – but let’s not kid ourselves that we know what is coming next, after all I’m pretty sure our politicians don’t know either. GBI

GB Investment Magazine · February 2019

THE EXITEERS Bringing you news of successful exits in the sector Fund: Seneca Partners EIS Portfolio Service Exit: Foodpack

ETAILS OF THE FUND

The opportunity was introduced by the administrator of food packaging company Foodpack. After careful consideration and a short period of due diligence, we recognised the potential of the company and quickly assembled a new senior management team and a package of equity and debt funding to buy the trade and assets of the company out of administration. Our EIS Portfolio Service funded £1.275 million of the equity investment. The combination of the funding package and expertise of Seneca’s investment team and the senior management team we brought in, has meant a business that had failed was now back into profit and had safeguarded the jobs of c.150 employees previously at risk We invested in October 2015, and exited on 30 November 2018, so an investment period of three years and two months. WHAT DOES THE COMPANY DO?

Foodpack is a food packaging and manufacturing company with a state of the art facility and a blue chip

GB Investment Magazine · February 2019

customer base. The company is based in St Helens. WHAT DID THE COMPANY INVEST THE MONEY IN? The funding package from our EIS Portfolio Service has enabled the company to maintain its major customers and drive profitability through the deployment of funds into the following areas: - To support working capital: in the wake of the previous company’s administration, the new company Foodpack Ltd initially struggled to obtain credit. Also, while a cost rationalisation exercise was put in place, any delay in implementation would need funding. Finally, the company was required to reach agreement with ‘ransom creditors’ in order to continue to trade with its major customers. - Capital expenditure: there has been increased investment in plant and equipment to improve operations and win new customers. - New leadership team: as a part of the support package we put together, we utilised our unique partner network to source two experienced senior food industry professionals, to help turn the business around. They both joined the board and

took a shareholding in the company. We also placed one of our senior managers, Tim Murphy, on the board and in the first few weeks utilised the experience of our own management team to help provide the day to day financial management of the business, whilst the new permanent management team bedded in. - Upgraded IT accountancy software package: given the size of the business the existing package wasn’t fit for purpose. During the first three months post investment, funds were used to install a fully integrated software package adequate to support the company’s forecast growth. - Senior management team hires: funding has helped the business to recruit additional resource to its senior team and drive efficiencies from its operations, particularly in relation to its existing machinery. - The jobs of c.150 employees previously at risk were safeguarded as the business has returned to profit. HOW MUCH WAS RAISED? £1,275,000 equity raised, all from Seneca. HOW WAS THE EXIT ACHIEVED? The business was sold to Integrated Packaging Services. Seneca found the acquirer and provided corporate finance services during the transaction, advising the company on the sale.

HOW MUCH WAS RETURNED TO INVESTORS? Investors benefited from a 2.3x return on investment, excluding tax, and a 3.3x return net of tax. The return was above Seneca’s target return of 1.6x to 1.8x WHAT OTHER BENEFITS HAS THE COMPANY PROVIDED? The original food packaging company was a major employer in the area. Our investment secured the jobs of 150 people and resulted in the local supply chain being maintained. There is an inevitable knockon effect for other support businesses in the area and of course, the existing factory continues to be used rather than standing derelict. The company has since been able to employ another 20 full time staff along with a number of agency staff. From a taxation point of view, our investment means that there are c.170 individuals paying tax through PAYE and in due course the company will be due to pay corporate tax. In addition, the employed staff will have no or a lower requirement for state benefits. HOW WILL YOU CONTINUE TO SUPPORT THE COMPANY? We have now exited the business in full and will have no impact on the company going forward. GBI

GB Investment Magazine · February 2019

SUPPORTING THE CREATIVE INDUSTRIES City Editor Neil Martin talks to Great Point Media’s Commercial Director Dan Perkins, to find out how 2018 was for them and what beckons for 2019.

t’s all too easy to forget that some of the top dramas you will have seen recently on television and cinema screens require funding, and that to achieve success in the area of raising finance for entertainment content, is no mean feat. One firm that leads the way is Great Point Media. To date, its senior management team has produced, financed and distributed over $2 billion of entertainment content, and has over 300 production credits in film and television collectively. Given its long and successful track record, it’s a surprise to learn that the Great Point Group (to include both the parent Great Point Media (GPM) and their FCA regulated subsidiary Great Point Investments (GPI)) is just six years old, having been established in 2013 by media industry stalwarts Jim Reeve and Robert Halmi, together with a highly experienced team of media focussed EIS professionals. Dan Perkins, Commercial Director and a “Big Four” trained chartered accountant, heads up the Great Point Group’s intermediary sales team having spent the past 10 years of his career managing alternative investments and working with UK based financial advisers to help educate investors and promote the best EIS, SEIS and BR qualifying opportunities the market has to offer in the media sector. GREAT POINT INVESTMENTS GPI is the FCA regulated subsidiary of GPM. It offers a strong and unique track record in the management of EIS qualifying media companies. At the time of this

GB Investment Magazine · February 2019

interview, the Great Point Group manages and advises around £224 million of EIS and SEIS qualifying capital across more than 130 separate businesses with over 2,800 unique investments. More than 170 financial intermediary firms have introduced their clients to its funds, including some of the UK’s largest private banks and IFA networks. 2018 I begin by asking Perkins, how was the year that’s just been and gone? “It was a busy year on many fronts, with television production activity continuing apace across all of our live Select Television Production offers. Well-received shows aired during the year include ‘Kiri’ (Channel 4), ‘Lear’ (BBC / Amazon), ‘Save Me’ (Sky) and ‘The Cry’ (BBC). We also closed out our biggest single fundraise of £70 million at the beginning of the year and have been busy deploying funds with a number of projects produced by our investee companies recently airing include ‘Manhunt’ (ITV, 9pm 6, 7, 8 January, currently available on the ITV Hub) and ‘Brexit’ (Channel 4, 9pm 7 January, currently available on All 4) starring Benedict Cumberbatch.” GPM considers it has a number of USPs which marks it out in the sector. Not least is its unrivalled media sector knowledge, and network of industry relationships and strategic partners. Added to this is the proprietary deal flow and a number of ‘first look’ deals it has with industry bodies and leading institutions. There is also the firm’s broad investment approach which is designed

Growth Funds. We have complemented this hire by adding four highly experienced consultants to the team that bring a wealth of media M&A and venture capital experience to the table as well as an enviable list of industry contacts and relationships. “We are also launching our new IHT service, Great Point Estate Planning, this month. It looks to build on the excellent trading performance of one of the underlying investee companies, Illium, which we have raised capital for and managed over the past three years as a standalone entity.” SPECIALISM We move on to discuss the firm’s specialism.

to create diversification for investors, rather than create unnecessary concentration risk by focussing too heavily on a particular sub-sector of the creative industries. Finally, and almost most importantly, there is the unique blend of financial, operational, commercial and investment management experience specific to the media sector that the team brings to the table.

“GPM has a unique blend of financial, operational, commercial and investment management experience specific to the media sector” Perkins expands on the developments that came in 2018. “Whilst we have been busy deploying monies raised under previous investment strategies, we also spent a large part of 2018 developing our current investment opportunity, Great Point Ventures EIS, which looks to embrace HMRC’s ‘Risk to Capital’ conditions by taking a more growth focused venture capital approach to investing in the UK creative industries. “As part of this development process we have recruited a new Head of Legal, Taryn Strong, who was previously at Channel 4 where she advised the broadcaster on their Commercial Growth and Indie

“Our area of expertise is media. Whilst the financial services sector often grabs all the headlines in terms of regularly being the biggest contributor to the UK economy, it is a lesser known fact that the creative industries have made a record contribution to ‘UK Plc’ in the past few years and have grown at twice the rate of the wider economy, now representing over 5% of UK gross value added and generating a huge £91.8 billion a year for our domestic economy. “In addition, between 2010 and 2016 the economic contribution of the creative industries has grown by over 44% and now employs almost two million people nationwide. When you consider these statistics alongside a growing global population consuming more entertainment media than ever before and a backdrop of corporate behemoths such as Amazon and Netflix reportedly spending a combined $13 billion on content in 2018, you can start to understand why we, and several other investment managers, believe the sector currently presents huge opportunities for growth focussed, long term investment.

“…behemoths such as Amazon and Netflix reportedly spending a combined $13bn on content in 2018…” EIS CHANGES I then ask Perkins about his views on government’s recent changes to EIS. “Whilst the cynical minority in the industry may have considered the implementation of the ‘Risk to Capital’ conditions by HMRC earlier in the year as the death knell for media- based investing in the UK, given the way the changes have been embraced by the media investment community and others with a more general investment remit, quite the opposite is true.

GB Investment Magazine · February 2019

“There is a plethora of media based businesses with significant growth plans out there – the new rules aim to direct investment into those entrepreneurial businesses seeking to innovate and disrupt, and ensure investors that put themselves ‘on risk’ when investing are rewarded with potentially significant returns whilst at the same time afforded the downside protection that the generous tax reliefs available under the EIS provide. Change is what you make it – it can be seen as a threat or an opportunity for someone to make a difference. The UK creative industries are well positioned in uncertain economic times to take on the challenge and drive real value for all stakeholders long into the future.” EIS EFFECTIVENESS So, will future government changes impact EIS effectiveness? “Under the current government we would not foresee any significant future changes to EIS, given the introduction of the ‘Risk to Capital’ conditions in March 2018 and the effect that has had on the market in terms of re-focussing capital to businesses targeting growth over the longer term. “In our view, the key to ensuring the continued effectiveness of the EIS is keeping things as simple as possible for the investor and their advisers. A slight concern we have with the introduction of the ‘Knowledge Intensive EIS’ wrapper, for example, is that it adds complexity to an already complex market – our view would be that given the effect the introduction of the ‘Risk to Capital’ conditions has had, maybe the benefits of investing in a knowledge-intensive EIS should simply be rolled out to all EIS qualifying companies, thus maintaining a level playing field for all budding UK entrepreneurs.” DIVERSIFYING CLIENT PORTFOLIOS Can EIS investments continue to help diversify client portfolios? “In recent times, the EIS investment world has become quite “tech” focussed, which does pose an interesting dilemma for your typical IFA – ‘Even if I diversify my client’s EIS portfolio by manager, am I really diversifying their underlying portfolio of investee companies in terms of sector exposure?’ “As a result, an opportunity such as Great Point Ventures EIS, which is very much focussed on the booming UK creative industries, could prove to be a very useful tool for advisers in terms of mitigating risk through a well-diversified investment portfolio at both a manager and sector level.”

