A Very Important Date | GBI 08 | April 2018 by Clifton Media Lab

FOR PROFESSIONAL INVESTMENT SPECIALISTS

"OH MY EARS AND WHISKERS"

M AGAZINE

GOVERNMENT BACKED - GREAT BRITISH INVESTMENTS - EIS - SEIS - BR - SITR - VCT

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GrowthInvest: Simplifying tax efficient investments. Igniting the UK economy. The tax efficient investment market has changed significantly in recent years. With tax efficiencies being clearly directed toward growing the UK’s most promising young companies, there has never been a better time to get involved.

products, or perhaps considering them for your clients’ portfolios, contact us at GrowthInvest. We’ll show you how you can consolidate historic investments onto our platform and build a diversified portfolio from a wide range of tax efficient product providers.

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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

VCT managers: how to spot

Jack Rose, Head of Tax Products at LightBridge Partners, reveals how to pick a VCT Manager

the good, the bad and the ugly How well do you know your

Andrew Aldridge, Head of Marketing at Deepbridge Capital, explains why advisers need to know their investment manager

EIS manager?

Patient Capital Review: sharpening the focus around VCTs

Paul Latham, Managing Director of Octopus Investments, explores government attitudes to alternative investments following PCR

Film Club

Training the lens on investments with movie star qualities

Film Round Table

Insightful and informative articles emerging from key topics raised. All the news and insight from the GBI Magazine Film Round Table in Belfast

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

M AGAZINE

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

Commissioning Editor: Michelle McGagh Publishing director: Alex Sullivan alex.sullivan@ifamagazine.com Design: The Wow Factory www.thewowfactory.co.uk

Full subscription details and eligibility criteria are available at www.gbinvestments.co.uk ©2018. 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 decades 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.

IHT SERVICE

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 an investment management service that invests in asset-backed renewable energy opportunities, targeting a 6% yield p.a. after the second year.

01244 746000 www.deepbridgecapital.com Deepbridge House, Honeycomb East, Chester Business Park, Chester, CH4 9QN

I N N O V AT I O N

Deepbridge Innovation SEIS*

Deepbridge Life Sciences SEIS*

Early-stage investment in emerging technology companies sourced from highly regarded partners and an extensive deal flow network.

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

Deepbridge Advisers Limited is registered in England & Wales, Company No. 08614835. Registered Office: Deepbridge House, Honeycomb East, Chester Business Park, Chester CH4 9QN. Deepbridge Advisers Limited (FRN: 609786) is an appointed representative of Enterprise Investment Partners LLP which is authorised and regulated by the Financial Conduct Authority (FRN: 604439). Deepbridge Advisers Limited is a subsidiary of Deepbridge Capital LLP, a limited liability partnership registered in England & Wales, No. OC356449.

* Risk warning – The underlying investments of these propositions are both illiquid and high risk, not suitable for all investors and investors should not consider investing unless they can aff ord the full loss of their investment. As EIS / SEIS investments are 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 Enterprise Investment 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. Tax treatment depends on the individual circumstances of each investor and may be subject to change in future. The availability of tax reliefs depends on the Company invested in maintaining its qualifying status. Investment in unquoted companies carries high risks. Past performance is not a reliable indicator of future performance.

192882344/03

“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

A CHANGE OF CLIMATE So how was the spring for you? The snow, the biting Siberian wind, the late daffodils, the extra snow, the cancelled trains, the stranded motorway drivers, and then that final extra dollop of snow just to make sure we’d really had enough of it? Yes, I’ve really had enough of it too. Maybe it would have been different if the financial markets had been surging ahead on the back of a confident world with a Prime Minister and a US President who both managed to exude authority and competence? And maybe it would have been nice if those two other presidents, in Russia and in China, hadn’t been doubling down on their own respective power bases while we agonised? How else can we explain why the dollar is mysteriously falling while US interest rates are rising? Is it true that $50 trillion of cash is currently sitting on the equity sidelines like vultures on a fence? And why haven’t bond yields risen faster, even though the ending of quantitative easing says that they logically must? No, I don’t know, either. Probably it’s because the prospect of a US-launched trade war is so deeply unsettling for both very large and very small companies across Europe and the UK. Probably Britain’s globally underperforming stock market reflects Brexit worries, in more mysterious ways than we can figure. Here’s my tinfoil hat theory, and I don’t even care if you laugh. The weathermen tell us that the Beast from the East hit us because the winter Jet Stream reversed its usual direction and started turning clockwise, so that Kent and Cornwall got Siberia while Greenland got Tenerife. Why did it do that? I’m told it was all down to La Niña, the counterpart of El Niño, which was reversing its usual polarities, or something like that. I bet it spoke Mexican, anyway. No wonder it was in such a hurry to make it up north and forge a strategic link with Canada. Agent Scully, the truth is out there somewhere.

