Behind VCTs | GBI 7 | February 2018

FOR PROFESSIONAL INVESTMENT SPECIALISTS

GETTING BEHIND VC T S I N 2018

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CONTENTS

CHAPTER • 1 Editor’s Welcome

Michael Wilson, Editor In Chief

News

A round up of industry news

CHAPTER • 2 The New Kids on the Block

An investment showcase bringing you the newest offerings from the sector

The Exiteers

Bringing you news of successful exits in the sector

Film Club

Training the lens on investments with movie star qualities

Getting Behind VCTs in 2018

Nick Britton, AIC Head of Training, explains why it’s a good time for advisers to look at alternative investing

2018: Presenting Opportunities

Darius McDermott, Managing Director of Chelsea Financial Services looks ahead to the opportunities for alternative investing in 2018

for Alternative Investment

‘Knowledge Intensive’ EIS: is it all lab coats and test tubes

Will Laws, Senior Marketing and Communications Manager at Oxford Capital, outlines what the government means by ‘knowledge intensive’ companies

CHAPTER • 3 Open Offers

Our monthly listing of what’s currently available for subscription

GBI Magazine is published by IFA Magazine Publications Ltd, Arcade Chambers, 8 Kings Road, Bristol BS8 4AB

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Telephone: +44 (0) 1179 089686 Editor-in-Chief: Michael Wilson editor@ifamagazine.com City Editor: Neil Martin neil.martin@ifamagazine.com

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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.

With over 200 years of combined experience of sector-focused investing in growth businesses, Deepbridge works with clients to design innovative products, inducing direct investment in technology and life sciences innovation as well as asset-backed renewable energy projects.

Deepbridge partners with experienced management teams to help the underlying investee companies realise their potential with the target of building successful leading-edge businesses.

Everything Deepbridge does is underpinned by commercial experience in the sectors in which they operate and a culture of professional excellence and integrity.

Deepbridge Technology Growth EIS*

Deepbridge Life Sciences EIS*

Deepbridge Inheritance Tax Service*

Invests in technology companies with the potential for significant capital growth. Offering a diversified approach across energy and resource innovation, medical technology and specialist IT solutions sectors.

Invests in a portfolio of healthcare innovations, targeting significant capital growth, operating in the bioscience, pharmaceutical and medical technology industries.

The Deepbridge Inheritance Tax Service is a discretionary investment management service that invests in asset-backed renewable energy opportunities, targeting a 6% yield p.a. after the second year.

Deepbridge Sci-Tech Daresbury SEIS*

Deepbridge Life Sciences SEIS*

Early-stage investment in emerging technology companies based at the renowned science and innovation campus at Sci-Tech Daresbury.

Access to a diversified portfolio of innovative and disruptive early stage companies operating in the bioscience, pharmaceutical, medical technology and healthcare industries.

01244 746000 www.deepbridgecapital.com Deepbridge House, Honeycomb East, Chester Business Park, Chester, CH4 9QN Deepbridge Advisers Limited is an appointed representative of Sapia Partners LLP (‘Sapia’), a firm authorised and regulated by the Financial Conduct Authority (the FCA), with FCA registration number 550103. Deepbridge Advisers Limited registered office is at 5th floor, 55 King Street, Manchester M2 4LQ.

* Risk warning – Generally the underlying investments of these propositions are likely to be both illiquid and high risk, not suitable for all investors and investors should not consider investing unless they can afford the full loss of their investment. As EIS / SEIS investments are often illiquid there is likely to be limited information as to their value. This document is a financial promotion for the purposes of section 21 of the Financial Services and Markets Act 2000 and has been approved by Sapia Partners LLP. Interested Investors should seek independent advice before considering investing. This document does not constitute financial, tax or investment advice.

Applications are only accepted on the basis of suitability and qualification criteria. Please refer to the full disclaimer and risk section in the respective Information Memorandum for further details.

140986233/02

“Deepbridge is in the vanguard of EIS Managers, the personnel are seasoned and, in some cases, eminent, bringing cross-sector expertise in technology and private equity.” ALLENBRIDGE LTD: TAX SHELTER REPORT ISSUE 250

FOGGY FEBRUARY No question about it, this is shaping up to be a great year for alternative investments

For investors, the doubling of allowable investment to £2 million from 6 April opens up the opportunity to reclaim a full £600,000 in upfront tax concessions; and for investee companies, the ability to take in more investment comes as a proper confirmation of the Government’s commitment to enterprise.

It’s what the sector has been needing for years.

Firm statistics for EIS investment were still rather scarce at the time of writing – and indeed, we wouldn’t expect to see the Budget’s liberalisation measures making a specific impact this side of April, for obvious reasons - but it’s already clear that the findings of the Patient Capital Review have found a broadly warm welcome.

So have the changes to VCTs, which have already seen a massive boost to demand. As the AIC’s Nick Britton says in this month’s article, VCT sales during the first eight months of this tax year were as high as in the entire tax year to April 2016. Octopus Investments said in mid-January that its Titan VCT had reached its subscription target in just four months, and that it was adding another £80 million of “over allotment facility”, taking the overall fund size to an eventual £600 million.

The situation for VCTs is a little clearer, fortunately.

Funds have until April 2019 to ensure that 80% of their investments are invested in qualifying companies within three years (up from 70%); and they will not be allowed to make soft loans to investee companies.

As Britton says, there’s an impression going on here that the Government wants VCT managers to invest faster than they used to – and in riskier companies, too, because that’s the government’s overall aim, of course. That’s something that may bother managers, and may even make them reluctant to undertake new issues; but a corresponding pressure would then fall on advisers to respond quickly to new offers as they came along.

Is that good? Not entirely. Can the Government do something about clearing the fog? Absolutely.

Michael Wilson, Editor in Chief

At the same time, Chancellor Philip Hammond has doubled down on his commitment to keep the risk element at centre stage. The doubling of the EIS allowance, as you’ll know, applies only to truly “knowledge-based” companies, and to situations where there is genuine risk – which means, in principle, that the capital-preservation investments which HMRC once said comprised 62% of all EIS investment face a possible loss of eligibility.

So Where’s the Problem?

“Possible?” Perhaps we should put it more strongly than that. As the EISA’s expert panel on the Autumn Budget outcome agreed, the Chancellor had expressed a commitment to excluding low-risk investments from EIS - but he hadn’t said exactly how that would happen. The last we heard, HMRC would soon be coming up with further detail and guidance on this topic; meanwhile, investee companies were told they will face a “principlesbased test” of their situations. Anyone seen it yet?

GB Investment Magazine · February 2018

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News

Record-breaking fundraise for Octopus Titan VCT Octopus Investments, the largest provider of venture capital trusts in the UK, has achieved a record-breaking fundraise for Octopus Titan VCT, increasing the offer to £200m.

The firm recently announced that following Titan VCT Board approval, a £80 million over allotment facility is to be used in its current fundraise for the UK’s largest VCT, Octopus Titan VCT, after investor demand took the total fundraising amount to recordbreaking levels.

Octopus Titan VCT reached its initial target of £120 million within just four months and the target of £200 million will make it the largest ever fundraise by a VCT and, once fully subscribed, would increase the total fund size to over £600 million.

Managing Director at Octopus Investments Paul Latham said: “With investors facing increased taxation on both their pensions and property, the rise in inflows into VCTs is not surprising.

More and more people are looking at alternative tax-efficient investment options to support their retirement planning. There has been a steady growth in demand for VCTs over the last few years as more advisers and investors gain awareness of the attractive benefits they offer.

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GB Investment Magazine · February 2018

Today’s news is evidence of investor confidence in VCTs as a powerful planning tool and an increasingly mainstream investment option for many.”

Fund manager of Octopus Titan VCT Jo Oliver added: “As well as the attractive tax benefits, people are increasingly interested in playing a role in supporting the next generation of UK businesses. In November, the Chancellor highlighted early stage companies as the backbone of the UK economy in his Autumn Budget, as well as recognising the

vital part VCTs play in helping to develop these businesses.

The UK is a vibrant market for entrepreneurial activity and there is a thriving pipeline of investment opportunities. We’re excited to be able to offer more investors access to the growth potential that these dynamic young companies can offer.”

The share offer is open until 4 September 2018, but may close earlier. The minimum investment is £3,000 while the maximum investment qualifying for tax relief is £200,000.

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PlayFund is currently open for investment with an anticipated close date of 31st March 2018.

For more information: info@playfund.co.uk www.playfund.co.uk 0207 118 1610 © 2018 All Rights Reserved.

Images courtesy of PlayFund investee companies

Best Newcomer

Investment Week Tax Efficiency Awards 16/17

News

Second robotics and AI fund from BritBots

BritBots (Martlesham, UK) which promotes UK robotics companies, has launched its second British Robotics Seed Fund.

The fund will also be managed by Sapphire Capital Partners, a specialist manager of tax-efficient funds.

The first British Robotics Seed Fund is now fully invested, leading the seed rounds of six high-potential robotics and AI related ventures.

The new fund will focus on SEIS-qualifying investment opportunities, aiming to deliver significant tax benefits to investors. What’s more, there will be scope for the fund to make a number of investments under the EIS scheme when there are scale-up opportunities for existing portfolio companies.

BritBots said that there has been rapid increase in the number of robotics-related start-ups and the new fund looks to partner with entrepreneurs and academic robotics teams to deliver high-value businesses that can deliver superior returns for investors.

The second fund will look to back world-class entrepreneurs with global product opportunities.

There will be a particular focus on machine-learning and enabling technologies for autonomous robotics.

Britbots meets with hundreds of businesses each year and has already earmarked a number of exciting businesses as potential investments for the fund.

Dominic Keen, founder of Britbots said: “I’m delighted to be able to launch our second robotics fund. It is the best way for an investor to get access to mixed basket of shares in the exciting robotics and AI growth companies that are shaping our economy for the decades ahead.”

The fund will close at the end of March 2018.

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GB Investment Magazine · February 2018

Choosing your

EIS provider Before you choose your next EIS provider, ask these four questions:

1 2 3 4

Do they run their EIS fund in the way that the Treasury intended?

Do they have a proven track record of exits?

Do they have their own business experts and entrepreneurs to guide the companies they invest in?

Do they have global reach to optimise the ideas of the companies they invest in?