GB Investment Magazine · February 2019

EDUCATING CLIENTS My final question on process centres on how can advisers continue to educate their clients about the investment opportunities in EIS? “By engaging more with industry bodies such as the EISA which is making a real effort to increase engagement with the intermediary community through events such as their ‘Effective Financial Planning’ seminar which we sponsored in December. Managers are also far more amenable to hosting CPD qualifying events for advisers and educational workshops for investors, which we would very much encourage attendance of. “Equally, investment platforms such as GrowthInvest, research tools such as MICAP and industry focussed publications by Intelligent Partnership/GBI have really helped in terms of giving advisers and investors a more ‘whole of market’ view and a real insight into the vast array of opportunity out there.” YEAR AHEAD We finish by looking to the year ahead. “The outlook for 2019 is positive – HMRC’s ‘Risk to Capital’ conditions have accelerated our launch plans for a heavily growth focussed media EIS (Great Point Ventures EIS) and in response to the huge array of lending opportunities our industry presents us with we have decided to launch a new BPR qualifying investment service, Great Point Estate Planning, in January - following on from the commercial success of our previous single company offering, Illium, over the past three years. “Finally, over the past two years we have been looking at ways to expand and diversify our business into the non-tax advantaged investment space. We are delighted to report that we are scheduled to close a $50 million equity fundraising round at the end of January which will focus on venture capital investing into media focussed businesses predominantly in the US, with our first investment opportunity in the ‘media facilities’ sub sector already lined up. This launch is particularly exciting for us and should create investment synergies for the UK focussed Great Point Ventures EIS in the future.” So, when you next watch a quality programme or film, you might just have the Great Point Group to thank for helping get it to our screens. GBI

GB Investment Magazine · February 2019

BEWARE THE 2019

VCT CAPACITY CRUNCH More people than ever will need VCTs but will there be enough capacity to fulfil their needs in 2019, asks Paul Latham, Managing Director of Octopus Investments.

he government introduced venture capital trusts in 1995 to encourage investment into Britain’s smaller companies.

changes to taxes that impact investors, particularly around buy-to-let, pension contributions, and dividend taxation.

They provide the benefits of 30% income tax relief, long-term potential for growth and tax-free dividends. While encouraging investors to take more risk with their wealth they have to be held for a minimum of five years.

It’s likely that demand over the last two years has been boosted by this. And it’s expected that this combination of taxes on investment will continue to encourage demand for tax-advantaged investments in 2019.

Of course, VCTs won’t be for everyone. It’s important to remember VCT capital is at risk and investors may get back less than they originally invested. Tax treatment also depends on individual circumstances, the VCT maintaining its qualifying status and may change in the future. IS VCT FUNDRAISING SET TO DECLINE? Perhaps – but the reason why may surprise you. It’s not demand but supply that could see recent trends begin to taper off. The sector as a whole has seen two bumper fundraising years. Last tax year, VCTs raised £745 million, an increase of £175 million, or 30% on the previous year and the highest amount raised in more than a decade. There are still plenty of factors expected to drive demand in 2019, but there could well be a shortage of high-quality VCTs fundraising. That’s because fundraises are always a balance between the needs of VCTs and the needs of the market. DEMAND REMAINS STRONG In recent years we’ve seen the government make

GB Investment Magazine · February 2019

The fact is, many more clients are now facing the kinds of tax problems that would compel someone to consider investing in a VCT. BUY-TO-LET SQUEEZE For a start, clients who are buy-to-let landlords face the phasing out of mortgage interest relief. Before the changes came in, landlords only paid tax on their net rental income after interest paid. We’ll see this continue to be phased out in the 2019/20 tax year, with just 25% of mortgage interest deductible (compared to 50% this year) and the remainder qualifying for a 20% tax credit. From April 2020, landlords will be unable to deduct any mortgage interest and they will only receive the basic tax credit. That means landlords that are higher or additionalrate taxpayers won’t get relief for their mortgage repayments, as the credit only refunds at the basic rate. It could also result in the landlord paying tax at a higher rate as their taxable income will be higher. To give you an idea of the impact, a higher-rate taxpaying landlord receiving £950 rent a month and paying £600 towards their mortgage would have

received a tax bill of £1,680 prior to April 2017. Yet from April 2020, the tax bill would be £3,120. It’s clear to see that many clients with a buy-tolet portfolio facing this problem might find a VCT investment attractive. LARGE PENSION POTS PENALISED The tax treatment of pensions has also become less favourable. For clients with especially large pensions, continuing to make contributions to their pension could potentially become less tax-efficient.

Reducing the dividend allowance has meant that clients who stand to receive a dividend now face a greater tax bill. And because of this, many business owners have starting looking to VCTs to extract profits from their business tax efficiently. For business owners the income tax relief from a VCT could offset the tax they pay on their dividends. Also dividends paid by the VCT over their investment period will not be subject to income tax, so will not compound the issue in the future. VCT CAPACITY CRUNCH?

The lifetime allowance (LTA), a limit on the value of a pension pot at the time it is drawn, is currently £1 million. But when introduced, the allowance was set at £1.5 million.

Having fundraised large totals over the past two years, it makes sense that some VCT providers will have reduced capacity, or may even choose not to open for investment at all in 2019.

This might not seem like a big change, but the reality is that many more higher and additional rate taxpayers are exceeding their allowance. In fact, the tax revenue raised from those exceeding the LTA grew from £5 million in 2006/07 to £102 million in 2016/17.

A VCT simply might not see sufficient opportunities for deals in the market to warrant a large fundraise.

Additional rate taxpayers now have their pension contributions capped at £10,000 a year so for those wanting to save tax efficiently, VCTs can be an option for long term investment for money they would otherwise have contributed to their pension. There are also those who have a pension pot that either is, or is expected to exceed £1 million where VCTs could be an alternative investment avenue. People may need to think about this well before their pension has actually reached £1 million due to predicted growth between now and the date of pension drawdown. VCTs can be an alternative for people who don’t want to add to their pension pot, alongside ISAs to save tax efficiently for the long-term. TAX ON DIVIDENDS For small business owners the rate of tax on dividends will be higher this year than it has been for a long time. This is because the rates of tax on dividends has been increased and a new tax free allowance brought in that increased the effective rate of tax for those receiving significant dividend income each year. On top of this, that new dividend allowance has been reduced from £5,000 to just £2,000 for the current tax year.

Many VCTs take a prominent role with portfolio companies, often taking a position on the board of directors. Especially for smaller providers, there’s finite capacity to carry out this kind of work. It’s also worth noting that, overall, the number of VCTs raising funds has been declining in recent years, and there were five fewer VCTs managing funds in 2017/18 than in 2016/17. IMPACT FOR INVESTORS Given that VCT capacity could be more limited in 2019, while demand is expected to be further driven by a reduction in tax reliefs attached to other forms of investing, clients that leave it late may well be left disappointed. This reduced capacity could leave clients with less time to invest in their preferred VCT. When Octopus AIM VCTs opened in 2017 with a fundraising target of £40 million, it filled in 21 weeks. Compare this to the following year, when its smaller fundraise of £30 million closed in just eight weeks. So for those considering a VCT investment, it’s important to plan sooner rather than later. This way you maximise the chance to be able to invest in your preferred VCT. GBI

GB Investment Magazine · February 2019

M AGAZINE

VCT ROUND TABLE LONDON

GB Investment Magazine Â· February 2019

Round Table

n November of last year the team at GB Investments Magazine invited leading industry experts to join a special Venture Capital Trust (VCT) Round Table in London. As ever, the format created discussions that were both animated and enlightening focussing in on the key issues and topics that are relevant to you, our readers. With changes to pensions legislation, the use of VCTs is becoming far more widespread by advisers looking to capitalise on the tax-efficiency of these investments as well as the opportunity for delivering long term capital growth within clientsâ&#x20AC;&#x2122; portfolios.

Our editorial team has created the following feature articles based on the conversations which took place at the round table. In highlighting some of the key issues to consider when planning to invest in VCTs, they discuss attitude to risk, essential due diligence and the importance of good research all of which emerged from conversations on the day. We hope you will find the articles informative and timely as we move into what we know is one of the busiest times of the year for advisers and wealth managers with the end of the tax-year approaching.

Participants Round Table, London Paul Wilson

Chairman | IFA Magazine Publications, Clifton Media Lab M: +44 (0)7817 772963 E: Paul.wilson@ifamagazine.com

Alex Sullivan

Managing Partner | IFA Magazine Publications, Clifton Media Lab T: +44 (0)117 325 8328 M: +44 (0)7974 708771 E: Alex.sullivan@ifamagazine.com

Annabel Brodie-Smith

Communications Director | Association of Investment Companies (AIC) T: +44 (0)20 7282 5580 M: +44 (0)7798 624449 E: Annabel.Brodie-Smith@theaic.co.uk W: www.theaic.co.uk

John Glencross

Chief Executive | Calculus Capital T: +44 (0)20 7493 4940 M: +44 (0)7798 624449 E: john@calculuscapital.com

Madeleine Ingram

Head of Investor Relations and Marketing | Calculus Capital D: +44 (0)20 7518 8058 E: madeleine@calculuscapital.com

Tony Catt

Compliance Consultant | TC Compliance Services M: +44 (0)7899 847338

David Lovell

Operations Director | GrowthInvest T: +44 (0)20 7071 3945 D: +44 (0)20 7655 6074 M: +44 (0)7771 985187 E: David.Lovell@GrowthInvest.com

GB Investment Magazine Âˇ February 2019

COMING OF AGE: VCTS APPEAL AND NEED IS GROWING The number of people benefitting from VCTs is increasing just as the alternative investments are becoming better understood and their appeal is rocketing

CTs are becoming a more obvious investment choice for an increasing number of high earners just at a time when they are ‘coming of age’.