Here at GBI Magazine, we find our loyalties momentarily divided. On the one hand, we have campaigned ceaselessly for the move back toward risk. It was what made the EIS and SEIS movement so great, and it’s helped British companies to achieve a cutting-edge advantage that puts them streets ahead of their continental rivals. It rewards courage, commitment and ingenuity, which is how it’s meant to be. On the other, it would be somewhat graceless of us not to acknowledge that reducing risk is quite high on some of your clients’ agendas. Accordingly, this issue of GBI Magazine feels a little duty bound to lament a door that’s about to close. There are valuable opportunities out there to be seized, and some of them won’t be there on 6 April.

Another New Proposal But we don’t know all the details yet. As we were going to press, the Chancellor announced a consultation on a new form of collectivised EIS project that’s aimed at the wealthiest investors. It will either (a) offer a full exemption from all dividend taxation on ‘knowledge-intensive’ businesses; (b) allow investors in these funds to permanently kill off a capital gains tax (CGT) bill from elsewhere instead of just deferring it, as at present; or (c) stretch the qualifying back-period for which CGT relief or EIS investment relief can be claimed to earlier years – instead of restricting reief to the year in which the investment was made. A big draw for property investors, apparently. Or (d) all of those things. We’re expecting more after the consultation period ends on 11 May. Another date for the White Rabbit diary. Michael Wilson, Editor in Chief

A Very Important Date Closer to home, we have a change of climate in alternative investment that doesn’t leave quite so much to my lurid imagination. And which won’t wait for any man, weather system or alien intelligence. Time is running out, and this particular white rabbit will be disappearing down its burrow on 6 April. Yes, the impact of last year’s Patient Capital Review is about to hit us squarely in the portfolio, with the next stage of the Treasury’s requirement that EIS and VCT investment should be funnelled into knowledge-intensive businesses, and not just into safe-play capital preservation projects that rely on solid capital assets or other safe-play gambits. Sharpen up your risk balance, the Chancellor says, and you get a £2 million EIS allowance for being more adventurous. But stay with the risk aversion policy and you’re yesterday’s man. For shame!

GB Investment Magazine · April 2018

News

Spring Statement: response from Director General, EIS Association Mark Brownridge, Director General of the EISA, said: “Following the Chancellor’s announcement that spending is back in surplus, the EIS Association (EISA) welcomes the action being taken by the Government to support and increase investment into small businesses across the UK, especially as we move towards leaving the European Union. “With a review into late payments and £80 million made available to firms seeking apprentices, it is clear that the government is taking into account the concerns of British business. EISA’s new report details the impact of Brexit on early stage and scale-up deal flow, in addition to investor sentiment towards the UK private sector. “The report reveals that over a quarter of investors believe that Brexit will benefit knowledge-intensive companies, such as those in the fintech and medtech sectors, so the announcement of a new consultation

GB Investment Magazine · April 2018

into the creation of knowledge-intensive funds is both timely and in the interests of SMEs. “Ahead of the doubled investment cap following Royal Assent, the EISA also welcomes the Chancellor’s changes made to the EIS. An estimated £7 billion of additional investment is due to be unlocked following the doubling of the EIS investment cap for knowledge-intensive companies; an additional £7 billion of investment that will flow directly into the innovative, creative companies that will be the architects of a post-Brexit Britain. “EISA is similarly welcoming of the new “risk to capital” condition, which will reduce taxavoidance motivated investments and instead allow the focus to shift towards the investors who are providing crucial early-stage and scale-up funding to the UK SME community.

News

VCTs reach funding milestone The latest data shows that Venture Capital Trusts (VCTs) have raised a record breaking amount of funds, overtaking last year’s total VCT fundraise a month before the tax year end.

to the buy-to-let market. As these areas become squeezed, people are increasingly looking to VCTs to provide them with a credible way of investing in a tax efficient manner.