Contact Par uity and you can as these uestions or yoursel as ell as any others you may ha e.

Contact us at: T: 0131 556 0044 E: info@parequity,com W: www.parequity.com

News

New guide to help explain Budget changes The Enterprise Investment Scheme Association (EISA) has published a new guide to help advisers understand and explain changes in the tax-efficient investing scheme, following the Autumn 2017 Budget.

The free guide – “EIS: new landscape, new opportunities” – explains the background to the changes and why capital preservation schemes will no longer be able to take advantage of the generous benefits associated with EIS.

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trade body for the industry, said: “A detailed survey we conducted with advisers in the wake of the Budget announcement showed that half expect to see more investor interest now. Even many advisers who have never used EIS products before are recognising that they will be challenged to discuss the options with clients in the months and years ahead, so we felt it was important to produce a guide to help explain to everyone where EIS now stands.”

It also highlights the enhanced terms, including the doubling of the amount that can be invested by individuals through EIS, from £1m to £2m. There has also been an increase in the amount that can be invested in total in so-called “knowledge-intensive” companies – from £5m to £10m.

Laurence Callcut, Partner at Downing LLP, which cosponsored the guide, said: “Before the Budget there was a lot of speculation that EISs were at risk. So when the Chancellor announced that there were no changes to the underlying tax reliefs and he was doubling some of the investment limits, this was most welcome.”

Mark Brownridge, Director General of EISA, which is the

“EISs have resulted in over £16 billion pounds of investment

GB Investment Magazine · February 2018

capital for British entrepreneurs – much of it through EIS managers like Downing, which not only identify promising businesses but also support their management teams through the difficult early growth and development stages.

We can now be confident in continuing that good work.”

Donna Harding, Marketing Manager at guide sponsor Blackfinch, said: “We see the commitment to double investment allowances as a positive signal that the Chancellor recognises the important role EIS has to play in supporting the growth of the British economy.

“Investors now know EIS is open for business and the industry has been given very clear guidance about what will be acceptable in the future.”

“EIS: new landscape, new opportunities” is available from the GBI Magazine website.

News

Polar Capital issues interim results Polar Capital has issued its interim results for six months ended 30 September 2017.

Chief Executive Officer Gavin Rochussen said: “Fund performance has improved and it is pleasing to report that, in the nine months to 30 September 2017, performance across our fund range has been largely ahead of respective fund benchmarks.

While the ethos and philosophy of Polar will not change, there will be a strategic focus on diversification of fund strategies, client segments and client geography.

We continue to search for top performing investment talent to manage funds that will complement the existing strategies.

The outlook for the Company for the remainder of the financial year is encouraging with continued momentum in flows and fund performance in the months following the reporting period.”

Key figures: • Assets under management at 30 September 2017 were £10.6Bn (31 March 2017: £9.3Bn) – net fund inflows of £820m together with market uplift and fund performance of £510m; • Core operating profit, excluding performance fees, £12.0M (30 September 2016: £8.7M); • Operating profit before share-based payments £15.7M (30 September 2016: £10.6M);

• Basic earnings per share 10.19P (30 September 2016*: 6.68P) and adjusted† diluted earnings per share 11.78P (30 September 2016: 8.15P); • Interim dividend per ordinary share of 6.0P declared (2016: 5.5P) to be paid in January 2018; • Shareholders’ funds £68.8m (30 September 2016*: £65.5m) including cash and investments of £75.7m (30 September 2016: £73.8m).

Polar Capital, Chief Executive Officer Gavin Rochussen

• Pre-tax profit £11.8M (30 September 2016: £8.5M);

GB Investment Magazine · February 2018

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Fund Twenty8™ SPREAD YOUR RISK

PASSIVE EIS INVESTING

FIND OUT MORE www.syndicateroom.com/fundtwenty8 This is only directed at professional investors and should not be relied upon by retail investors. The value of investments may go down as well as up.

Authorised and regulated by the Financial Conduct Authority (No. 613021). Registered office: The Pitt Building, Trumpington Street, Cambridge CB2 1RP

News

“2017 a game changing year” – says Seedrs Seedrs has had its most successful year. In a flag-waving statement, Europe’s leading equity crowdfunding platform points to a pivotal year for it and the industry.

It highlighted its successes, including a number of industry award wins, an oversubscribed funding round led by Woodford Investment Management, record-breaking deals and the launch of the industry’s first fully functional secondary market.

Secondary Market In the first half of the year, Seedrs launched a secondary market which recognised the growing demand for liquidity from investors. It allows shareholders in Seedrs portfolio businesses to trade shares during a one-week window each month. Since the June launch, share lots in 126 different businesses have been traded, with investors achieving 682 exits through the process.

The Seedrs secondary market continues to grow, with five

times the number of shares listed in the December trading window as had been listed in the market’s first window in June.

In addition to the many investor exits achieved through the secondary market, Seedrs saw two company-level exits in 2017.

Blow LTD, the on-demand beauty services startup, facilitated an opportunity for Seedrs investors to sell their shares to retail giant Debenhams. Only a small handful of investors chose to sell, given the company’s strong prospects ahead, but those who did achieved up to a 3x return. Wealthify, the roboadvisory platform, agreed the sale of a majority interest to insurance leader Aviva. Seedrs investors, some of whom only purchased their shares a few months ago, will sell their stakes as part of the transaction for a nearly 20% gain.

CEO at Seedrs Jeff Kelisky said: “Since joining Seedrs in January 2017, I have been

hugely impressed and delighted by what we have built and the opportunity we have ahead of us. The continued success of so many of our portfolio companies validates everything we are working so hard to achieve, but also the very essence of what equity crowdfunding stands for – helping ambitious growth focused businesses thrive with patient capital, and starting to deliver sizeable returns to investors.

“Seedrs has been live for five years, and in a long term asset class where we have always talked about returns from the seven year mark onwards, the trajectory is already incredibly positive. 2017 has been a standout year for both Seedrs and the wider space, but we have long been looking ahead to 2018 and planning how we can continue to lead the equity crowdfunding space with innovative technology, gamechanging products and many more portfolio success stories.”

GB Investment Magazine · February 2018

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Independent Reviews of

Tax Enhanced Products

Reassurance for‌ investors

enabling you to understand your investment options

advisers

equipping you to advise your clients with confidence

compliance

knowledge that you are meeting your regulatory requirements Contact Dr Brian Moretta FFA Head of Tax Enhanced Services Email: bm@hardmanandco.com Tel: 020 7194 7622 Web: hardmanandco.com Hardman Research Ltd, trading as Hardman & Co, is an appointed representative of Capital Markets Strategy Ltd which is authorised and regulated by the Financial Conduct Authority.

News

ThinCats and Hennik Edge buddy up and offer £100m ThinCats and Hennik Edge have teamed up, making £100m available to fund and support dynamic manufacturing businesses across the UK.

“With this much-needed funding, and with the expertise of Hennik Edge, we can look to raise the pace of our lending even further.

ThinCats, the alternative finance specialist, and Hennik Edge, the networked advisory team for manufacturers, plan to accelerate the growth of UK manufacturing.

“ThinCats specialises in providing funding that, in many cases, the high street banks cannot.

Whether it’s for working capital, acquisitions, asset purchase or refinancing, we will help to ensure that manufacturing continues to be the lifeblood of the UK economy by supporting growth across the sector.”

ThinCats said it will use its UK-wide network of Origination Managers to support those companies in the manufacturing sector that require a level of capital to take their businesses forward.

CEO of ThinCats John Mould said: “This is great news for fast-growing manufacturing firms. Since 2011 we have lent £20m to businesses operating in the manufacturing space, with 73 loans servicing 50 different companies.

Managing Director at Hennik Edge Steven Barr added: “We’ve heard from frustrated manufacturers who need a different kind of finance from what’s on offer in the high street.

This new release of £100m of funding, backed

by ThinCats, offers a great alternative for ambitious, growing SMEs.”

GB Investment Magazine · February 2018

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THE NEW KIDS ON THE BLOCK An investment showcase bringing you the newest offerings from the sector Investment: Deepbridge Innovation SEIS Aim: To invest in new technology that has the ability to change how we live Tell us about the fund Deepbridge perceives innovation as the marriage of research and entrepreneurship, with the potential to support sustained economic growth in the UK. On an individual scale, new digital technologies can have the ability to change how we live, work and how we interact with each other.

On a global scale, population growth, particularly in developing countries, is placing great strain on finite resources.

Technological innovations continue to transform our world. This is most obvious in our modes of communication and consumption, like social media and e-commerce.

Other advances, like smartphones, have materially augmented these new modes of activity, for both businesses and consumers.

Less obvious, but still significant, innovations such as advanced manufacturing are entering a new era. We believe that artificial intelligence has the potential power to disrupt established production methods, offering cheaper goods that can be more easily customised to the consumers’ needs and requirements. Such developments are challenging the historical model of labour and capital-intensive factories, with protracted and often complex supply chains.

Deepbridge seeks to identify those seed-stage companies, in such fields as energy and resource innovation, life sciences and medical devices, advanced materials production and the emergence of machine learning and artificial intelligence.

We believe these companies have the potential to either enhance existing technologies, or create new market and consumer demands. Deepbridge asserts that there is a potentially compelling opportunity for investors to secure attractive entry terms to fund such start-ups. Therefore, now is potentially an advantageous time to invest in emerging technology opportunities via SEIS. The Deepbridge Innovation SEIS offers investors an opportunity to secure potentially attractive returns by investing in a diversified portfolio of seed-stage innovation companies, whilst taking advantage of the considerable income tax, capital gains tax, and inheritance tax benefits available under the SEIS. Providing seed investment to emerging technologyfocused 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 overarching focus of the Deepbridge Innovation SEIS is to offer investors a diversified exposure to companies engaged in a variety of technologies, including: • Energy and resource innovation.

• Medical technologies and diagnostics.

• Business enterprise information technology.

• Data analytics.

• Transport and automotive innovation.

• Instrumentation and control technologies.

• Advanced materials and manufacturing.

• Robotics, machine learning, and artificial intelligence.

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GB Investment Magazine · February 2018

Specifically, the investment strategy of the Deepbridge Innovation SEIS is to invest in a diversified portfolio of a minimum of five investee companies, each of which will focus upon the development and/or application of technological innovation to address an identifiable market demand or consumer need.