The appeal of VCTs continues to grow and last year, Association of Investment Companies (AIC) data showed that the alternative investment vehicle had raised £728 million in the 2017/18 tax year, a huge 34% rise on the £542 million raised the year before, and the highest ever amount raised at the current level of 30% upfront income tax relief. Before last year, the largest sum raised was £779 million, when the initial tax relief on investments was 40%. As of 5 April 2018, the amount of assets under management in VCTs totalled £4.3 billion, showing the appetite for the investments is significant. The investments had a further boost from the government’s Autumn Budget last year, according to Annabel Brodie-Smith, Communications Director at the AIC. She noted the Budget reiterated VCTs place as ‘an effective provider of patient capital’. ‘There’s a lot to be excited about in the VCT industry, let alone the companies that bring it alive,’ she says. While the backdrop, and government attitude towards VCTs, is all positive, there is still a relatively small number of people using VCTs, and plenty of people missing out on the investment opportunities as well as tax relief. David Lovell, Operations Director at Growthinvest, a platform that provides access to tax efficient investments, said while the funds have seen record years, ‘I firmly believe there’s a much bigger audience among high-net-worth investors and the number is relatively small’.

GB Investment Magazine · February 2019

With many problems in financial services, the problem boils down to education, both on the clients part and the advisers part. But circumstances dictate that more clients than ever will need to, and be willing to, access alternative investments. Lovell says for some clients ‘VCTs aren’t right for them or they’re not comfortable with the level of risk’ but despite this there is ‘still a need for further education for investors and advisers that these tax schemes are there and they’re government-backed’. One of the biggest boosts for VCTs has been the reduction of the limits on pension contributions. The lifetime allowance has been cut from £1.25 million to £1 million, meaning high earning investors have had to find new ways to fund their retirement without incurring large tax charges, and are therefore making VCTs a core part of their retirement plan. ‘We’re seeing more and more advisers coming to us saying they’ve not done this before, but they need to as they have higher-rate taxpayers approaching their pensions limit, and if they don’t mention this as an alternative, someone else will,’ says Lovell. ‘There’s a lot of great information out there and advisers are realising that they need to get into the marketplace.’ While VCTs are of interest for high-net-worth investors, VCT industry experts and advisers both agree that they are not a substitute for pensions. John Glencross, Chief Executive of Calculus Capital, says his experience is ‘knowledgeable advisers are looking at [VCTs] as a companion to pensions’ rather than an alternative. He believes there are many people out there at the moment who do not even know they need an alternative to their pension as they are unaware of the pension allowance changes.

Round Table

‘A lot of people, without even being aware, have gone through that and I don’t think the government warned people enough to check the limits on their pensions,’ he says. ‘They could have claimed certain allowances at the time in terms of where they came into the system but, if they didn’t, they just suffered the consequences.’ He adds that the punitive treatment of buy-to-let investing will also push individuals towards VCTs, as well as the low interest rate environment. ‘We’ve been in a low interest rate environment for some time, but the thing about VCTs is that they pay attractive levels of tax-free dividends,’ says Glencross. ‘If someone has assets but a certain amount of cash, which they’re paid practically nothing on - you see people rushing in to get a latest bank [account] offer - and the thing about VCTs is that, on average, they pay a 4.5%-5% tax-free dividend... that’s a very attractive level of return for the higherrate taxpayer.’ All the signs point to VCTs being an attractive investment: capital returns, tax-free dividends, tax relief upfront, and government-backing, some advisers still remain wary of the sector. Tony Catt, Compliance Officer at TC Compliance Services, says advisers should introduce VCTs as ‘a positive alternative investment’. However, he admits that the tax relief can be a ‘hurdle’ as VCTs are known just for the tax relief rather than as an investment in their own right. ‘Advisers need to remember that clients want capital retained so they’re not wanting to put it into a blackhole,’ he says. ‘They need to see it as a positive investment as an an alternative once you’ve run out of your pension allowances. It should be the first stop after that.’

GB Investment Magazine · February 2019

However, Catt notes that not all advisers can advise on VCTs, even if they want to, because of restrictions placed on them by their networks. ‘As far as advisers are concerned, a major issue is dependent on where they actually operate,’ he says. ‘If they operate within a network, the networks are scared of VCTs.’ However, Catt adds that directly authorised advisers can ‘do what they like’ but ‘they say [VCTs are], on the risk scale of one to six, would be 21’. Many advisers will be still be convinced that VCTs are risky but a good understanding of the underlying investment in the VCT can help take away some of the fear factor of recommending them. ‘We have highlighted the tax benefits, they’re significant,’ says Glencross. ‘But I do feel that it’s also important that the adviser and the client feels comfortable with what’s going on under the bonnet. What’s being invested in? He says once advisers understand what investments are underpinning the VCT, they ‘tend to be enthusiastic’. ‘I sat next to an IFA at an event and he said what was most important to him is wanting communication from the fund...on the nature of the investments and how they’re doing because clients love involvement,’ he says. ‘Tax relief is fantastic but there’s an issue with getting advisers comfortable with the risk, but let’s get to what the industry does, it invests in incredibly interesting companies, some that are potentially world class.’ Glencross says VCTs have ‘come of age’ and managers are capable of ‘taking out some unnecessary risk’ while capturing the gains. ‘We can talk about the amazing tax benefits, but we need to show that we have some incredible investments being made,’ he says. Promoting the underlying companies, and the benefits they have to the UK economy, is something that should happen more.

GB Investment Magazine · February 2019

Round Table

Brodie-Smith says the companies are bringing VCTs ‘to life’ and client interest doesn’t stop at putting money into them. ‘They’re interesting companies, but also a lot of people who’ve been involved in running companies like the interaction with the chief executive and like to see where their money is going to help,’ she says. ‘It’s also about economic benefits for the UK.’ Not only that, but VCTs are proving their worth with their returns. Brodie-Smith says the average VCT was up 147% over 10 years and ‘that’s not even thinking about tax relief’. Understanding the risks of investing in VCTs does not mitigate the fact that investing in early-stage companies is inherently more risky than a more standard investment. ‘These are early stage companies and have a higher risk profile,’ says Glencross. ‘But if you look at some big companies in the last 10 years, you might dispute that.’ He adds that most VCT portfolios invest in 40 to 50 companies so they are ‘diversified portfolios’ and VCT managers and their portfolios have ‘come of age’.

year, so each year they will have that further element of diversification and potentially reaching over 100 companies with three investments,’ he says.

‘If we take into account the tax risks and the incredible nature of the companies and the fact that the VCTs have come of age, most VCT managers have been in business for 20 years and know what they’re doing,’ he said.

As well as diversifying by spreading client money across a number of VCTs and using VCTs as a companion to pensions, Glencross says advisers should be looking at using EIS as a companion to VCTs.

Brodie-Smith adds that advisers and clients also have the ‘reassurance that [VCTs are] a listed company subject to company law and listing rules with an independent board to oversee what’s going on’. ‘I think that structure should give investors a lot of reassurance,’ she said. Madeleine Ingram, Head of Investor Relations and Marketing at Calculus Capital, says an IFA she had spoken to while looking at VCTs from a tax perspective was ‘also looking at asset diversification’ and that investing in a VCT would provide access to small UK companies, which his client did not already have. Lovell says advisers are ‘not just diversifying with one manager, many go into multiple VCTs each year’. ‘We have one who has been investing into VCTs for 20 years and invests in at least two or three each

‘We’re talking about VCTs but there’s another tax advantaged product, EIS, and I’ve sat in meetings where it’s felt competitive but they go comfortably together,’ he says. Advisers should consider VCTs for older clients in particular because they have a need for income, which investors can get via tax-free dividends, which Glencross says is ‘attractive’. ‘For the retired investor, if appropriate within their portfolio, it can be a good source of additional income,’ he says. ‘For the older investor, VCTs don’t have inheritance tax relief, so there’s a place for the older investor to look at both as with the EIS will come inheritance tax relief.’ ‘It’s interesting to see younger investors coming into VCTs; they’re at an affluent point in their lives and the tax relief is very attractive,’ he says. GBI

GB Investment Magazine · February 2019

INFORMATION IS KING WHEN IT COMES TO VCTS Due diligence around VCTs does not need to be more difficult than a more general fund but advisers must really focus on the client’s risk level

s with any other investment ‘research is everything’ when it comes to picking VCTs and deciding on client suitability, say industry experts.

Like other investment propositions, VCT managers produce plenty of information packs to help support advisers in making the right choice for their clients but plenty of IFAs still seem wary about dipping a toe into the alternative investment world. But they have to remember that picking a VCT is no more difficult than picking a more standard fund. Tony Catt, Compliance Officer at TC Compliance Services, says ‘research is everything’. ‘Most VCTs can produce some lovely, glossy documents so there’s plenty of information about the fund and the investee companies within that; that’s useful background information,’ he says. Catt says advisers may use Growthinvest, a platform that provides access to tax efficient investments, to compare. ‘Once you’ve done that research, and then the suitability, you can probably cut and paste some of the documents,’ he says. He adds that advisers probably do not need to do anymore ‘as they’ll have their investment template and these funds are just another within a portfolio’.