A month before the end of the tax year and over £541 million had been invested into VCTs, ahead of the £540 million raised by the end of the previous year.

“In the last few years we’ve seen more and more people invest in VCTs throughout the year but we still expect to see a seasonal inflow towards the end of tax year end as people get their finances in order ahead of the new tax year. It’s a record breaking year for VCTs as more investors look to access the benefits of investing in the growth potential of smaller companies and the tax reliefs that VCTs offer.

As of 12 March 2018, VCT fundraising has not reached £550 million. Managing Director of Octopus Investments Paul Latham said: “The ever-growing demand for VCTs is not surprising when you consider the recent changes to pensions legislation, restrictions on the lifetime allowance and

“The government has clearly recognised the huge role VCTs can play in addressing

the UK’s funding gap and has acted to ensure investment is focused where it is needed most. The good news is that we are seeing significant appetite among investors for this type of early stage investment, something that Octopus Titan has focused consistently on over the past decade.” Octopus Titan is the UK’s largest VCT and reached its initial fundraise target of £120 million within just four months. It is now offering an additional £80 million of fundraising capacity to meet investor demand ahead of tax year end. The target of £200 million will be the largest ever fundraise by a VCT and, once fully subscribed, would increase the total fund size to over £600 million.

GB Investment Magazine · April 2018

News

Time for a top up: now is the time to invest in fine wine The market for fine wine has racked up its third consecutive year of gains, according to The Wine Investment Fund. The Liv-ex 100 index, the fine wine exchange and the industry’s leading benchmark, closed up 5.66% at the end of 2017. The Liv-ex Investables index gained 5.68%. Market exposure, the value of all live bids and offers, reached £48 million and the bid-to-offer ratio remained above one throughout the year. For Bordeaux wines the ratio now stands at 1.8 with almost twice as much value on the buy-side. The fund said that a bid:offer ratio of 0.5 or higher has historically indicated an upward trend in the market or at least acted as a signal for price stability. Trade on Liv-ex broadened in 2017 with over 8,000 active markets and more merchants than ever before trading on the exchange. The returning demand of traditional markets such as the US and Asia has continued to be driven by weak Sterling relative to the US dollar and Euro (important because the secondary market for investment grade wines is GBP denominated) and the ever-growing demand for the world’s best wines. UK merchant BI Wines and Spirits “have seen a continued increase in volume sales of physical vintages, especially of Bordeaux, particularly to Asia” in 2017. The Far East Increased attendance - up 2.3% on 2016 - at the 2017 Hong Kong International Wine & Spirits Fair and the newly introduced preferential measures for wine imports from Hong Kong into mainland China (an increase in the number of ports available, expediting clearance improvements and developments in the accounting of duty, recognising the growth in wine imports to China) are positive signs of stable demand in the Far East. In addition, the European Union and Japan have reached agreement on a free-trade deal which will eliminate tariffs on imports of EU goods, including wine, to Japan. The country is already one of the top five markets for EU wine in general and Bordeaux

GB Investment Magazine · April 2018

in particular and any increase in demand could have significant positive effects on prices. Demand from the Far East has not just been for the purchase of fine wines, but also for the purchase of chateaux, with over 100 properties in Bordeaux now under Asian ownership, suggesting a continuing commitment to the region. Results from the main auction houses throughout 2017 have repeatedly been above the high estimates and global demand has been a prominent feature: Sotheby’s reported total sales of £64 million in 2017 and sales in New York featured strong bidding from North America, accounting for 50% of sales and Asian buyers made up 45% of sales. First Growth Bordeaux were sold at 20% over the high estimate. Wine Owners, a business and collector trading platform, said : “Wine’s performance was driven by exceptionally strong growth in key areas across the world and in particular the resurgence of the top Bordeaux chateaux, which form the backbone of most investment cellars.” The top 20 merchants sold approximately £85 million of wine in 2017 – up 46% on 2016 – with US wine merchant JJ Buckley reporting their largest ever campaign. Bordeaux producers have continually been reported to be holding back the majority of production and tightened supply of new vintages. For example, the 2016 vintage was larger in volume than 2015, but only a similar number of cases have ended up in the UK. This has driven demand across a range of physical vintages. Paul Pong of Hong Kong based merchant Altaya Wines found difficulties sourcing volume and believes “chateaux are releasing little to no supply for their first tranche”. The tightening of supply and rejuvenated demand emphasises the market’s low volatility and the fund believes that this will continue to put upward pressure on pricing. The fund said optimism surrounding the 2015/16 vintages and a broadening market make it an attractive time to invest in fine wine and it offers an important opportunity to diversify into an asset backed market and a hedge against returning inflation.