The investee opportunities will be sourced from highly regarded partners and an extensive deal flow network developed by Deepbridge that includes research and innovation organisations, commercial enterprises, academia, venture capital institutions, as well as Government-backed development funding agencies.

Key partners include the National Science and Innovation Campus, Sci-Tech Daresbury and digital development experts, We Are Nova.

It is envisaged that each subscription will be deployed into the portfolio of investee companies, on a discretionary basis, subject to a minimum threshold of investor inflows. The key investment attractions include the potential to benefit from the extensive experience and expertise of Deepbridge, the potential to attract grant and equity ‘matched’ funding, as well as the potential to generate significant tax-free returns under the SEIS. The Deepbridge Innovation SEIS will generally invest in companies possessing significant intellectual property, requiring relatively modest capital at the outset, with the express intention of delivering either a product designed to prove concept, a prototype, or a minimum viable product (a new product with sufficient features to satisfy early-stage clients). It is the express intention of Deepbridge to also consider further funding of the selected investee companies under EIS, where companies meet the specific investment criteria of a relevant Deepbridge EIS. There are a number of key benefits including: • An engaged hands-on approach from an experienced team.

• Free of manager fees to the Investor for subscriptions received via a financial adviser, facilitating up to 100% deployment of investor funds ensuring maximum tax efficiency for the investor.

• SEIS tax advantages applicable, depending on personal circumstances.

• Performance fee aligned with the investors’ interests.

• The potential to deliver significant investor returns on disposal of an investee company.

How much is being raised?

The proposition is open-ended, although our target tranche size is £1.5 million. (Subscriptions may be deployed in tranches of between £500,000 and £1.5 million, at the manager’s discretion.)

What types of investments are being sought?

The Deepbridge Innovation SEIS will invest in a portfolio of companies that are at start-up stage and possess intellectual capital, seeking to develop such intellectual property potentially to the stage of a prototype or a minimum viable product.

Investopedia describes intellectual capital as the value of a company or organisation’s employee knowledge, business training and any proprietary information that may provide the company with a competitive advantage.

Examples of such intellectual property could include innovative software development, new medical technology applications or transport innovation, developed either by an entrepreneur or a university spin-out (a company created to commercialise an idea formed at a university).

Such investee opportunities will strive, with hands-on guidance and mentoring from the Deepbridge team, towards the delivery of a proof of concept, minimum viable product, or prototype by which the company can demonstrate to early customers the initial benefit of the applied intellectual property.

There are a number of key risks with such an investment: • Investors should note that their subscription will be invested in shares issued by start-up and small unquoted investee companies.

• Given that the investee companies will be at seed stage, it is unlikely that the investee companies will have revenuegenerating ability at this time.

• It is unlikely that subscribers will have access to their capital for at least five years from the date of subscription.

• No established market exists for the trading of shares in private companies.

• Due to the nature of the investing in small unlisted companies, investors must be aware that their capital invested is at risk and investors could lose all capital invested.

• Tax reliefs currently available under the SEIS and stated investment returns are not guaranteed and may not be delivered.

What is the minimum investment? £10,000. The maximum investment is £100,000.

What is the targeted return?

200p for every 100p invested, excluding tax reliefs, after a minimum of five years.

Provide details of the top three fund holdings The top three investments will be revealed in due course.

GB Investment Magazine · February 2018

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THE EXITEERS Bringing you news of successful exits in the sector Fund: YFM Equity Partners Exit: Selima

Details of the fund YFM Equity Partners originally invested in 2012, through its advised VCTs, British Smaller Companies VCT plc and British Smaller Companies VCT2 plc, alongside a buy-in team led by serial entrepreneur Richard Beaton. The team bought into a business offering legacy payroll and HR systems: • Fund: British Smaller Companies VCT plc and British Smaller Companies VCT2 plc.

• YFM Private Equity Limited advises both VCTs. • Date of investment March 2012.

• Original deal size £2 million.

• In May 2017 Selima was sold to the Access Group for an undisclosed price.

• Investment held for five years.

What does the company do?

The company was established over 20 years ago in Manchester to develop an expenses software solution. Later, a Sheffield based payroll software business and a payroll bureau business in Croydon were brought together to operate through one single entity, Selima Limited. Selima Limited, at the time of investment, had developed as a payroll and expenses software supplier with particular strengths in public sector applications.

Wayne Blakemore and Michael Parry were searching for an MBI opportunity in the space and together with serial entrepreneur Richard Beaton as a prospective chairman they approached YFM for funding to allow the purchase of the business.

YFM believed this was a strong management team that would be able to grow the business and take it in the right direction focusing on both product development and enhanced the customer service.

The team picked YFM as an equity partner because of their experience in growing businesses and previous experiences of YFM as a backer of software businesses.

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GB Investment Magazine · February 2018

The team led the transfer to a cloud based solution and re-focussed the business on specific market verticals, including hospitality, education and retail as well as the established market of local authorities. The result of the product development and investment in sales and market resource grew the business from less than a hundred to over three hundred customers. The company now creates an end-to-end solution with payroll managed service, delivered from Selima’s payroll service centres with fully managed payroll back office functions.

What did the company invest the money in?

YFM Funds supported the management buy-in of the Selima business and the development of a new cloud based solution.

How much was raised?

The original deal size was £2 million.

How was the exit achieved?

Selima had been approached by a number of possible suitors during the course of the investment, with the profile of being associated with a private equity backer and a leading chairman, together with some notable sales wins driving significant interest in the company. It was clear that Selima had both profitable sales growth and had capabilities that could compliment an acquirers’ product and service portfolio.

The Access Group was formed in 1993 as a specialist in accounting software and has expanded through a combination of organic growth and acquisitions. It now services more than 12,000 UK customers with a range of products spanning enterprise resource planning, finance, human resources, payroll, recruitment and education and is based in Colchester.

In May 2017, the business was sold to the Access Group, as a leading software supplier to mid-market

companies in the UK. Access Group commented that the acquisition of Selima would enable them to expand their offering and what they could deliver in retail and hospitality sectors. The deal would expand Access Groups product portfolio for the UK academy school sector and create a new suite of products across other sectors. Access’ strategy is to develop a range of business management software and Selima represented a profitable and highly recurring revenue business that could provide access to new vertical markets and generate crosssell opportunities within its existing and newly acquired customer base.

The management team of Blakemore and Parry have remained with Selima to support the future success under new ownership.

How much was returned to investors?

Overall, YFM Equity Partners achieved 3.7x its original investment, with further possible performance related payments which could take the return to nearly 5x.

What other benefits has the company provided?

YFM invested in Selima because of an experienced buy-in team, a well-regarded existing service line and the potential to grow the business into other verticals by investment in technology.

• We supported the company and funded losses whilst a significant investment was made into transformative new technology to make Selima, a prominent provider of cloud-bases workforce management software and managed payroll services.

• We supported the business to make a significant investment into sales and marketing activity to take the new capabilities to market.

• We helped the experienced team get to grips with a new business.

• We supported the business as it opened a new presence in Manchester, adding to the existing office in Sheffield.

• We supported the investment required to identify new markets and sell the new technology into specific vertical markets, such as the academy schools sector and sub-sectors of the hospitality market.

YFM’s long-term partnership with the business helped to transform an existing successful business: • Changing the technology base of the business.

• Growing to over 300 customers, including Hawksmoor, and Brakspear in the hospitality sector; Askham Bryan College and Bolton College in the education sector as well as a number of local authorities.

• Making a step change in profitability.

The investment by funds advised by YFM mean that Selima could develop a cloud based solution which could adopt to organisations specific needs.

In hospitality, retail education and professional services sectors the Selima software provides the ability to schedule and optimise labour, manage expenses, training and performance as well as attendance and absence.

The time and investment required to renew and improve the product and develop its functionality was considerable. Blakemore, Managing Director, said “the support that we have received from YFM Equity Partners since the management buy-in in 2012 has been fantastic and has contributed to Selima’s strong and sustainable growth”.

How will you continue to support the company?

The VCTs sold their shares alongside the management team in May 2017. YFM continues to use Selima’s systems for all its payroll and HR requirements.

GB Investment Magazine · February 2018

19

FILM CLUB Turning the lens on investments with movie star qualities

Fund A number of films in production ana er Iron Box Capital

Tell us about the investment?

In early to mid-2014 we had early conversations with people the financial sector, and discussed what kind of financing opportunities/solutions they would like to see as alternatives to the mainstream media finance provider. During our discussions we arrived at three key points they would like to see offers that were geared towards capital growth, while still have access to a ‘first dollar’ recoupment position, and something for investors with a mid-to-highrisk appetite, and more participatory ‘a memorable investment’, and they liked that we actually came from a film-making background.

Iron Box Capital is a specialist film and TV financing company, with the difference that we are coming from a film-making background. With decades of combined media and entertainment experience, we understand the whole process of the film value chain of making films, including the financing, development, production, distribution and marketing of films. The benefit of this is that we look after companies and projects invested into not only from the financial side but from the creative and operational perspectives as well. For example, our Chairman is Colin Brown, former British Film Commissioner, who besides many other projects brought Game of Thrones to the UK. Investors with Iron Box Capital, have several ways to invest into films: • Particle Fund 1 our EIS fund set-up under EIS regulations.

• Individual investee companies which can be set-up as SEIS or EIS. • Directly into films or other tailormade solutions.

Particle Fund 1 has been set-up under EIS regulations, which in turn can invest into the individual SEIS/ EIS Investee companies. Where Investors want to participate directly in a company, they can choose their preferred vehicle either by genre and/or by team.

Examples are Alive in the Morning Limited, which focuses on financing the development, production

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GB Investment Magazine · February 2018

and marketing of horror films. Not Goliath Limited, which invests into the development of animated feature films bringing projects up to the sales trailer stage. Alternatively, we have team-focussed offers such as Reylon Entertainment, which takes it’s name from the cities of Reykjavik and London where we have joined forces with TrueNorth & Mystery Productions based out of Iceland. For investors looking to make bespoke investment opportunities, our team works collaboratively with our clients to support tailor made investment opportunities.

hat films are in

roduction

Horror Via company Alive in the Morning: Ravers, directed by Bernhard Pucher.

Memorial directed by Graham Fletcher Cook.