GB Investment Magazine · February 2019

Annabel Brodie-Smith, Communications Director at the Association of Investment Companies (AIC), says the AIC website has a wealth of ‘statistical data on VCTs’. Of course, VCTs are by their nature higher risk because investing in smaller start-up businesses is inherently risky. This means they will be suitable for a smaller demographic of clients, however, this doesn’t mean the suitability report has to be any different from the standard suitability checks that IFAs are used to. ‘The burden is gaining the knowledge to advise and recommend, but once you have that, it’s just like any other fund,’ says Catt. He says when he was an adviser, VCTs would have only been suitable for one or two clients. Even if the VCT is suitable for a client, this doesn’t mean they will have the confidence to agree to the recommendation. ‘I did all the research [on VCTs for the clients], I did a 30-page report, I knew all about them by the time I was telling the client, but it was the confidence of the client thinking [whether] they should take the step and if they need to take this step with this risk,’ he says. Catt says advisers should be asking: ‘does the client need to take that extra level of risk?’ ‘Tax efficiency is one thing but the risk level [is another]. The Financial Conduct Authority (FCA) doesn’t want a granny to use it as an ISA and the whole thing might go down as the risk hasn’t been explained,’ he says.

Round Table

Instead, the VCT should be part of a portfolio so that ‘froth at the top is the bit of excitement’ and the client should invest in ‘lots of other things before looking at the VCT’. ‘The VCT is the sporting element of the portfolio to add a bit of zing and bit more return,’ says Catt. For advisers who are not confident about recommended tax-advantaged investments, the level of due diligence may not seem cost effective. Catt says the advisers coming back to do increased due diligence will ‘take longer to do the research, so they’ll wonder if it’s cost effective’ to advise on alternative investments. He describes third-party research house as ‘invaluable’ but says the reputation of the firm is key. John Glencross, Chief Executive of Calculus Capital, says that researching the research houses is also important as ‘some are reputable’ and one adviser will think one is legitimate and another will think it is terrible. ‘By and large they have different ways of expressing themselves but it’s probably okay if you go to one of the well-known firms and use their research intelligently,’ says Glencross. The suitability, or not, of VCTs has not escaped the scrutiny of the regulator, with the FCA undertaking a thematic review into overall IFA due diligence. Glencross, says the FCA was concerned about whether IFAs had done a ‘proper investigation’ of investment product recommendations. ‘That probably meant that, given that most IFAs cover a wide range of products, that they had access to third-party research and that it’s appropriate in terms of quantum within an overall portfolio,’ he says.

Glencross says those are ‘sensible things for an IFA to do anyway’ that means an IFA has fulfilled their requirements as far as the FCA is concerned. Although he adds that this may not be enough for professional indemnity insurance providers who ‘seem to be behind the curve in understanding the industry’ meaning advisers may find it hard to get the relevant insurance when advising on alternative investments. Catt says whether advisers are looking at EIS and VCTs they should be doing ‘enhanced reporting’ and making sure their research and due diligence is ‘evidenced so they can show that [the recommendation] is appropriate’. The FCA may not yet perceive due diligence on VCTs as a specific problem and are currently focusing on even more esoteric investment areas. ‘It may be that they don’t perceive a problem in the way that IFAs are approaching these tax-advantaged investment opportunities at the moment,’ says Glencross. ‘If there was a problem then they’d be breathing down your neck. Other areas are of more concern.’ In particular, Glencross says the regulator has been worried about crowdfunding. ‘They’ve had to recognise that they don’t want to be treading too heavily in something that’s the democratisation of funding for small companies,’ he says. ‘They’re far more concerned about other risks and misuse. If they’re not seeing [IFAs use products appropriately], they’ll maintain an appropriate level of scrutiny.’ GBI

GB Investment Magazine · February 2019

HOW VCTS WILL WEATHER

THE BREXIT STORM Small companies are better able to deal with Brexit blows and the industry remains confident of the opportunities on offer

rexit has unsettled investment markets but ‘nimble’ companies that are backed by VCTs are well placed to weather the potential storm.

With political turmoil front and centre of UK investors’ minds, it is no wonder the many investors are holding back until the outcome of Brexit negotiations are known, and whether prime minister Theresa May can even negotiate a deal by 29 March 2019. There has been some concerns that Brexit will make small companies hold off raising money as well as investors holding off investing. VCTs have raised a lot of money and there is a worry they will find it difficult to hunt out enough good quality companies in the timeframe they need to. At our recent Round Table discussion on VCTs, John Glencross, Chief Executive of Calculus Capital, said that Brexit will bring some problems for smaller companies, particularly around staffing as leaving the EU will mean the end of free movement of people.

Despite his concerns about losing talent from the country, Glencross says he is not concerned that VCT managers will not be able to invest the cash they have raised within the time they need to and there are plenty of investment opportunities at present. ‘It’s a very fertile time,’ he says. ‘I’ve lived through many cycles...I think we’re seeing a lot of opportunities, a lot of entrepreneurs are comfortable about raising money. ‘We have an incredible generation coming through and we’re seeing opportunities.’ However, he does add that ‘it concerns me seeing the amount of money raised last year, combined with the fact that the government increased the amount that had to be invested to 80%’. ‘A lot of people tried to get in ahead of those rules,’ says Glencross. ‘I don’t think it’s healthy to just be raising money because you can. I think it will be interesting to see how well it’s applied by some VCTs.’

‘If you look at most of our science-based companies, 60% working in them aren’t UK nationals,’ he said.

VCTs do not want to remain in cash for too long and managers will have to look at what raise targets are to judge what is realistic.

‘So there are concerns about the companies having access to the skills and expertise post-Brexit. There’s another issue for life sciences with regards to the registration and approval of treatment and medicine which may create specific problems.

Madeleine Ingram, Head of Investor Relations and Marketing at Calculus Capital, says ‘it’s a discussion to see how much is sensible to put as a target to raise’ and ‘the concern is about the quality being there’.

Glencross says he does not think ‘Brexit has ever really favoured the smaller growth companies’. David Lovell, Operations Director at Growthinvest, a platform that provides access to tax efficient investments, says the concern for many investors ‘there wasn’t a particular fear about the success of the companies, the main fear was talent, or they weren’t worried at all’.

GB Investment Magazine · February 2019

Glencross says some ‘VCTs are offering a higher valuation to companies in order to put their money to work’. ‘Your in-price has a direct bearing on your out-price,’ he says. He adds that some VCTs ‘have their work cut out to deliver the same level of returns to investors’.

Round Table

There are concerns about finding investment opportunities and there are also worries about the potential to make realisations at the other end. Glencross says Calculus Capital investments are ‘uncorrelated with stock markets’. ‘We’ve lived in unreal times; interest rates have been at negligible levels, but also a large amount of money has been pumped into western economies, that’s now being reversed.’ The US Federal Reserve is taking millions out of the system each month as part of its quantitative tightening and this is creating ‘bottlenecks in some economies’, says Glencross.

without appropriate risk,’ he says. ‘They’re looking more closely at what VCTs are doing.’ Annabel Brodie-Smith, Communications Director at the Association of Investment Companies, says the VCT industry needs to ‘make it very clear all the economic and social benefits [the investments] are bringing to the economy because those investments are creating jobs, so that will benefit everyone’. With productivity the watchword of many developed governments as their economies struggle to boost how productive their workforces are, VCTs are going to be even more important for the economy due to their focus on technology.

‘If we see interest rates rising...and money is taken out of the system, that’s a more challenging environment for stock markets,’ he says.

‘They’re talking about productivity and productivity improvements, it’s not surprising [the government is] trying to make sure that there’s adequate investments going into technology and science as you can scale those businesses without a proportionate increase in cost,’ says Glencross.

‘You’ll see fewer companies going public and you might also see lower exit values than before.’

‘You can’t scale low-risk investments without a comparable increase in costs.’

Glencross says the ‘value of entrepreneurs’ is starting to be recognised and ‘they’re growing in confidence to raise money’.

He says given these factors it was obvious why the Treasury is keen to ‘tell VCT and EIS managers why they should be investing in growth opportunities where there’s capital at risk’.

When it comes to Brexit, he says whether there is a deal or not, ‘we’ll start to see growth’.

Ingram, is positive that the opportunities for VCTs and entrepreneurs will not be dampened by Brexit and ‘small companies are quite nimble and can handle change’. Investors and VCT managers will be hoping there is not a dearth of investee companies after Brexit, especially as the allowable investments for tax-advantaged products has been curtailed, with extra emphasis placed on the need to put money into growth investments, rather than capital-preservation investments.

The government has made it clear what it expects from tax-advantaged investments. Lovell says the government has ‘put a sensible framework in place, the rules have been defined’. ‘The Patient Capital Review outcome has had clear backing for investment in early stage businesses in the UK and they’ve given a good stamp to the frameworks in the EIS world,’ he says. ‘It’s interesting they’re still saying they’ll keep their eye on it.’ GBI

Glencross says it is more apparent that the Treasury is now ‘concerned about value for the taxpayers’ pound’ and justifying the tax reliefs afforded VCTs. ‘They are so intent on ensuring there can be no accusation that tax breaks are going to people

GB Investment Magazine · February 2019

M AGAZINE

GBI OPEN OFFERS The power to invest through GrowthInvest

EIS Open

July 2018

28 June 2019

Amount to be Raised: £20m Minimum Investment: £50,000

Calculus Capital EIS Fund Pioneers of tax efficient investing, Calculus Capital created the UK’s first approved EIS Fund in 1999. Our 19 year track record of investing in growing UK companies assures investors of our ability to make sensible investments capable of delivering excellent returns at every stage of the economic cycle. Calculus has won multiple awards, including the EIS Association’s ‘Fund Manager of the Year’ in February 2017, the fifth time the firm has been awarded the accolade and more recently was awarded Best EIS Investment Manager at the Growth Investor Awards in November 2018. Calculus are recognised as having an incredibly robust investment process and an active portfolio management style - which has led to an impressive track record of successful exits. The Calculus Capital EIS Fund focuses on established companies with growth potential, across a diverse range of sectors. An investor can expect a portfolio of 6-10 companies with the following characteristics: • The ability to achieve our target IRR of 20% • Experienced management teams • Successful sales of proven products or services • Profits or a clear path to profitability • Clear route to exit

T. 020 7493 4940 E. info@calculuscapital.com www.calculuscapital.com

VCT Open

September 2018

Close 30 August 2019

(2019/20 tax year)