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Before investing in the Calculus VCT or Calculus EIS Fund, you should read their respective Prospectus and Information Memorandum carefully and take professional advice. EIS and VCT are long term investments, and their value can fall as well as rise. Any person making a subscription to the VCT or EIS Fund must be able to bear the associated risks.

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THE NEW KIDS ON THE BLOCK An investment showcase bringing you the newest offerings from the sector Investment: Arie Capital Technology Aim: Investing in next generation high technology Tell us about the fund Arie Capital has a track record of successfully raising and investing funds in technology-focused companies. With staff in London, Los Angeles, Paris, Tel Aviv and Beijing, we have developed a global investment network and are now offering UK investors the Arie Capital Technology EIS. With a focus on next generation high technology, we see excellent opportunities to participate in what we believe is the most disruptive and interesting sector of our time. Our team has experience investing in low cost satellite technology, consumer electronics, big data, Internet of Things (IoT), smartphone applications, med-tech and telecommunications. We see value in companies that have strong and scalable intellectual property (IP). Many of the opportunities we review are not broadly available to UK investors. We seek to change this by offering a discretionary EIS portfolio service that benefits from our experience in EIS, due diligence, company mentorship and all other commercial aspects. We are aiming to create an investment that is both interesting and rewarding to hold. Central to the fund’s approach is seeing a proof of concept, whether it is evidenced in established revenues, strategic partnerships or a compelling minimum viable product. Investing after a business

GB Investment Magazine · April 2018

has established its proof of concept helps to both reduce the risk associated with early phase technology and assist us in accelerating the commercial development of the product. The fund’s investee companies will be required to have a business-oriented management team with a credible track record of performance. Arie will seek to work with entrepreneurs who have shown success in their vertical and can replicate their approach and monetise opportunities. Taking the role of company mentor, Arie will seek to take a hands-on approach to manage risk and maximise potential commercial opportunities of the investee companies. The combined experience of the team in raising capital, managing intellectual property and business development, presents the potential for the fund’s investee companies with an opportunity to grow into new markets that might otherwise have been limited. The key members of Arie are its founding partners Simon Tobelem, a globally experienced investment, advisory and business development professional, with extensive experience in capital raising, structuring and exits and Stephen Margolis, a qualified lawyer with over 35 years’ experience in financing and alternative assets.

Arie has appointed the highly-awarded Sapphire Capital Partners as its Financial Conduct Authority regulated investment manager, providing an independent layer of compliance to the fund.

6. An ability to have support institutional fund of Arie Capital 7.

from

the

Perhaps most importantly – has the ability to both grow on its own and also has connectivity with other investments that Arie has made and thereby establish synergistic connections between the investments.

To align the interests of Arie and its investors, no performance incentive is payable on any investment until investors receive cash proceeds in excess of £1.35 for every £1.00 invested. The performance fee will be charged at 20% on the amount of the increase over and above £1.35 (based on a £1.00 investment). The 20% performance fee will be split 16% to Arie and 4% to Sapphire Capital Partners.

What is the minimum investment?

How much is being raised?

£2 for every £1 invested excluding tax reliefs after a minimum of five years.

Aggregate subscriptions of £10 million unless increased or decreased at the absolute discretion of the investment manager.

Provide details of the top three fund holdings

What type of investments are being sought? The fund that will provide private investors access to a selection of EIS advance assurance approved, innovative growth companies that have an established proof of concept and commercial viability. The fund will seek to source opportunities in the areas of; •

Medical technologies

•

Smartphone applications

•

Fintech

•

Big data and the IoT

£10,000 and multiples of £1,000 What is the targeted return?

Being its first fund, Arie Capital Technology EIS does not have any existing holdings. However, the institutional fund of Arie Capital, made the following investments in 2017, which are indicative of the investment theme of the EIS offering; Redux: an audio and Haptics solutions (kinesthetic communication that recreates the sense of touch by applying forces, vibration, or motions) for mass market applications. Satixfy: a satellite broadband chips manufacturer enabling doubling satellite coverage capacity.