Animation / Family Via company Not Goliath: Unstable, directed by David Freedman Trailer Development starts Q2 2018 Thriller Via company Page 27 Films: Wolf Night, directed by Guillem Morales Resolute, directed by Catherine Linstrum Greek Audiences Via company Nostoi Pictures: The First Cypriot Astronaut directed

by Stavros Pamballis Team based investment vehicles Via company Reylon Entertainment: The Hidden directed by Thor Saevarsson Other Updates: One animation is fully financed soon to be announced.

hat film characteristics should investors loo out for Everything starts with the script, a good script that can be made into a great one. Rarely if ever at all has been a great film made out of a bad script. It needs to have an interesting and fresh premise, engaging

characters and dramatic conflict. Most important it the genre of the script, as that defines the final audience.

Company Illustrative Returns Initial Investment

£1,000

As the genre of the project defines the finally buying customer, the market size, by age-group, gender, geography, income bracket etc, and route to market should be evaluated and validated before a project is being greenlit (in Iron Box Capital’s instance).

There is no one size fits all approach as every film is a start-up/prototype. Hence go-to-market strategies need to be carefully planned on a project by project basis out in terms of market/market size by age-group, gender, geography, income bracket etc. in order to clarify the activities going forward.

Period

4 Years

Returns

£2,073

Returns inclusive of EIS

£2,373

It is crucial to have a team, creative, financial and operational that can deliver on a scripts promise, executes the creation, delivery and marketing of a product that entertains final paying customer worldwide.

Inclusive of EIS Relief and CGT Deferral & Repayment

What is the minimum investment?

On the fund £20,000, individual investment vehicles £10,000, both at discretion of the fund manager and management of companies respectively.

ow much has

een raised

Altogether, we are closing c.$14/15 million of investment into two projects, financed through presales, equity, EIS and relevant tax credits / rebates.

hat return can investors ex ect Subject to investors route into the film. Via the fund c.15% Internal Rate of Return (IRR) and on an investee company 20-25% IRR: Fund Illustrative Returns Initial Investment

£1,000

Period

4 Years

Returns

£1,749

Returns inclusive of EIS

£2,049

Internal Rate of Return Fund

Company

Excluding EIS relief

15%

20%

Inclusive of EIS relief

24%

29%

29%

35%

(within 6 months of share issue)

ow to de-ris

our film investment

A recent BBC Culture article asked the question, is this a new golden age of cinema? The BBC’s conclusion was that it is. We couldn’t agree more.

Technology has transformed the industry and the global demand for film and digital content has never been greater. Video-streaming through TVs, tablets, smartphones and games consoles means there is a thirst for content like never before.

This makes it a golden age for film finance and investing in films too.

But that doesn’t mean investors simply have to throw money at a film project to turn a profit. Nothing could be further from the truth. The industry is highly competitive and wise investors de-risk their investments as much as possible.

What does this mean in practical terms? At Iron Box, we think of this under two headings: risk and mitigation. We are transparent with investors about the risks involved in each project and the steps we take to minimise them. In brief, we examine projects under five main headings:

GB Investment Magazine · February 2018

21

1. The business Risk A starting point is to analyse competing titles with similar creative elements. This includes genre, storyline, budget, front of camera talent, timelines, sales agency and distribution teams. If a competitive title is at a more advanced stage we will pass.

Even the most experienced studios have fallen into the trap of backing ‘copycat’ movies released at the same time (Armageddon and Deep Impact, for example).

Another risk factor is the audience demographic for the film. We will examine this for size, age, ethnicity, etc. If the target audience is too small we won’t go ahead. If it is unclear, we will insist on a script rewrite.

For films with a budget of more than £1.5 million, other business risks include the experience of the director, the ownership of intellectual property and the quality of the marketing strategy.

2. Counterparty Risk The proper assessment of the financial viability of a project relies on realistic sales estimates. These might vary as a project evolves depending on cast changes, scale and other factors. The level of our investment will be informed by the sales estimates, so their reliability is crucial.

So too is our confidence in the chosen sales agent.

We will vet them for their track record to establish if they are known for soft sales or if they are totally dependable in the way they handle revenue. As a matter of course, we will invest conservatively if a sales agent is unknown to us.

Investment in a film is an investment in key people.

We will insist on the ability to adjust or withdraw our funding if a key person, such as an actor, director, producer or sales agent, leaves the project.

3. Operational Risk An inexperienced production team or one unsuited to a project is not a recipe for success. We executive produce all our projects so that we can keep tabs on the performance of key members of the production

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GB Investment Magazine · February 2018

team and adherence to schedules and budgets.

Before that, we will have vetted all the main people from producer and director to costumer designer and make-up artist.

There are trip wires everywhere when making a film.

A mistake in any number of areas can derail a project.

Terry Gilliam’s The Man Who Killed Don Quixote is an infamous example of how operational problems can curse a film. Flooding on location in Navarre in Spain in 2000 lead to the set and equipment being destroyed. This, plus financial problems, resulted in the project being abandoned at a cost of several million dollars. (Though seventeen years later, Gilliam is still promising to complete the film.)

4. Compliance This is the less glamorous side of the industry but vital nevertheless.

The loss of EIS status can result in less money being made available than anticipated from investors.

Similarly, non-compliance with country or state rules can lead to loss of tax credits and rebates. We work with experienced accountants who specialise in these areas.

We also take steps to ensure every project complies with health and safety and environmental issues.

These may seem unimportant areas but bear in mind the controversy surrounding the Danny Boyle-directed film The Beach. In order to make the Thailand beach setting more ‘paradise-like’, a large natural beach was bulldozed and landscaped. This resulted in costly lawsuits from environmentalists that dragged on for years and adverse publicity for the film.

5. Financial Risk The most obvious area here is whether the budget is realistic (either too high or too low). The risk is that the film won’t get produced at all or that productions starts but the film can’t be finished.

For projects with budgets of more than £1.5 million, we require a completion bonder guaranteeing that the project is delivered on time and on budget.

FILM CLUB

We will also take other steps to make sure each project has sufficient liquidity as well as watertight legal agreements dealing with how income is collected and delivered.

Conclusion We believe there has never been a better time to invest in films. That is no excuse though for not de-risking each investment as much as possible.

This is merely an outline of how we do that and there are countless other steps we carry out to make sure each investment is as secure, and successful, as possible.

h

is the

film industr

im ortant

Investment in films on the rise despite the bad press about film tax schemes. This is due to some extent to the tax benefits of investing in film offered by the government. These include no less than seven corporation tax reliefs aimed at creative industries.

One of them, Film Tax Relief, allows the recovery of 20% of a film’s production costs (subject to satisfying certain conditions).

Where investors use EIS for film investments, the government offers tax relief for individuals of up to 30%.

Government figures reveal that its support for the film industry through tax breaks led to more that £1 billion worth of investment into the UK in 2015 (the latest date for which figures are available). It claims that £12.49 is generated in the UK economy for every £1 of tax relief provided, leading to the creation of thousands of jobs.

This is confirmed by figures from the BFI, which show that the amount spent on film production in the UK reached £1.6 billion in 2016, the highest amount on record.

Finally, we would be the last people to tell you that investing in film is without risk but by using EIS schemes, taking advantage of available tax reliefs and, most importantly, by investing with the right people, you can reduce this.

GB Investment Magazine · February 2018

23

‘KNOWLEDGE INTENSIVE’ EIS: IS IT ALL LAB COATS AND TEST TUBES? Will Laws, Senior Marketing and Communications Manager at Oxford Capital, outlines what the government means by ‘knowledge intensive’ companies

For EIS investment managers, November’s Budget was the most nervously anticipated in years. Earlier in 2017, the government published its Patient Capital Review consultation, which revealed a concern that EIS was not channelling enough money to the right companies. Rumours were rife about what the Chancellor might do in response. Cut the rate of income tax relief? Increase the required holding period? Ban certain industries from participating?

of a company’s employees to hold postgraduate degrees in a subject that is relevant to their job and to be engaged in research and development activity. In practice it’s a rarity for companies to meet this strict test. Philip Hare, a tax consultant who specialises in advising companies raising or investing through the government’s venture capital schemes, says he has only ever come across two companies that met the skilled employees condition.

So what happened?

But thankfully companies can still qualify as knowledge intensive by satisfying a much broader ‘innovation’ condition. To meet this test, a company must be developing intellectual property which could reasonably be expected to form the backbone of the company’s business ten years from the investment.

Scientific companies will often meet this condition, but so will companies that can show they are developing ideas or products that can be protected through trademarks, patents or other forms of IP protection.

As it turns out, the rumours of changes were not unfounded, as there have been some tweaks to the EIS rules. Indeed, unusually, the planned EIS changes were mentioned from the despatch box rather than being buried in the small print. But the changes are positive.

Firstly, Chancellor Philip Hammond said he would “ensure that EIS is not used as a shelter for low-risk capital preservation schemes”. This has already been followed up with the publication of some HM Revenue & Customs (HMRC) guidance, designed to make sure EIS reliefs are only available when the investor’s capital is genuinely at risk.

This renewed focus on risk-taking is to be welcomed, as is Hammond’s other big announcement regarding knowledge intensive companies. These companies already enjoy an enhanced EIS regime, including a lifetime funding limit of £20 million (compared to £12 million for other companies). Now, knowledge intensive companies can also raise up to £10 million of EIS funding (or a combination of EIS, VCT and other state-supported funding) in a year – a doubling of the previous limit. Furthermore, individuals will be able to invest up to £2 million in EIS companies in a given tax year, as long as at least £1 million of the total is invested in knowledge intensive companies.

What makes a company ‘knowledge intensive’?

For some clients, the phrase ‘knowledge intensive company’ might intuitively mean university spinouts or engineering and life science businesses. And it is theoretically possible that such companies could meet HMRC’s ‘skilled employees’ condition, which forms part of the assessment of whether a company is knowledge intensive. This requires at least 20%

24

GB Investment Magazine · February 2018

Furthermore, software including apps and website code can often be classed as intellectual property. This means innovative companies from a huge range of different industries could potentially be counted as ‘knowledge intensive’, because their businesses hinge on exploiting the IP that resides within their websites or apps.

To qualify as knowledge intensive, companies must also have spent a certain proportion of their operating costs on research and development or innovation.