Amount to be Raised: £10m Minimum Investment: £5,000

Calculus’ investment strategy is exit led, with a key focus on delivering strong returns to investors. The 18 month investment programme commences after relevant closing date. Calculus value their reputation for client service as much as their investment record, and are focused on building long standing relationships with both clients and advisors. Please get in touch to find out more on 020 7493 4940 or info@calculuscapital.com

Calculus Capital VCT Pioneers of tax efficient investing, Calculus Capital have a strong track record for investing in established, unquoted SMEs. Our experienced investment team and thorough investment process have produced impressive dividend performance and exit returns for investors. By co-investing in selected established companies through both VCT and EIS, we are able to choose larger companies and bigger deals – reducing the risk profile of the investment. The Calculus VCT has the following characteristics: • Targets an annual dividend of 4.5% of NAV • Income tax relief of 30%, tax-free capital gains and dividends • Diversified portfolio, targeting 30 qualifying companies • Share certificates issued 10 days after allotment • Allotments available in both 2018/19 and 2019/20 tax years • Monthly standing order option available • Target 5% discount in respect to share buyback after 2020

T. 020 7493 4940 E. info@calculuscapital.com www.calculuscapital.com

The top up offer will be used to both invest in new companies with growth potential and provide further funding to a number of portfolio companies. Calculus value their reputation for personal service as much as their investment record, and are focused on providing an excellent client experience. Please get in touch to find out more on 020 7493 4940 or info@calculuscapital.com

GB Investment Magazine · February 2019

EIS Open

Evergreen

Amount to be Raised: N/A Minimum Investment: £25,000

T. 01865 860 760 E. info@oxcp.com www.oxcp.com

BPR / IHT Open

Evergreen

Amount to be Raised: N/A Minimum Investment: £25,000

Oxford Capital Growth EIS We will build a portfolio of shares in 12-15 companies for investors over a period of roughly 12-18 months. We invest in early stage technology focused businesses in the UK. We aim to access the best deals, invest early and keep backing the winners. Our current portfolio includes companies in sectors such as fintech, online marketplaces, digital healthcare, AI and machine learning. Recent investee companies include Push Doctor (online health), Moneybox (digital savings), Sn-ap (on demand travel app) and Wrisk (insurtech). Our experienced team works closely with investee companies, typically sitting on the board, helping to accelerate commercial development with the aim of achieving a profitable exit, usually through either a trade sale or a stock market listing. Each portfolio company should be eligible for EIS reliefs, including 30% income tax relief and tax-free gains.

Oxford Capital Estate Planning Service The Oxford Capital Estate Planning Service (OCEPS) can help investors mitigate Inheritance Tax by investing in companies that should qualify for Business Property Relief, subject to the requisite holding period. OCEPS offers investors ‘flexibility and control’ over their investment. Options include Capital Growth and Income. Target returns range from 3% to 5% p.a., and capital can be accessed within 1-6 months through the sale of shares. If an investor’s circumstances change, they can elect to switch to an alternative, more appropriate, investment option. Investors in the Estate Planning Service will acquire shares in unquoted holding companies. These companies will make equity investments in, and loans to, companies which in turn will own and operate revenue-generating assets. Currently the investment strategy is focused on smallscale power generating equipment, property construction and renewable energy assets. Over time, other assets will be added to the portfolio.

T. 01865 860 760 E. info@oxcp.com www.oxcp.com

SEIS Open

Nov 2017

Evergreen

Target Raise: £3m per annum Minimum investment: £10,000

Deepbridge Innovation SEIS The Deepbridge Innovation SEIS represents an opportunity for private investors to participate in a selected portfolio of innovative seed stage innovation companies, taking advantage of the tax benefits available under the Seed Enterprise Investment Scheme. Providing seed investment to emerging technology-focused companies, the Deepbridge Innovation SEIS seeks to fund selected investee companies that possess an exciting new innovative approach to meet the existing and emerging requirements and demands of both corporate and consumer markets. The Deepbridge Investment Team has a proven track record of working with emerging companies to create value for shareholders through a hands-on investment methodology. The Deepbridge Innovation SEIS is a manager fee-free SEIS opportunity at the point of investment for subscriptions received by a financial adviser. Upfront and ongoing manager fees are paid by the Investee Companies, potentially allowing investors to enjoy up to 100% of SEIS tax benefits. Please see costs and fees section in the Information Memorandum for full details.

T. 01244 746000 E. Enquiries @deepbridgecapital.com www.deepbridgecapital.com

The availability of SEIS tax reliefs depends on individual circumstances, may be subject to change in future and depend on underlying companies invested in maintaining their qualifying status. Investment in unquoted companies carries high risks and investors could lose the total value of their investment. Investments in SEIS can be difficult to realise. Past performance is not a reliable indicator of future performance. This financial promotion, directed at investment professionals, has been approved by Enterprise Investment Partners LLP (“EIP”). Deepbridge Advisers Limited (FRN: 609786) is an Appointed Representative of EIP, which is authorised and regulated by the Financial Conduct Authority (FRN: 604439).

GB Investment Magazine February 2019 GB38 Investment Magazine · October· 2018

Open Offers

SEIS Open

January 2016

Evergreen

Target Raise: £3m per annum Minimum Investment: £10,000

The Deepbridge Life Sciences SEIS The Deepbridge Life Sciences SEIS represents an opportunity for private investors to participate in a selected portfolio of early stage life sciences companies, taking advantage of the tax benefits available under the Seed Enterprise Investment Scheme. Providing seed investment to emerging companies operating in the life sciences sector, the Deepbridge Life Sciences SEIS seeks to fund companies with exciting new technologies that aim to satisfy the needs of large and growing markets. The Deepbridge Investment Team has a proven track record of working with emerging companies to create value for shareholders through a hands-on investment methodology. The Deepbridge Life Sciences SEIS is a manager fee-free SEIS opportunity at the point of investment for subscriptions received by a financial adviser. Upfront and ongoing manager fees are paid by the Investee Companies, potentially allowing investors to enjoy up to 100% of SEIS tax benefits. Please see costs and fees section in the Information Memorandum for full details.

T. 01244 746000 E. Enquiries @deepbridgecapital.com www.deepbridgecapital.com

EIS Open

March 2017

Evergreen

Deepbridge Life Sciences EIS

Maximum Raise: Uncapped

The Deepbridge Life Sciences EIS represents an opportunity for private investors to participate in a selected portfolio of healthcare innovation, whilst taking advantage of the tax benefits available under the Enterprise Investment Scheme.

Minimum investment: £10,000

The Deepbridge Life Sciences EIS focuses principally, but not exclusively, on three sectors: • Biopharmaceuticals • Biotechnology • Medical Technology. The Deepbridge Investment Team has a proven track record of working with emerging companies to create value for shareholders through a hands-on investment methodology. The Deepbridge Life Sciences EIS is a manager fee-free EIS opportunity at the point of investment for subscriptions received by a financial adviser. Upfront and ongoing manager fees are paid by the Investee Companies, potentially allowing investors to enjoy up to 100% of EIS tax benefits. Please see costs and fees section in the Information Memorandum for full details.

T. 01244 746000 E. Enquiries @deepbridgecapital.com www.deepbridgecapital.com

The availability of EIS tax reliefs depends on individual circumstances, may be subject to change in future and depend on underlying companies invested in maintaining their qualifying status. Investment in unquoted companies carries high risks and investors could lose the total value of their investment. Investments in EIS can be difficult to realise. Past performance is not a reliable indicator of future performance. This financial promotion, directed at investment professionals, has been approved by Enterprise Investment Partners LLP (“EIP”). Deepbridge Advisers Limited (FRN: 609786) is an Appointed Representative of EIP, which is authorised and regulated by the Financial Conduct Authority (FRN: 604439).

GB Investment Magazine · February 2019

EIS Open

January 2013

Evergreen

Deepbridge - Technology Growth EIS

Amount to be Raised: Uncapped

The Deepbridge Technology Growth EIS represents an opportunity for private investors to participate in a selected portfolio of innovative growth companies, taking advantage of the tax benefits available under the Enterprise Investment

Minimum Investment: £10,000

Scheme. The Deepbridge EIS focusses principally on three sectors: • Energy and resource innovation; • Medical technologies; • Business enterprise and other high growth IT-based technologies. The Deepbridge Investment Team has a proven track record of working with emerging companies to create value for shareholders through a hands-on investment methodology. The Deepbridge Technology Growth EIS is a manager fee-free EIS opportunity at the point of investment for subscriptions received by a financial adviser. Upfront and ongoing manager fees are paid by the Investee Companies, potentially allowing investors to enjoy up to 100% of EIS tax benefits. Please see costs and fees section in the Information Memorandum for full details.

T. 01244 746000 E. Enquiries @deepbridgecapital.com www.deepbridgecapital.com

EIS Open

Now

SEIS Close

N/A

Amount to be Raised: £5m Minimum Investment: £15,000

Oxford Technology Combined SEIS and EIS Fund - “The Start-up Fund” Oxford Technology invests in high risk, high reward technology start-ups, in general within an hour’s drive of Oxford, and has been doing this since 1983. The latest fund, OT(S)EIS, made its first investment in 2012. By 31st December 2018, OT(S)EIS had completed 105 investments in 34 companies. The figures for the fund as a whole since its inception are as follows:

T. 01865 784466 E. info@oxfordtechnology.com www.oxfordtechnology.com

EIS Open

Evergreen

SEIS Close

Evergreen

Amount to be Raised: N/A Minimum Investment: £5,000

Gross amount invested by OT(S)EIS:

£4.94m

Cash back to investors via tax refunds (1):

£1.98m

Net cost of these investments after tax reliefs (2):

£2.96m

Fair value (3):

£10.52m

Tax Free gain (on paper only so far):

£7.56m

OT(S)EIS remains open for investment at any time. We average about one or two new investmens per quarter, and investors in the fund receive their pro-rata share of these. The latest quarterly report, with a page of information on each investment is downloadable from www.oxfordtechnology.com.