Relevant expenditure should have been at least 10% of total operating costs in each of the three years prior to the EIS investment, or at least 15% in one of the three years. The detailed rules here are fiddly, but the upshot is simple. Companies can devote the vast majority of their operating costs to other activities and still meet the conditions for qualifying as knowledge intensive.

This is an important point for clients to understand.

It means that investing in knowledge intensive companies does not need to equate to participating in a funding round that will be entirely consumed by R&D expenditure. Investing in knowledge intensive companies could mean supporting commerciallyfocused businesses that will be using the funds raised to finance recruitment, sales and marketing, and other activities that could help grow the business and ultimately generate value for the investor.

hat di erence will the rule chan es make to companies?

The government clearly recognises that innovative businesses are important to the UK economy. Increasing the amounts that knowledge intensive companies can raise each year sends a positive signal.

However, there may not be vast numbers of companies positioned to benefit from the increased limits straight away.

Few, if any, EIS investment managers have deep enough pockets to commit £10 million to any single company in a given year. Through the Oxford Capital Growth EIS, our diversified EIS portfolio service, we will typically invest between £1 million and £2 million in an investment round, or sometimes less if it’s the first time we have invested in the business.

That said, it is possible that the rule changes could open the door to greater cooperation and co-investment between taxefficient investment providers.

Currently, we more commonly co-invest with venture capital funds that are not tax-efficient, in part so that we can be involved with bigger fundraising rounds without running into the £5 million EIS funding limit. The new £10 million limit could theoretically make it easier for us to invest in a company alongside one or more other EIS providers.

But co-investments would need to be carefully managed. If a company in our portfolio performs well and consistently hits its targets, we might expect to invest in it not just once but several times over a period of a few years. If each follow-on investment involves a syndicate of EIS managers, there could be a risk of reaching the £20 million lifetime funding cap, preventing us from investing as much as we would have liked. Of course, that £20 million cap is tied to the EU’s rules on State Aid, so it’s conceivable that it could eventually change, post-Brexit.

Time will tell…

After a few months of listening to the rumour mill, Oxford Capital and many other EIS providers were delighted by what we heard in the Budget. Not only does the government continue to support the scheme, but it is actively looking for ways of improving it. Time will tell how much practical difference the doubling of the funding limit for knowledge intensive companies will make for investors and businesses.

But in the meantime, there is no doubt that it is a welcome and symbolic step.

GB Investment Magazine · February 2018

25

GETTING BEHIND VCTS IN 2018 After a year of change, Association of Investment Companies Head of Training Nick Britton, explains why it’s a good time for advisers to look at alternative investing

If there’s one word that sums up 2017 in VCT-land it is probably ‘phew’. Rumours that the Chancellor would change the tax reliefs available in the Autumn Budget thankfully did not become reality.

Those rumours, however, have had their effect on fundraising. From the beginning of the current tax year to 11 December, VCTs have raised £454.8 million.

That is more than they raised in either of the whole tax years ending April 2014 and April 2015, and roughly the same as the amount raised in the year ending April 2016. Some advisers have told me that they made sure clients subscribed for their VCT shares early to avoid potential changes to tax reliefs.

The Budget did herald significant changes to VCTs, however. The changes that will be introduced in 2018 (with a few held back to 2019) are roughly on a par with the 2015 rule changes in significance and scope.

Like the 2015 changes, they affect EIS and VCTs alike.

As a quick reminder, the 2015 rule changes banned VCTs investing in management buyouts (MBOs), because such deals weren’t deemed risky enough to justify the generous tax reliefs. They also introduced a new maximum age on VCT investee companies (in most cases, seven years).

The 2018 changes take forward the theme of refocusing VCTs on smaller, more early-stage, and therefore riskier companies. There are two main sets of changes to be aware of.

The first set prevents VCTs (and EIS too) investing in what’s known as ‘capital preservation’ type businesses. Investments will need to meet a new ‘principles-based test’ with two parts. Does the

26

GB Investment Magazine · February 2018

company have an objective to grow and develop? And is there a significant chance that the investor could lose more than they might expect to make, including the tax relief? If the answer to those questions is ‘yes’, the investment passes the test.

The second set of changes concerns the amount of time VCTs have to invest their money. Currently, VCTs have three years to invest 70% of the money they raised in qualifying companies. From April 2019, that 70% will become 80%, and there’s an additional stipulation (from April 2018) that 30% of the money raised must be invested in just 12 months. To sum up, HMRC wants VCTs to invest more of your clients’ money, faster.

More rule changes There are some further rule changes. Loans made

by VCTs must be unsecured and made on a ‘normal commercial basis’. ‘Knowledge-intensive’ companies, which meet certain criteria defined by HMRC, will be able to raise more from VCTs and EIS. So what’s the impact on investors? The first point to bear in mind is that, as with the 2015 rule changes, the impact will be gradual rather than a cliff edge scenario.

This is because most VCT money is raised by existing VCTs, not brand-new ones. Existing VCTs already have investments they made before these rule changes, which continue to sit within portfolios and account for much of the return investors will receive in future.

But new VCTs will offer exposure to investments made entirely under the amended rules. The same applies to any new share classes launched by existing VCTs.

Taken together, the 2015 and 2018 rule changes move VCTs (and EIS) up the risk scale, because they eliminate the possibility of certain safer kinds of investment. Of course, some VCTs have never sought to conduct this sort of investment, and their strategies will be little changed (Octopus Titan VCT is a case in point: it has always focused on earlystage companies.) The impact is perhaps greater on EIS: the government’s Patient Capital Review consultation found that a majority of EIS ‘funds’ had capital preservation type objectives, versus about a quarter of VCTs.

set of changes is implemented in a way that reflects commercial reality. However, it’s reassuring to know that, at nearly 22 years old, the VCT industry has the benefit of highly experienced managers who have adapted to change in the past and continue to deliver good returns for shareholders. Over the past ten years, the average VCT has returned 89.5%, without accounting for the upfront tax relief. Performance in 2017 has also been encouraging. From the beginning of the year to the end of November, the average VCT returned 7.1%. Much of this return is in the form of tax-free dividends.

VCT managers are very adaptable. Since the 2015 rule changes we have seen some, such as NVM, hiring new staff to refocus their businesses on the kind of areas demanded by the new rules. We’ve also seen some managers (especially those who were focused on lower-risk investments) reduce their fundraising targets, or choose to raise nothing at all, if they don’t think they can put the money to work effectively.

VCTs have always been higher-risk. The generous tax reliefs on offer shouldn’t blind anyone to the nature of the underlying investments, which are small, ambitious UK businesses that won’t all succeed. But the VCT structure makes it easy to access a professionally managed, diversified portfolio of these businesses, with the transparency of a London-listed investment company and the reassurance of an independent board.

It’s likely that the new requirement to invest money faster will add to this caution: raising too much, too quickly could make your performance suffer, and hence your reputation: no VCT manager wants that.

For advisers, it’s more important than ever to be alert to when fundraisings are being launched – smaller ones from popular managers will fill up in days, not weeks.

Investors can also get a sense that they are putting money to work where it is really needed, helping UK businesses to grow and create jobs. An HMRC investigation in 2016 concluded that VCTs and EIS were operating as originally intended ‘in terms of how investments are used, bridging finance gaps and wider effects on investees’. An AIC report released last year showed that VCT-backed businesses had created 27,000 jobs since the first investment by a VCT, a figure likely to be much understated because data was not available for all businesses. That’s surely something we can all get behind.

Getting behind VCTs At the AIC, we’ll continue to liaise with the government and industry to ensure that this latest

GB Investment Magazine · February 2018

27

2018: PRESENTING OPPORTUNITIES FOR ALTERNATIVE INVESTMENTS Darius McDermott, Managing Director of Chelsea Financial Services, looks ahead to the opportunities for alternative investing in 2018 2017 was an interesting year for VCT managers to say the least.

They’ve had to abide by key changes made by the government in 2015 as to which companies they can or cannot invest in, as well as contend with rumours that their much-coveted 30% tax break would be slashed to 20% in the next Budget.

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GB Investment Magazine · February 2018

Of course, another key concern when investing in UK companies is Brexit uncertainty and the impact this could have on entrepreneurs’ appetite to grow their companies and seek capital.

Less of a risk

also believes the potential for special dividends – which are achieved when there are strong exits – remains on the cards for select companies.

Despite these fears, VCTs have actually done well throughout 2017.

Many of the vehicles we invest in have been increasing the amount of capital they have reallocated over the last 12 months, as they tend to favour companies which offer secular growth stories irrespective of the broader economy.

While some sectors – such as utilities and consumer staples are more likely to be impacted by rising interest rates or inflation for instance, companies which are driven by people looking to exploit new technology or untapped markets should have a much better chance at thriving amid an uncertain UK backdrop.

Hugi Clark, Director of evergreen generalist VCT Foresight, expects the vehicles to continue targeting a 5% annual income yield and

“VCTs (and EISs for that matter) remain a unique investment opportunity for private investors while just as importantly continuing to support UK business,” he said. “The attraction of these products has meant that between April and October this year, VCT inflows were up 100% against the same period last year, and we would expect total fundraising for VCTs to exceed £800 million in the 2017/18 tax year, which would be the sector’s highest ever.”

Chris Hutchinson, Manager of the Unicorn AIM VCT, also has a positive outlook for dividend income for 2018, which is currently being reflected in his portfolio.

“Crucially we are now receiving a significant proportion of the VCT’s required annual dividend payment from the growing income being received from our underlying investee companies,” he said. “Approximately twothirds of our qualifying portfolio pay a dividend themselves, which should stand us in good stead going forward.”

While concerns surrounding the removal of assetbacking from investments and sectoral exclusions plagued investors before this year’s Budget, the team at Puma Investments said these risks have been curtailed - at least for the short-to-medium term.

“There is little doubt that the pre-Budget rumour-mongering created a degree of ‘fog’ in the VCT market, causing many investors to, quite rightly, hold fire on their VCT and EIS investing until after the Budget,” it said.

“Now that the Budget has passed and there were no changes made to available tax relief, the ‘fog’ has lifted. The changes that were implemented still allow for a large scope of VCT and EIS investments to be made.”

Now, the team said the qualifying investment criteria in order to receive VCT funding is for risk-to-capital to be greater than the initial tax relief available. It also pointed out that the business in question must now actively seek growth and development.