GrowthInvest - The Tax Efficient Platform for Advisers GrowthInvest is a unique, independent platform which provides access to tax efficient investments to a growing network of UK financial advisers, wealth managers and investors. Originally founded by financial advisers in 2012 as the Seed EIS Platform, we rebranded as GrowthInvest in October 2016 to better reflect the wider range of products and services available: We permit investment into a range of single company offers, as well as Managed EIS Portfolio Services and funds, giving clients a number of different investment options. • We offer a simplified asset transfer process which allows advisers to place all of their clients’ tax efficient investments onto the platform. • We provide intuitive online reporting tools, allowing advisers to monitor, analyse, and provide consolidated performance updates and quarterly reports to their clients. • All investable companies go through one of 3 defined due diligence tiers, giving added peaceof-mind to the adviser. • A single, secure online environment for all clients to review and build their tax efficient investment portfolios.

T. 020 7071 3945 E. enquiries@growthinvest.com www.growthinvest.com

We’ve placed the adviser at the heart of everything we do, making it straightforward for advisers to improve the service they offer to their clients in the tax efficient investment arena. Please visit us at growthinvest.com for more details about our current open investment opportunities.

GB Investment Magazine February 2019 GB40 Investment Magazine · October· 2018

Open Offers

EIS Open

01.10.2018

Evergreen

Amount to be Raised: £20m Minimum Investment: £10,000

Great Point Ventures EIS Great Point Ventures EIS (“Fund”) presents UK tax payers with the opportunity to invest in EIS qualifying businesses operating in the booming UK creative industries. The Fund aims to seek out high growth companies and has a broad sub-sector approach designed to offer investors a degree of diversification across content creation, content distribution & marketing, production facilities & services and new media & technology. Investors will have a minimum of four companies in their portfolio and all companies must have received Advance Assurance from HMRC prior to funds being deployed. Why Great Point Ventures EIS?

Unrivalled sector experience - the Great Point team have a unique blend of financial, operational, commercial and investment management expertise specific to the media sector T. 0203 873 0028 E. dperkins@greatpointmedia.com www.greatpointmedia.com

Strong opportunity pipeline - significant proprietary deal flow and a number of “first look” deals in place with industry players and leading educational institutions Alignment of interest - the Fund offers a competitive fee structure ensuring Great Point’s interests are aligned with those of the investor Growth focussed - the Fund’s target return is two times gross investment (excluding tax reliefs, inclusive of all costs and fees) Tax efficient - for every £1 subscribed at least 97p will be invested and therefore attract EIS tax reliefs (subject to personal circumstance)

EIS

SEIS

Open

April 2017

Evergreen

Amount to be Raised:

Up to £25,000,000

Minimum Investment: £10,000

T. 020 7071 3945 E. enquiries@growthinvest.com www.growthinvest.com

EIS Open

01.09.2017

Evergreen

Amount to be Raised: £40m Minimum Investment: £15,000

GrowthInvest Portfolio Service A discretionary investment management service which seeks to leverage the experience and expertise of the GrowthInvest investment team to select a diversified portfolio of some of the most promising companies that have passed through GrowthInvest due diligence process. GrowthInvest is an independent platform, which provides access to tax efficient investments to a growing network of UK financial advisers, wealth managers and investors. The platform aims to bring the advantages of early stage investing to a wider audience of investors and advisers, who are able to benefit from the potentially higher returns these companies can offer and tax efficiency via government approved schemes, such as SEIS and EIS. From our experience working with advisers on the Platform, the Fund has been designed to consist of three sub-funds, each with a separate investment policy. The first will target Investee Companies which qualify for SEIS Reliefs only. The second will target Investee Companies which qualify for EIS Reliefs only and the third will be a mixed investment policy which will target Investee Companies which qualify for SEIS Reliefs and / or EIS Reliefs. You will be able to choose how much of your subscription to allocate to each of these three sub-funds. The Fund is aiming to exit investments after three to seven years.

Oxford Technology EIS Fund - “The Development Fund” Oxford Technology has been investing in technology start-ups since 1983. The Oxford Technology EIS Fund will aim to provide each investor a diversified portfolio of 5 - 10 EIS investments in high risk, but high potential early stage technology companies near Oxford.

T. 020 7222 3475 E. info@oxfordtechnology.com www.oxfordtechnology.com

GB Investment Magazine · February 2019

EIS

SEIS

Open

Now

Multiple

Amount to be Raised: Evergreen

Minimum Investment: £10,000

T. +44 20 3858 0847 E. info@worthcapital.uk worthcapital.uk

EIS

SEIS

Open

Now

31.03.19

Amount to be Raised: £3.5m Minimum Investment: £20,000

Start-Up Series Fund The Start-Up Series Fund is an evergreen EIS & SEIS service. Managed as an Alternative Investment Fund by Amersham Investment Management Limited, authorised and regulated by the FCA. The service is designed for eligible subscribers to be invested in selected winners of the Start-Up Series, a monthly competition organised by Worth Capital Limited and promoted by startsups.co.uk. The Fund invests in qualifying B2C or B2B companies with innovative products or services that can create new consumer behaviours in growth markets, with teams that demonstrate compelling marketing & communication skills and with a clear credible route to exit. -

EIS & SEIS investments - choose EIS, SEIS or both

Businesses selected by real world, commercial entrepreneurs with deep brand, marketing, retail & innovation expertise – worth capital

A unique approach to UK EIS & SEIS fund investing – a monthly competition, around one hundred businesses considered each month

Ongoing oversight from experienced investor directors - skilled in helping accelerate growth & reducing risk

Investments in ‘mini-portfolios’ of typically 3 or 4 businesses

Investments qualifying for attractive EIS & SEIS tax reliefs

Any investment in the Start-Up Series Fund places your capital at risk of total loss and will not be readily realisable. Tax treatment depends on individual circumstances and is subject to change. We recommend you take professional advice before investing.

Iron Box Capital: Alive in the Morning Ltd. Alive in the Morning Ltd. will develop, produce, finance and market a slate of unique, commercial films in the horror and thriller/horror genres. Horror is one of the most popular and pro table genres in a worldwide Filmed entertainment market that will be worth a forecasted US$104.62 billion a year by 2019. It is consistently commercially successful as people love to watch movies to be scared, whether at the cinema or at home. Horror is also one of the most international genres, as fear is universal, transcending cultural and geographical boundaries. Horror Films additionally can be made on low budgets and do not need star names to attract audiences, offering the potential for a significant return-on-investment.

THE

MORNInG

Advance Assurance has been given. T. 07528616752 E. raimund@ironboxcapital.com www.ironboxcapital.com

EIS Open

Evergreen

Amount to be Raised: £15m+ Minimum Investment: £25,000

T. 020 3327 4861 E. EIS@hambroperks.com www.hambroperks.com

Hambro Perks Co-Investment Fund Hambro Perks helps outstanding Founders build world-changing businesses. The provision of permanent, patient capital from our own balance sheet means we are completely aligned with the long term goals and interests of the entrepreneurs and investee companies that we support. We aim to take early risk in businesses, investing where we can add significant value through applying and sharing the expertise our team has built over many decades’ combined experience of founding, building, internationalising and exiting companies. We believe we are the destination of choice for the very best entrepreneurs, and they actively choose us to support them as they build fast growth tech-enabled businesses. Our main areas of focus are education technology, digital health, insurance technology, digital media and fintech. The Hambro Perks Co-Investment Fund enables individuals to co-invest alongside and on a fully aligned basis with Hambro Perks, thereby benefiting from this extraordinary access and proprietary dealflow while utilising EIS reliefs. Please get in touch for more information.

GB Investment Magazine February 2019 GB42 Investment Magazine · October· 2018

Open Offers

SEIS Close

Open

Evergreen – multiple close dates

Now

Amount to be Raised: £750K Minimum Investment: £10,000

Iron Box Film & TV seis channel in the Amersham seis fund The British Film Industry is growing, and is forecast to grow for years to come. This is fuelled by the global demand for films, through multi on-line channels, including Netflix and Amazon Prime. Iron Box’s team of experts has specialist knowledge across development, finance, production and marketing of film & television projects. As a company they are well positioned to capitalise on this growth market. The aim is to focus on the most profitable genres, where there is a clear target audience, and in using proven teams of people that have a track record of making profitable Film & TV shows. The Iron Box Film & TV SEIS Channel has been designed for UK tax payers who prefer to invest in a managed portfolio of independent filmed entertainment projects, whether for traditional films or television. There are likely to be around 4 films in each portfolio. The fund will finance projects that are commercial, with strong audience appeal, and suit the international marketplace.

THE

MORNInG T. 020 3011 5096 E. info@symvancapital.com www.symvancapital.com

BPR Open

June 2005

Evergreen

Amount to be Raised: Unlimited

Minimum Investment: £25,000

The companies will be SEIS eligible.

Octopus AIM Inheritance Tax Service Since 2005, the Octopus AIM Inheritance Tax Service has offered a fast and flexible solution to inheritance tax planning, while providing the potential for significant capital growth through investment into a portfolio of 20-30 companies listed on the Alternative Investment Market (AIM). As we only select companies which meet the requirements for Business Property Relief, the shares should become exempt from inheritance tax after just two years, provided they are still held on death. Our highly experienced Smaller Companies team manages £1.5 billion on behalf of 11,500 investors across the service. Portfolio companies are chosen after detailed research, which involves spending time with a company’s management team, evaluating its competitors and assessing its financial strength. Holdings are monitored on a day-to-day basis, with the team making investment decisions. The Octopus AIM Inheritance Tax Service is also available within an ISA wrapper. The value of an investment, and any income from it, can fall as well as rise and you may not get back the full amount invested. Tax treatment depends on individual circumstances and may change in the future. Tax relief depends on portfolio companies maintaining their BPR-qualifying status.

T. 0800 316 2295 E. clientrelations@octopusinvestments.com

octopusinvestments.com

The shares of smaller companies could fall or rise in value more than other shares listed on the main market of the London Stock Exchange. They may also be harder to sell. Issued by Octopus Investments Limited, which is authorised and regulated by the Financial Conduct Authority. Registered office: 33 Holborn, London EC1N 2HT. Registered in England and Wales No. 03942880. We record telephone calls. Issued: September 2018. CAM07427-1809.