“Puma Investments does not consider the addition of the ‘riskto-capital’ condition alongside the ‘business growth and development’ condition to be an issue for its investment strategy,” the team continued.

“Indeed, we consider that the majority of the VCT-qualifying investments Puma has made in the recent months to qualify under the new rules.”

GB Investment Magazine · February 2018

29

2018: PRESENTING OPPORTUNITIES FOR ALTERNATIVE INVESTMENTS

Grandfathering rules

Fund raising fears

Elsewhere, the team said the government’s abolition of older VCTs’ ‘grandfathering rules’ which allowed them to invest in companies under rules in place at the time funds were raised will not affect Puma’s VCT 13 fund as it launches a brand new VCT each time.

Despite some industry optimism regarding the new rule changes, Clark warned investors to bear in mind that fund-raising within VCTs has been strong over the last 18 months. This means that several VCTs are now sat on substantial sums of uninvested cash.

“Under the new grandfathering rules, VCTs will still be able to invest into companies that own assets, including property,” the team explained. “They can continue to invest by way of a mixture of subscriptions for new equity and debt, although the loan element can no longer be secured.

“Puma VCT 13’s investment remit and the depth of the long-standing Puma investment team should provide us with a substantial deal flow of established, revenue generating companies with experienced management.”

Hutchinson pointed out that recent changes to VCT legislation are going to continue focusing attention on the strength of the fund manager’s deal flow and their ability to efficiently deploy capital into attractive, qualifying opportunities at sensible valuations.

“Unicorn is seeing no shortage of interesting opportunities and is a strong position to negotiate on hard on initial valuation,” he added.

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GB Investment Magazine · February 2018

“This has a number of implications for investors, not least cash drag putting pressure on yield, as well as generating increased competition for the best deals which has the impact of driving up prices,” the Director said.

“At Foresight our rate of deployment has been strong – we have made investments of around £53 million into eighteen companies from our VCTs and institutional funds in the past twelve months and have reviewed more than 900 investment opportunities in the same time period. This is an increase of 80% on the previous year.”

Clark also warned investors against forgetting about the 2015 changes to legislation, as these will remain a potential headwind for VCT investors in 2018.

“It has put increased pressure on those VCT managers who do not have access to institutional capital as it closes the door to management buy-outs and buy-ins,” he explained.

“Again at Foresight we have been able to co-invest our VCT funds alongside our regional investment funds, the £40 million Foresight

Nottingham Fund and £39 million Foresight Regional Investment Fund, giving us access to equity release transactions.”

It hasn’t been plain sailing for all VCTs following the legislation changes, however. One example of a VCT which we believe has dealt particularly well with the changes is Maven, which historically invested heavily in management buy-outs and has therefore changed its process significantly, having now moved into the generalist sector.

It has also since recruited three new employees with doctorates in specialist market areas and who are therefore able to identify lucrative deals in under-researched sectors.

Buy-out bother Elsewhere, generalist VCT Mobeus was particularly hard-hit by the ruling that management buy-outs would no longer be a qualifying investment. As a result, it didn’t raise capital from between December 2014 and autumn this month as it completely changed its investment process.

Since the changes, Mobeus has made the second-greatest individual number of investments within generalist sector and has also invested the second-greatest sum of money at £31 million.

As with Maven, we believe they have rolled with the punches well and their legacy book of managementbuy-outs could present itself as a good risk buffer for new investors.

Cast a bigger shadow.

We plan. We create. We write. We design. We develop. But best of all, we get you noticed. Give us a call if you need some Wow in your business.

thewowfactory.co.uk

01622 851639

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Amount to be Raised: Unlimited

TIME:CTC (Corporate Trading Companies) TIME:CTC is a bespoke Inheritance Tax (IHT) solution for corporate investors, which boasts an impressive 22 year track record of delivering IHT relief for investors. TIME:CTC is aimed at business owners who have built up surplus cash in their business and could potentially lose Business Relief (BR).

The focus of TIME:CTC is on capital preservation by investing in asset backed businesses which qualify for BR. These businesses include secured lending, renewable energy, biomass and self-storage. Our strategy allows business owners to maintain control of their assets, avoiding the need for trusts or gifting to obtain relief.

T. 020 7391 4747 E. questions@time-investments.com www.time-investments.com

BR Open

Evergreen

Close

Evergreen

Amount to be Raised: Unlimited

Targeting a return of 3.5% and potentially immediate reinstatement of BR qualifying assets. To date more than 1,000 of our clients have exited and achieved BR. Special Offer: Zero AMC for the life of the investments on all cases submitted by 31 March 2018.

TIME:AIM TIME:AIM uses our unique ‘smart passive’ approach in selecting companies listed on AIM for inclusion within the investment portfolios we create for investors. Designed to offer lower volatility returns than the AIM market, TIME:AIM will only target AIM listed companies that qualify for BR. SMART because we use an innovative, defensive market screening process PASSIVE because we remove stock picker bias and ignore market sentiment A welcome secondary benefit of this approach is that we are able to offer this service with a lower annual management fee than traditional AIM BR fund managers. We believe our service creates a robust portfolio that will allow investors the opportunity for significant growth potential and mitigation of their IHT liability after only two years.

• Available within an ISA and non-ISA wrapper

T. 020 7391 4747 E. questions@time-investments.com www.time-investments.com

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• IHT relief in just two years • Focus on reducing volatility • Removal of stock picker bias • Lower cost than traditional AIM services

GB Investment Magazine · February 2018

Open Offers

EIS Open

Evergreen

Close

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

Close

Evergreen

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

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

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), Monebox (digital savings) and Eporta (online marketplace).

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 small-scale power generating equipment, property construction and renewable energy assets.

Over time, other assets will be added to the portfolio.

NOTE: No initial fee or dealing fee is payable on investments made before 31 March 2018.

GB Investment Magazine · February 2018

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Open Offers

EIS Open

Evergreen

Close

Evergreen

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

T. 01865 860760 E. investment@oxcp.com www.oxcp.com

EIS

Evergreen

SEIS

Special Opportunities

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

Oxford Capital Media EIS The Oxford Capital Media EIS invests in companies operating in the UK’s creative sectors, focusing on business models where risks can be managed through robust commercial contracts.

The Media EIS targets a return to investors of up to £1.20 per £1 invested, not including the beneficial impact of EIS tax reliefs. The minimum holding period is expected to be four years.

The most recent tranche invested in film sales agents. These companies acquire the right to act as sales agents for a number of independent films, earning revenues from the sale of distribution rights. Using this model, the companies are entitled to be paid from some of the first revenues generated by each film. As such, the companies are not exposed to the risks of box office failure, and they can make a positive return even from films which only recover part of their production budget.

A new tranche is expected to open before the end of the calendar year.

Iron Box Capital: Particle 1 Fund Film is a fast growing industry. There is insatiable demand for film globally to provide material for all the new media that offer films. Investing in film is also approved by the government through the availability of both tax credits and EIS tax benefits. Unsurprising as it brings many millions of revenues into the UK. At Iron Box Capital we pride ourselves in our expertise and experience, and to do all that we do very well. After all, our Chairman is Colin Brown, the ex-British Film Commissioner.

Through Particle 1 Fund, investors will participate in 3 or 4 films, all of which are closely vetted for genre, audience appeal and saleability.

The target IRR before tax relief is 15%, and 25% if you include the tax relief available.

T. 020 7628 7857 E. info@ironboxcapital.com www.ironboxcapital.com

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And we should mention that you can have a lot of fun with film. Every investor and their adviser can get involved in our film projects in different ways. Why not talk to us to find out more?

Please refer to the Investment Memorandum for full details and risk warnings.

GB Investment Magazine · February 2018

Open Offers

EIS Open

01/08/2013

Close

N/A

Amount to be Raised: Uncapped

Deepbridge - Technology Growth EIS The Deepbridge Technology Growth EIS represents an opportunity for investors to participate in a portfolio of actively-managed growth-stage technology companies, taking advantage of the potential tax benefits available under the Enterprise Investment Scheme. The Deepbridge Technology Growth EIS is a diversified portfolio of actively managed highgrowth companies seeking commercialisation funding. The Deepbridge EIS invests in companies that have a proven technology, clear intellectual property and are operating in a high growth/high value market sector.

Focused on investing in high growth companies that are seeking to commercialise and expand, specifically in three sectors: • Energy and resource innovation; • Medical technology • IT-based technology

T. 01244 746000 www.deepbridgecapital.com

SEIS Open

01/07/2015

Close

N/A

Amount to be Raised: Uncapped

The target return for the Deepbridge Technology Growth EIS 22.9% p.a. over a minimum of three years; representing mid-case capital growth of 160p returned for every 100p invested. To ensure maximum tax efficiency for the investor, the Deepbridge EIS is entirely investor-fee free at point of investment.

The Deepbridge Life Sciences SEIS The Deepbridge Life Sciences SEIS is an opportunity to secure potentially attractive returns by investing in a diversified portfolio of early-stage life science companies, whilst taking advantage of the considerable income tax, capital gains tax, and inheritance tax benefits available under the Seed Enterprise Investment Scheme.

The Deepbridge Life Sciences SEIS seeks to fund companies with exciting new technologies that satisfy the needs of large and growing markets. The overarching focus of the Deepbridge Life Sciences SEIS offers investors companies engaged in the development of therapeutics for the following areas: • Anti-viral drug discovery and development • Antibiotic drug discovery and development • Neurodegenerative disease therapeutics • Cancer diagnostics and therapeutics • Autoimmune and other metabolic disorders therapies

T. 01244 746000 www.deepbridgecapital.com

The target return for the Deepbridge Life Sciences SEIS is >35% over a minimum of five years; representing mid-case capital growth of 250p returned for every 100p invested. To ensure maximum tax efficiency for the investor, the Deepbridge Life Sciences SEIS is entirely investor-fee free at point of investment.

GB Investment Magazine · February 2018

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BR Open

01/07/2015

Close

N/A

Amount to be Raised: Uncapped

Deepbridge IHT Service The Deepbridge IHT Service is designed to deliver capital preservation from a portfolio of Business Relief qualifying renewable energy companies that seek to have a high degree of asset-backing and a business model based on the Renewables Obligation, the UK Government subsidies for the generation of renewable energy. Utilising Business Relief, subscriptions may be eligible for exemption from IHT after a minimum of two years.

The Deepbridge IHT Service has a target priority return of 6% per annum after the second year.

T. 01244 746000 www.deepbridgecapital.com

IHT Open

Evergreen

BPR Close

Evergreen

Minimum Investment: £30,000

Fundamental T. 01923 713 890 E. enquiries@fundamentalasset.com www.fundamentalasset.com

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Investment criteria: • Attractive subsidies: The UK Government offers subsidies to the renewable energy sector, including Renewable Obligation Certificates and Feed-in-Tariffs.

• No planning risk: Investments will be made in projects with all the necessary permissions in place, providing a known cost base for the investment.

• Proven technology: The use of proven renewable energy technologies that allow levels of energy production to be forecast with a good level of accuracy.

Fundamental AIM IHT Portfolio Fundamental Asset Management is an independent, owner managed, investment management firm with an unrivalled knowledge of the AIM market. It has successfully provided AIM portfolio management with inheritance tax planning to private investors, trusts and institutions since 2004 delivering outstanding returns.

Our investment ethos for AIM IHT Portfolios is conservative and value based. At its foundation is our in-depth, in-house research, which includes visiting and meeting senior management of hundreds of companies each year. As well as being available on its own broker platform the Fundamental AIM IHT Portfolio service can also be accessed through the AXA Elevate, Nucleus, Standard Life and Transact platforms.

GB Investment Magazine · February 2018

Open Open Offers Offers

EIS Open

10/01/18

SEIS Close

30/06/18

Amount to be Raised: £2.75m Minimum Investment: £5,000

T. 020 7071 3945 E. enquiries@growthinvest.com https://growthinvest.com /investment-opportunities/

EIS Open

Now

SEIS Close

N/A

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

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

Dorset County Distilling Co Hutch & Alex Wright established Dorset County Distilling Co’s concept in 2015 and over years have carried out extensive research, completed distillers courses, and more, to fine-tune the concept.

Located on a farm nestled in a picturesque North Dorset valley, the distillery will be using German technology, be environmentally responsible & source suppliers locally to produce premium brands of unique flavoured Dorset malt and rye whisky, gin, rum, vodka and eau de vies.

The ‘English whisky’ industry is still in its infancy. There are allegedly around 14 whisky distilleries in England, of which only four are substantial non-micro producers. The Springhead Distillery would be the only substantial West Country whisky distiller and the fifth midsize facility.

This creates an exciting investment opportunity exclusively available on the GrowthInvest platform.

Oxford Technology Combined SEIS and EIS Fund OT(S)EIS 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 30 June 2017, 70 investments had been made in 28 companies. The statistics are: • Gross amount invested £3.75m • Tax refunds to investors £1.52m • Net cost of investments £2.23m • Fair value £6.26m • Tax free gain (on paper only) £4.03m OT(S)EIS remains open for investment at any time. The latest quarterly report, with a page of information on each investment is downloadable from www.oxfordtechnology.com

GB Investment Magazine · February 2018

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Open Offers

EIS Open

Evergreen

SEIS Close

Evergreen

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

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 peace-of-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

EIS Open

April 2017

SEIS Close

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

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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.

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.

GB Investment Magazine · February 2018

ACQUISITION ACQUISITION AND AND SALES SALES

O O FF IIFA FA BB U U SS II N N EE SSSSEESS Retirement?

Retirement?

Time Time for for aa change? change?

There There are are countless countless reasons reasons to to dispose dispose of of an an IFA IFA business, business, just just as as there there are are countless countless reasons reasons to to get get hold hold of of one. one.

W E A R E A SPECIA L I ST F I NANC IAL S A L E S , CO N S U LTA N CY A N D BR O KE R AGE B US I N ES S .

W E A R E A S P E C I A L I ST F I N A N C I A L S A L E S , C O N S U LTA N C Y A N D B R O K E R AG E B U S I N E S S .

Gunner & Co.’s mission is to work directly with you, whether you are looking to realise the Gunner toyou workaredirectly whether you are looking to realise the capital & in Co.’ yours mission business,isor lookingwith for you, growth through a merger or acquisition. capital in your business, or you are looking for growth through a merger or acquisition.

We consider every business to be unique, and therefore finding the right solution for We consider business to be unique, and business thereforeoperations finding theand right solution for you starts with aevery thorough understanding of your your wish list. you starts with a thorough understanding of your business operations and your wish Only from here can we make valuable introductions which align to both party’s needs.list.

Only from here can we make valuable introductions which align to both party’s needs.

If you would like to discuss options to sell, exit or retire, or acquire IfIFA youbusinesses, would likeplease to discuss to sell, exit or retire, or acquire get inoptions touch for a confidential discussion.

IFA businesses, please get in touch for a confidential discussion.

louise.jeffreys@gunnerandco.com louise.jeffreys@gunnerandco.com

gunnerandco.com gunnerandco.com

EIS Launch

12/09/17

SEIS Close

05/03/18

Amount to be Raised: £3m Minimum Investment: £10,000

Cape Cod Cellars Ltd Cape Cod Cellars, “Martha’s Other Vineyard” is a new company created to build Cape Cod Cellars (“CCC”), into a premier aspiration, lifestyle brand.

We will deliver the Nantucket, Martha’s Vineyard and Cape Cod seafood and lifestyle cuisine to London and Europe. We will deliver this feeling to our consumers through our flagship Cape Cod Cellars Café & Wine Bar, our Apparel and Merchandise and eventually, distributing our own wine brands (Chatham Chardonnay, Nantucket Red, Schooner’s Sauvignon Blanc etc.).

Our online marketplace will be commensurate with the themes of the flagship Cape Cod Cellars Café & Wine Bar and, in particular, a scalable aspect of the business. Already in production, our golden silk scarves with the Cape Cod Cellars brand to cuff links, necklaces, wind breakers, even corduroys with our logo lining the pockets, Cape Cod Cellars will be hip, smart, cool and upscale.

When a couple or a group of friends walk into our landmark CCC Café & Wine Bar, we want them to travel back to a time of their childhood or adulthood, fondly recalling great memories on Nantucket, Martha’s Vineyard or Chatham.

Wide brown wood floors will be complimented with nautical oil paintings, dunes, red picket fencing, images of lighthouses, and a sailboat hanging from the ceiling.

T. 07917 767 362 E. tim@capecodcellars.co.uk www.capecodcellars.co.uk

EIS Open

January 2015

EIS Close

Evergreen

Amount to be Raised: Unlimited

Above the circular, mahogany bar will be portholes with waves flowing behind them. It will be bright, optimistic, memorable and upscale.

For Barclays banking details, email tim@capecodcellars.co.uk

CHF Enterprises CHF Enterprises Ltd (CHF) presents an exciting and unique opportunity for UK tax payers to invest in both SEIS and EIS qualifying shows and concepts, whilst also benefitting from risk mitigation in the form of seed and traditional EIS reliefs and Government backed Animation Tax Credits.

The company has a strong and proven track record: over the past 40 years, Cosgrove Hall have produced iconic children’s programmes such as Danger Mouse, Postman Pat, Roary the Racing Car and others, and CHF has a multi BAFTA and International Emmy award winning creative team.

One of its recent shows, Pip Ahoy! was funded via CHF’s own in-house EIS offering and is now on air on Channel 5’s Milkshake every weekday for 5 years, to great media acclaim.

T. +44 (0)845 512 1000 E. nicolajohnston@chfmedia.com www.chfenterprises.co.uk

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The shows and concepts may have multiple revenue streams from Broadcast and License and Merchandising sales with unlimited investment returns. Shows are produced in the UK and should qualify for the Government’s Animation Tax Credits.

GB Investment Magazine · February 2018

Open Offers

EIS Open

Close

2012

Evergreen

Amount to be Raised: Unlimited Minimum Investment: £20,000

Par Syndicate EIS Fund The Par Syndicate EIS Fund (“the Fund”) is a growth company focused EIS fund, targeting opportunities across a range of technology sub-sectors.

Fund manager Par Equity has been investing in this area since 2009 and has developed a distinctive and successful investment model. As well as the Fund, Par Equity serves a large and active business angel group, the Par Syndicate. This expert investor group brings through its members sector knowledge as well as business expertise.

The Fund therefore invests alongside, and on the same terms as, experienced industry insiders, so benefiting from a high quality flow of investment opportunities. Typically, companies invested in will be developing or exploiting an innovative technology and aiming at a global market.

T. 0131 523 1057 E. pauline.cassie@parequity.com www.parequity.com

EIS Open

July 2017

Close

June 2018

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

Returns are expected to take the form of outright sales of portfolio companies, with an average holding period of around seven years. The Fund’s benchmark return is 15% per annum after all fees and charges but before tax. Par Equity secured its first exit in 2012 and the Fund, having started investing in 2012, had its first exit in 2016.

Calculus Capital EIS Fund Pioneers of tax efficient investing, Calculus Capital created the UK’s first approved EIS Fund in 1999. Our 18 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 economic cycle.

Winners of ‘Best EIS Fund Manager’ at the EIS Association Awards for the past three consecutive years, Calculus Capital 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 EIS Fund focuses on established companies with growth potential, across a diverse range of sectors. Target companies have 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

The 18 month investment programme commences after relevant closing date. The next close is taking place 27 April 2018.

We value our reputation for personal service as much as our investment record, and are focused on providing an excellent client experience. Please get in touch to find out more. 020 7493 4940.

GB Investment Magazine · February 2018

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EIS Open

Now

SEIS Open

Now

Amount to be Raised: Uncapped Minimum Investment: £5,000

Seed Advantage SEIS and EIS Funds Seed Mentors has been successfully involved in Seed EIS since it was first introduced in 2012.

Since then they have successfully promoted and closed 11 funds, and invested in over 60 exciting young companies. All companies continue to trade.

The fund structure is a discrete investment portfolio service operated through the Fund Manager, Amersham Investment Management Ltd. The Funds adopt as whole of market, holistic approach.

Seed Mentors provide practical support and mentoring services to each company and a nominated director. The EIS fund offers the opportunity to support companies that have previously received SEIS funding, and are now looking for capital for growth and expansion.