GB Investment Magazine · February 2019

VCT Open

13.09.2018

12.09.2019

Amount to be Raised: £120 million

Minimum Investment: £3,000

Octopus Titan VCT Octopus Titan VCT invests in tech-enabled businesses with high growth potential. It’s managed by Octopus Ventures, one of Europe’s most experienced venture capital investment teams with over 150 years combined experience. Octopus Titan VCT currently has a portfolio of around 65 early stage companies operating in a diverse range of sectors. Over the last decade we’ve backed some of the UK’s most successful entrepreneurs, including the founders of Zoopla Property Group, Secret Escapes and graze.com just to name a few. It targets a tax-free dividend of 5p per annum, plus special dividends if portfolio companies are sold at a significant profit. Investors can also claim 30% upfront income tax relief on the initial investment up to £200,000 and any capital growth is tax-free. The value of an investment, and any income from it, can fall as well as rise and you may not get back the full amount invested. Tax reliefs available depend on individual circumstances and may change in the future. Tax reliefs also depend on the VCT maintaining its VCT-qualifying status. VCT shares could fall or rise in value more than other shares listed on the main market of the London Stock Exchange. They may also be harder to sell.

T. 0800 316 2295 E. clientrelations@octopusinvestments.com

octopusinvestments.com

EIS Open

Evergreen

Amount to be Raised: Evergreen Minimum Investment: £15,000

Please be aware that this advertisement is not a prospectus, and investors should only subscribe for shares based on information in the prospectus or Key Information Document (KID), which can be obtained from octopusinvestments.com/titan. Issued by Octopus Investments Limited, which is authorised and regulated by the Financial Conduct Authority. Registered office: 33 Holborn, London EC1N 2HT. Registered in England and Wales No. 03942880. We record telephone calls. Issued: September 2018. CAM07411-1809

Downing Ventures EIS Downing Ventures EIS invests in high risk, high potential return investment opportunities with a principal focus on early-stage UK technology companies, while also providing access to attractive EIS tax reliefs. The team invests across a variety of sectors, with focus on enterprise SaaS, large consumer markets, healthcare tech and special situations tech. Each of these young, growing businesses will be high risk with a significant chance of failure. However, the following factors should help to manage risk: • Diversification: subscriptions estimated to be spread across approximately 10 - 15 growth businesses.

T. 020 7630 3319 E. sales@downing.co.uk www.downing.co.uk

IHT Open

Evergreen

BPR Close

Evergreen

Amount to be Raised: Evergreen Minimum Investment: £25,000

• Due diligence: a high number of opportunities will be investigated before each investment is made. In 2017, the team reviewed around 100 companies a month. It’s anticipated that investors will be given the opportunity to exit their investments between four and eight years from subscription.

Downing Estate Planning Service DEPS aims to preserve investors’ capital by focusing on two sectors: businesses trading from freehold premises and/or energy infrastructure businesses. We believe these are lower risk than other tax-efficient sectors. DEPS is designed to offer full IHT relief on subscriptions after two years, by investing in a portfolio of businesses that qualify for business relief. The service has been designed with the following key features: • To target capital growth of 4% per annum over the medium term (this is a target and is not guaranteed).

T. 020 7630 3319 E. sales@downing.co.uk www.downing.co.uk

• Create an option to receive distributions (paid quarterly, six-monthly or annually at a level set by the investor). • Offer monthly access to capital with no penalties on exit (subject to liquidity). Additionally, we offer two insurance policies for this service: • Downside protection cover (at no additional cost): insurance policy that covers the first two years (before the investment obtains IHT relief). The policy covers 20% of any net loss in value on death under the ages of 90 years. • Life cover (optional – at an additional cost): mitigates the effect of IHT for the first two years before IHT relief begins. It covers 40% of the original gross investment (which would be payable to HMRC) upon death within the first two years.

GB Investment Magazine February 2019 GB44 Investment Magazine · October· 2018

Open Offers

IHT Open

March 2012

Evergreen

Amount to be Raised: Evergreen Minimum Investment:

£100,000

Downing AIM Estate Planning Service (DAEPS) DAEPS enables investors to own a portfolio of AIM-listed shares and is designed to offer full IHT relief on subscriptions after two years, by investing in companies that qualify for business relief. We aim to manage risk by spreading funds across at least 20 companies from different sectors on the AIM market. Other key features: • Downside protection cover (at no additional cost): insurance policy that covers the first two years (before the investment obtains IHT relief). The policy covers 20% of any net loss in value on death under the ages of 90 years.

T. 020 7630 3319 E. sales@downing.co.uk www.downing.co.uk

IHT Open

March 2014

Open ended

Amount to be Raised: Evergreen Minimum Investment:

£100,000

• Ownership and control: allow investors to retain full ownership of the investments. • Capital growth: companies will be selected based on analysis on operational business, longevity of earning and alignment between management and equity shareholders. • Access: enable investors to withdraw capital from their portfolio at any time, subject to liquidity and 10 days’ notice.

Downing AIM ISA (DISA) DISA gives investors the opportunity to invest in a portfolio of at least 20 AIM-quoted companies, combining IHT relief (after two years) with ISA tax benefits, by investing in companies that qualify for business relief. We aim to manage risk by spreading funds across at least 20 companies from different sectors. Other key features: • Downside protection cover (at no additional cost): insurance policy that covers the first two years (before the investment obtains IHT relief). The policy covers 20% of any net loss in value on death under the ages of 90 years.

T. 020 7630 3319 E. sales@downing.co.uk www.downing.co.uk

• Ownership and control: allows investors to retain full ownership of the investments. • Capital growth: generate capital growth from the portfolio of investments. Companies are selected based on analysis of their operational business, longevity of earnings and alignment between management and equity shareholders. • Access: to enable investors to withdraw capital from their portfolio at any time, subject to liquidity.

GB Investment Magazine · February 2019

EIS Open

Now

Evergreen

Amount to be Raised: £10m Minimum Investment: £25,000

Nexus Investments’ Scale-Up Fund The Nexus Investments’ Scale-Up Fund provides each investor a diversified portfolio of 8 – 10+ EIS investments in high risk, but high potential early-stage entrepreneur-led businesses. These businesses will be in one or more of the data, digital, education and health sectors, the areas of greatest potential for UK companies to make an impact in the coming 10-20 years. As well as the Fund, Nexus Investments serves a large and active business angel co-investor group. The Fund Manager, Nexus Investments, has been arranging, advising and co-investing in these areas since 2014, having developed a promising track record and a distinctive investment model. Returns are expected to take the form of outright sales of portfolio companies, with an average holding period of 5 - 8 years.

T. 0207 104 5595 E. info@nexusgroup.co.uk www.scaleupfund.co.uk

EIS Open

Now

Evergreen

EMVC Evergreen EIS

Maximum Raise:

Targeting £2-5m p.a

EMV Capital Ltd (EMVC), a London-based investor supporting the growth of high-potential technology SMEs with core technological innovation, is serving as Investment Adviser to the EMVC Evergreen EIS Fund, which is managed by Sapphire Capital Partners, an award-winning specialist fund manager focused on EIS and SEIS schemes.

Minimum investment: £10,000

The EMVC Evergreen EIS Fund strategy is built on three key pillars: 1. Real businesses, real innovation, real value The Fund will only invest in B2B businesses built on core technological innovation, generating tangible economic value for the industrial sectors in the real economy. 2. Strong corporate links and relationships The Fund will seek to leverage EMVC’s network of corporate relationships both to validate the opportunities and to accelerate the growth of the Investee Companies. 3. Follow on capital and co-investment The Fund will benefit from EMVC’s access to follow-on funding, such as through EMVC’s contacts with institutional investors, corporate venturing teams and investment vehicles.

T. +44 (0) 203 761 6138 E. investors@emvcapital.com www.emvcapital.com/eis_fund

Focused on Seed and Series A/B EIS-eligible investment opportunities the Fund will look to invest in companies within the following technology areas: Industry Sectors: Industrial High-Tech; Energy; Resource Efficiency & Circular Economy; Smart Cities & Connected Transport Technology Horizontals: Artificial Intelligence and Robotics; Internet of Things; Electronics; Advanced Engineering; Industrial Chemistry; B2B tech enterprise software; Environmental technology

GB Investment Magazine February 2019 GB46 Investment Magazine · October· 2018

Open Offers

BPR Open

03.09.2018

Open ended

Amount to be Raised: Open ended

Minimum Investment: £25,000

Guinness Sustainable Infrastructure Service Subscriptions made to the The Guinness Sustainable Infrastructure Service will be invested into shares of one or more companies that qualify for Business Relief with no initial fee for advised clients. Investee companies will own and operate Sustainable Energy projects, such as roof mounted solar. These projects have strong visibility of revenues that are usually index-linked which helps to achieve capital preservation. Target Return to investors is in excess of 5% p.a. net of fees which is aided by fixed capital costs, low operating costs and predictable revenue streams with low annual variability.

T. 020 7222 3475 E. shane.gallwey@guinnessfunds.com www.guinnessfunds.com/iht

BPR Open

January 2018

Evergreen

Amount to be Raised: Open ended

Minimum Investment: £40,000 (£20,000 for additional investment)

Inflation-linked long term (20 year plus) Power Purchase Agreements are able to benefit from government subsidies where available. Clients are able to benefit from access to their capital by redemption of shares on a regular or ad hoc basis.

Guinness Best of AIM Service The Guinness Best of AIM Service is a discretionary managed service investing in AIM-quoted companies that qualify for Business Relief with the potential for capital growth. The rigorous quantitative portfolio selection approach has been adapted from the process used in Guinness Asset Management’s successful range of global equity funds. The detailed screening process is underpinned by the quality, value and conviction of each eligible AIMquoted stock. The service consists of a high-conviction concentrated portfolio of 20 companies across a range of sectors that have persistently generated a real return on invested capital. We target a low portfolio turnover to minimise dealing costs whilst maintaining a competitive fee structure.