T. 0203 011 0901 E. s.randall@seedmentors.co.uk www.seedmentors.co.uk

EIS Launch

May 2017

SEIS Close

Evergreen

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

Seed Mentors have now extended the range of funds on offer with the Boxing Advantage Company.

In a joint venture with the legendary Barry McGuigan, investors can invest in a portfolio of highly promising boxers through the Seed Advantage EIS Fund.

The boxers will be selected and trained by Barry McGuigan and his team.

Jenson SEIS & EIS Fund The Fund targets exciting, innovative and disruptive technologies that are nurtured alongside existing investments (in the current SEIS investee company portfolio) which are ready for follow-on funding to fully exploit commercialisation of a proven business model, via the EIS. Our combined SEIS and EIS structure is designed to provide increased diversification as a portfolio investment; whilst the balance between capital growth, portfolio risk and time horizon is maximised, along with enhancing the tax advantages available.

Jenson is a pioneer of SEIS Investments, investing since 2012 and with over 80 investments (£12 million) to date. They actively advise entrepreneurs to re-evaluate business models, reduce projected costs and introduce potential executives, partners, customers and suppliers as part of the value add service they provide. Jenson aims to offer these businesses far more than just funding.

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

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The Investee support programme provides financial and operational assistance to investee companies - enhancing returns, a key differentiator between Jenson and other SEIS and EIS providers.

The Jenson SEIS and EIS Fund allows investors to choose whether they want to invest solely via SEIS or EIS or to split their funds across SEIS and EIS investments, enabling the investor to maximise the tax advantages.

GB Investment Magazine · February 2018

Open Offers

EIS Open

Close

Now

N/A

Amount to be Raised: £4m Minimum Investment: £10,000

T. 0203 8978 861 E. sarah@goldfinchentertainment.com www.goldfinchentertainment.com

SEIS Open

Now

Close

Multiple

Amount to be Raised: £3m Minimum Investment: £5,000

Goldfinch Entertainment EIS Fund • Approved EIS Fund with 70% Protection • Investing into qualifying Film & TV productions • Protection is taken in the form of unsold territories, Government Tax Credits or guarantees • £2m raised in 2015/16 • Built and run by a team with enviable business and industry experience • Team has deployed £60m+ since inception • Over 115 projects at various stages of development and financing • BAFTA and Oscar winning producers and directors • A List cast attached such as Orlando Bloom, Bill Nighy, Sir John Hurt, Charles Dance, David Tennant and Martin Freeman • Shortlisted TWICE CONSECUTIVELY for the ‘Game Changer’ Growth Investor Award • Managed by industry veterans Amersham Investment Management

Goldfinch Entertainment SEIS Fund • Approved SEIS Fund qualifying investment opportunities in the UK’s film, TV and other entertainment sectors.

• Investing into UK Film (30%), TV (30%) and Video Games (30%) • £2.5m raised in 2015/16 • Built and run by a team with enviable business and industry experience • Team has deployed £60m+ since inception • Over 115 projects at various stages of development and financing • BAFTA and Oscar winning producers, directors and developers.

T. 0203 8978 861 E. sarah@goldfinchentertainment.com www.goldfinchentertainment.com

• A List cast attached such as Orlando Bloom, Bill Nighy, Sir John Hurt, Charles Dance, David Tennant and Martin Freeman • Shortlisted TWICE CONSECUTIVELY for the ‘Game Changer’ Growth Investor Award • Managed by industry veterans Kin Capital Partners

GB Investment Magazine · February 2018

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IHT Open

Evergreen

BPR Close

Evergreen

Minimum Investment: £20,000

ESP AiM ESP AiM is a simple estate planning solution that provides full inheritance tax relief after two years.

Stellar employs award-winning stockbroker Pilling & Co to create a diversified portfolio of mature AiM listed companies.

ESP AiM is one of the most diversified portfolios currently available; with 40 companies held across eight of the ten major AiM sectors.

With a focus on wealth preservation, ESP AiM holds established AiM companies with an average market cap of more than £600m.

ESP AiM has a nine-year performance track record and has consistently out-performed the AiM index since 2010, with growth of 130% over the last five years.

Available in an ISA wrapper, clients can keep their existing ISA benefits to create a tax-efficient portfolio free from income, capital gains and inheritance tax.

T. 020 3907 6984 E. enquiries@stellar-am.com www.stellar-am.com

IHT Open

Evergreen

BPR Close

Evergreen

Minimum Investment: £25,000

ESP AiM is available on a high number of wrap platforms to make it even easier for advisers to consolidate clients’ existing portfolios for estate planning.

Investors can also choose to insure their investment from day one with our ESP AiM+ option.

ESP Income ESP Income is unique in the marketplace because it helps clients mitigate their inheritance tax liability without sacrificing a regular income stream to support their lifestyle.

Structured as a discretionary portfolio that generates a regular income of 4.5% per annum, in addition to providing full inheritance tax relief after two years.

Capital is diversified across trading activities that offer a high level of capital security and the ability to generate a natural yield. Currently these sectors include hotels, renewables and construction finance.

Income is paid as a dividend and distributed to investors twice a year.

It is important to note that the underlying investments generate the income investors receive and it is not a distribution of capital, therefore the principal investment amount is protected to be passed on to beneficiaries.

T. 020 3907 6984 E. enquiries@stellar-am.com www.stellar-am.com

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With an increasing life expectancy in the UK, later life income is becoming more important to some clients.

ESP Income can help clients seeking to supplement their pension income, as a replacement to ISA income or as an alternative to an annuity.

GB Investment Magazine · February 2018

Open Offers

IHT

BPR

Open

Close

Evergreen

Evergreen

Minimum Investment: £40,000

ESP Growth ESP Growth is one of the most diversified asset-backed IHT portfolios available and clients can access six trading areas that are uncorrelated to equities and offer a high level of security with low volatility to minimise investment risk.

It has been carefully designed for clients seeking inheritance tax relief after two years with a focus on wealth preservation and capital growth.

These trading activities include commercial forestry, farming, hotels and residential development; importantly investors can choose to exclude any trades they want, to avoid over-exposure.

ESP Growth is structured so that the client is in full control of their capital.

On application we incorporate a trading company in your client’s name of which they are the sole shareholder. Capital is then invested in a diversified blend of trading activities which all qualify for full inheritance tax relief after two years.

T. 020 3907 6984 E. enquiries@stellar-am.com www.stellar-am.com

SITR Open

Feb 2016

Close

Evergreen

Amount to be Raised: £5m Minimum Investment: £25,000 (smaller investments accepted at Fund Manager’s discretion)

The single company structure of ESP Growth makes it easy for clients to earmark legacies for their children by creating separate companies for each child to inherit.

ESP Growth has a net target return of 5% per annum and this is uncapped so if the trading assets outperform this target, your clients will reap the rewards.

Resonance Bristol SITR Fund The Resonance Bristol SITR Fund is one of the first investment funds in the country to benefit from Social Investment Tax Relief (SITR), enabling 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.

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.

Resonance has over 15 years of experience in arranging investment into social enterprises, and now has over £150m under management through seven 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.

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

After a successful first 12 months of the Resonance Bristol SITR Fund, Resonance is also now launching a series of regionally focused SITR Funds across the UK (the next being launched in the West Midlands in Autumn 2017).

GB Investment Magazine · February 2018

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EIS Open

Close

07.04.17

06.04.18

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

Guinness AIM EIS The Guinness 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 with 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.

The Guinness AIM EIS is an HMRC approved fund so that investors receive 1 EIS 5 certificate for all holdings once the portfolio is invested.

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

EIS Open

19.09.16

Close

Evergreen

Amount to be Raised: £40m Minimum Investment: £20,000

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.

Guinness EIS The Guinness EIS seeks to invest in three to six investee companies to create a portfolio of investments across a range of sectors.

Characteristics favoured by the investment management team are as follows: • Businesses in leisure and services sector with strong balance sheets.

Examples include gyms, trampoline parks, pubs, crematoria and nurseries.

• Businesses with good visibility on cashflows - i.e. businesses with longer term contracts to provide predictability of future earnings. Examples are waste management, recycling or data centres.

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

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• Businesses requiring capital to purchase stock and equipment.

Successful businesses often require additional funds to expand their working capital. We prize businesses with high value stock such as luxury goods dealers.

The Guinness EIS is an Evergreen service with tranche closures at the end of each quarter.

GB Investment Magazine · February 2018

Open Offers

DMS Open

January 2015

Close

Evergreen

Amount to be Raised: Unlimited Minimum Investment: N/A

Property Partner Discretionary Managed Service (DMS) Property Partner is the UK’s largest property investment platform and stock exchange, allowing investors to take a view on property assets, diversify their portfolio easily, and manage their market exposure at the click of a button.

Residential property is a popular investment with a strong track record, but it is not always easy to access. Our purpose is to bring accessibility, simplicity, and liquidity to this asset class. Our proposition makes it really simple for investors to diversify across multiple properties, in multiple locations, with multiple tenants, thereby reducing risk, and also removing all of the hassle associated with traditional buy-to-let. This includes tenant management, ongoing maintenance, and the significant legal and administrative burdens.

Property Partner’s Discretionary Managed Service allows your clients to own their share in a number of properties of their choosing, in line with specific investment criteria. Investors will also earn 5% interest on un-invested capital.

Income is paid monthly in the form of a dividend, and investors can sell their holdings whenever they like on the resale market.

Property Partner is the new way for advisers to engage with clients about buy-to-let. Please get in touch for more details about how to apply.

T. 0203 457 2471 E. john.oliver@propertypartner.co www.propertypartner.co

Property Partner™ is the trading name of London House Exchange Limited, which is authorised and regulated by the Financial Conduct Authority (No. 613499). Capital at risk. The value of your investment can go down as well as up. The Financial Services Compensation Scheme (FSCS) protects the cash held in your Property Partner account, however the investments that you make through Property Partner are not protected by the FSCS in the event that you do not receive back the amount that you have invested. Forecasts are not a reliable indicator of future performance. Gross rent, dividends and capital growth may be lower than estimated. 5 yearly exit protection or exit on platform subject to price & demand. Property Partner does not provide tax or investment advice and any general information is provided to help you make your own informed decisions. Customers are advised to obtain appropriate tax or investment advice where necessary.

GB Investment Magazine · February 2018

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M AGAZINE

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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

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