T. 020 7222 3475 E. shane.gallwey@guinnessfunds.com www.guinnessfunds.com/iht

FUND Open

January 2018

n/a

Amount to be Raised:

Authorised up to £50m

Minimum Investment:

No minimum, subject to ongoing placing program

Clients are able to access their capital, without exit penalties, enabling them to retain control of their assets.

Sure Ventures PLC Listed investment fund Sure Ventures PLC is an entrepreneur-led Venture Capital Fund, listed on the London Stock Exchange (Ticker: SURE). It targets high growth tech companies where there is a proven concept and revenue generation, in the following sectors: - Augmented Reality (AR) & Virtual Reality (VR) - Internet of Things (IoT) - Emerging areas of Fintech (e.g. Blockchain/AI) With a highly experienced, sector-specialist investment team and a rigorous origination and selection process, it offers investors access to early stage technology companies. FUND OVERVIEW - Focuses on areas of significant growth potential over the next 5-10 years (AR/VR in particular is expected to be a $108 billion market by 2022) - Target portfolio of 30 diverse high growth companies - Target of 30% Gross IRR return across portfolio

T. 020 3931 7000 E. info@sureventuresplc.com www.sureventuresplc.com

- May pay dividends to maintain status as an investment trust and/or purchase its own shares - Over 10 years Venture Capital Investment Management experience - Backed by one of London’s leading specialist investment managers, Shard Capital, which manages and advises over £1 billion.

GB Investment Magazine · February 2019

EIS Open

Close Evergreen with quarterly tranche closures

19.09.2016

Amount

Raised:

£50m

Minimum Investment: £20,000

Guinness EIS The Guinness EIS seeks to invest in at least five investee companies to create a portfolio of investments across a range of sectors. Characteristics favoured by the investment management team are asfollows: • Businesses with experienced management teams - Many entrepreneurs are serial entrepreneurs. They have successfully builtand sold companies and we look at their sector specific successes when they are looking for investment in new/ existing ventures • Businesses with good visibility on future growth - Maturing companies and businesses with clearly defined growth paths • Businesses with expanding working capital requirements - Successful businesses often require additional funds to expand their working capital to fund stock and debtor growth.

T. 020 7222 3475 E. shane.gallwey@guinnessfunds.com www.guinnessfunds.com/eis

EIS Open

03.09.2018 Amount

06.04.2019 be

Raised:

£10m

Minimum Investment: £20,000

T. 020 7222 3475 E. shane.gallwey@guinnessfunds.com www.guinnessfunds.com/eis

EIS/SEIS Open Now

Close Evergreen with quarterly close

Amount to be Raised: £10m Target

Minimum Investment: £25,000

The Guinness EIS is an evergreen service with tranche closures at the end of each quarter. All subscriptions received in the current tranche will be invested in the 2018/19 tax year.

Guinness AIM EIS 2019 The Guinness AIM EIS seeks to invest in at least 10 investee companies to create a portfolio of investments across a range of sectors. It targets AIM quoted companies withe the flexibility to invest up to 20% in the NEX growth market and pre-IPO. The AIM EIS closes annually on 6th April for investment in the subsequent 12 months in newly issued AIM stocks that have EIS Advance Assurance in place and targets a return of £1.30 per £1.00 invested net of all fees. Subscriptions received by 6th April 2019 will be invested in the 2019/20 tax year which will allow for carry back of income tax relief to 2018/19. The Guinness AIM EIS is an HMRC approved fund so that investors receive one EIS 5 certificate for all holdings once the portfolio is invested. The AIM market is relatively liquid and provides a natural exit route with the intention to exit shares held soon after the EIS 3 year holding period. For this service, Guinness will defer all fees until exit, which maximises the amount on which investors can claim EIS tax reliefs.

o2h Ventures Therapeutics Fund o2h Ventures Limited has launched the first fund in the UK solely focused on early stage biotech therapeutic and related AI opportunities in the UK. The geographic scope shall be UK wide but will target the growing Cambridge biotech cluster. The fund is headquartered in the o2h SciTech Park, Cambridge, where it can provide the incubation and support as part of a community to the companies it has invested in to help them achieve a critical value inflexion point. The team at o2h have access to some of the most exciting ideas through its live grass roots working relationships fostered with entrepreneurs and scientists over many years. A shift in focus of the large pharmaceutical companies from developing innovation in-house to acquiring innovation externally increased demand for the best science providing earlier exit options. The fund is structured to be S/EIS compliant providing generous income, inheritance and capital gains tax breaks for UK tax payers. We plan to build a portfolio of 5-12 unquoted per investor. Investors may download the Information Memorandum at www.o2h.com/ventures.

E. invest@o2h.com www.o2h.com/ventures

GB Investment Magazine February 2019 GB48 Investment Magazine · October· 2018

Eight Members Club London presents two venues in the heart of the city. The clubs offer members a wonderful space in which to both work and of course relax while taking advantage of our wonderful restaurant and bars, with an amazing event space, pool table, cinema and over 10 beautifully appointed meeting rooms. To discover more go to www.eightclub.co.uk.

EIS

SEIS

Open

Evergreen: Next close 27th March 2019

May 2018

Amount to be Raised: £5m Minimum Investment: £10,000

Jenson SEIS & EIS Fund 2018-19 Applying a very structured sector agnostic investment approach, the Fund targets exciting, innovative and disruptive technologies which qualify for SEIS investments, where we typically invest the full allowable amount of £150,000 per company. These investee companies are then nurtured via the Investee support programme, which provides financial and operational assistance to enhance returns, a key differentiator between Jenson and other SEIS and EIS providers. The EIS element of the fund is used to provide follow-on funding to fully exploit commercialisation of a proven business model. Specifically, the EIS fund will concentrate on the best of the Funds existing portfolio but will always be benchmarked relative to new external company opportunities. Having access to an extensive and existing SEIS portfolio enables follow on funding at a fair price. Jenson Funding Partners has been investing since 2012 and has made just under 100 investments. To date the SEIS has invested circa £12 million and the EIS, combined with the syndicated investors, has invested over £5 million and raised over £5million of debt facilities.

T. 020 7788 7539 E. seis@jensonsolutions.com www.jensonfundingpartners.com

EIS

Open

January 2015

Evergreen

Amount to be Raised: Unlimited

The combined SEIS and EIS structure enables an individual to choose whether to invest in earlier start-up companies within SEIS or later stage companies under EIS, invest solely via SEIS or EIS or split funds across both. The 1st tranche for 2018/19 has closed and deployment commenced, the 2nd tranche will close on 27th March with a planned deployment within this tax year.

CHF Enterprises CHF Enterprises Limited presents an exciting opportunity for UK tax payers to invest in SEIS and EIS qualifying Family Entertainment via CHF’s Investee Companies, whilst benefiting from risk mitigation through considerable investor Tax Relief and government backed Tax Credits. A 40 Year Global Success Story: The CHF creative team can trace its history to UK’s Cosgrove Hall producing household names including Danger Mouse, Wind in the Willows, Noddy, Postman Pat, Roary the Racing Car, Count Ducula… winning 9 BAFTAs and 2 Emmys. The CHF Media Fund was set up in 2015 to offer the opportunity to invest in the new slate of CHF content. Why the CHF Media Fund? • Proven Track Record and award winning team with 250+ years collective industry experience with time also spent at Disney, Henson, Dreamworks and more • Low charges and market leading RIY • 3-5 year Exit Strategy from each show’s launch • Target Return 3 times net investment with unlimited upside and no cap

T. +44 (0)117 214 1149 E. ninacarr@chfmedia.com www.chfenterprises.co.uk

SITR Open

Feb 2016

Evergreen

(with roughly quarterly closes)

Amount to be Raised: £5m Minimum Investment: £20,000

• Fortnightly Deployments with EIS 3’s issued at earliest opportunity • Unique Multiple Revenue Streams from worldwide broadcast and online sales plus licensing and merchandising • Government Animation Tax Credit benefits should apply to all UK produced CHF shows

Resonance Bristol and West Midlands SITR Funds The Resonance Bristol SITR Fund (a sub-fund of the Resonance SITR Fund), is one of the first investment funds in the country to benefit from Social Investment Tax Relief (SITR). The Fund enables investors to build a portfolio of investments with the potential for attractive returns and tax relief benefits, whilst also helping to dismantle poverty in and around the City of Bristol through investing in the growth of high impact, mission-driven social enterprises. Based on the success of the Resonance Bristol SITR Fund, Resonance has now launched its second SITR Fund in the West Midlands (the Resonance West Midlands SITR Fund), which is now live and open for investment. SITR offers similar tax reliefs to those available through the Enterprise Investment Scheme (EIS), including a 30% income tax relief. The key innovation is that SITR is available on debt, as well as equity. This means that debt focused SITR Funds can offer the flexible, affordable loan capital that social enterprises require to grow their businesses and social impact, whilst also offering investors a more predictable income profile and exit route compared to equity based Funds.

T. 07718 425 306 E. grace.england@resonance.ltd.uk www.resonance.ltd.uk

Resonance has over 16 years of experience in arranging investment into social enterprises, and now has over £160m under management through eight social impact investment Funds. These funds deliver financial return as well as targeted social impact in a range of areas – from tackling homelessness to health inequalities.

GB Investment Magazine · February 2019

EXCELLENT REASONS TO INVEST IN FILM For your free copy call 020 7628 7857 or email info@ironboxcapital.com

Serious Investment Serious Entertainment www.ironboxcapital.com

THE GROWTHINVEST PORTFOLIO SERVICE.

OPEN FOR BUSINESS.

The GrowthInvest Portfolio Service allows Advisers to introduce their clients to the best of our SEIS and EIS qualifying investment opportunities in a single discretionary managed fund. If you or your clients are interested in a diversified portfolio of tax-efficient investments,

then contact us to find out more. We are helping UK small businesses to realise their full potential, whilst giving Advisers the tools to introduce their clients to this exciting investment category. For more information contact us now at growthinvest.com

MAKE IT YOUR BUSINESS

EISA Celebrating 25 Years | GBI 13 | Feb 2019

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