In putting the initial portfolio of investments together, we had a general eye to each company;

Flo Data: a big data management platform specialising in the M2M industrial space.

1. Having a proof of concept,

Oasis Smart Sim: an embedded SIM card designer and solutions provider for secure element in connected devices.

2. Revenues or about to have revenues, 3. A barrier to entry, 4. Capable management, 5.

A B2B approach at some level so that we can best assess its viability amongst its competitive landscape,

Integra Holdings: focusing and commercialising life sciences intellectual property from Hebrew University. EyeSight: a home automation through powerful all-software gesture recognition technology. JobJob: a location-based mobile app for the hourly-wage industries. Peratech: provides 3D force-touch solutions for next-generation human-machine interfaces. Of the above, Arie Capital as exited one company at a 2.3x multiple within five months and an unaudited IRR of 142%.

GB Investment Magazine · April 2018

VCT MANAGERS: HOW TO SPOT THE GOOD, THE BAD, AND THE UGLY Jack Rose, Head of Tax Products at LightBridge Partners, reveals how to pick a VCT manager who has what it takes even with two months still to go before 5 April, fundraising for VCTs had already seen records tumble this year and as things stand it shows no signs of slowing down. Estimates from Tilney indicate over £500 million has now been raised with £300 million of capacity still remaining. So we could possibly be on for the largest ever year for VCTs, certainly since the initial income tax relief was set at 30%.

Supporting smaller businesses The VCT market is now reasonably mature, having been established to encourage investment into smaller companies. It is this investment in SMEs where the tax benefits of a VCT come into play – as they are designed to compensate for the increased risk associated with investing in smaller, less liquid companies. The tax incentives for VCT investors include 30% income tax relief on the initial investment, subject to a maximum of £200,000 per investor and a five year minimum holding period. Plus, dividends paid are tax free and there is no capital gains tax (CGT) to pay when the VCT is sold. However, in the current record-low interest rate environment and with continuing pressures on pensions for many; it is the tax free income of a VCT which makes them attractive for the majority of investors. As VCTs become increasingly popular driven by pension restrictions, more advisers are considering them for their clients. So if you’re considering investing in a VCT, how do you spot a good manager?

Spotting potential A good VCT manager needs lots of experience and specialist expertise to spot real potential for success in a small business. There are lots of SMEs looking for funding, so a good VCT manager needs to be able to sort the wheat from the chaff. Often this involves meeting the management team and getting under the bonnet of the business and the investment team must be well

GB Investment Magazine · April 2018

resourced, as this company research can be very time consuming. The manager will be following a robust, disciplined and proven investment process founded on relevant experience in the underlying asset class in question, whether that be the AIM, infrastructure finance or growth capital for example. One indication of whether the manager ‘has what it takes’ is by looking for a proven deal flow, with a track record of positive investment outcomes – where the underlying companies have achieved or exceeded market expectations. That way you’ll know if they can spot a business that has the potential for success, even perhaps to become a future household name.

Playing by the rules The rules the manager must adhere to in order to maintain a VCT’s qualifying status are becoming increasingly complicated, especially after rule changes last year. It is important to choose an experienced manager who understands the rules to the letter and manages the VCT accordingly. The rule changes have had implications on which investee companies will qualify for VCT investment. This has focused and narrowed the potential investment universe, which may have implications for a manager’s deal flow. It is important to be clear on a manager’s ability to deploy new monies into appropriate qualifying investments that fit the VCT’s mandate. Looking at whether a VCT manager’s deal flow is appropriate to the level of fundraising they are seeking will be critical to ensure they are not overstretching themselves and putting themselves under pressure to invest the capital. Because of the numerous rules which VCTs must adhere to, in order to qualify for tax breaks, it is important to choose an experienced manager with relevant expertise.

Choosing a VCT

Matching investment objectives

There are four main types of VCT, so it is important to understand the differences. They all invest in smaller UK companies but the market splits them into Generalist VCTs, AIM VCTs, Specialist VCTs and Limited Life or Planned Exit VCTs. Each of these will have their individual investment approach, risk and return profile, so each will suit different investors according to their needs and their risk appetite.

It is important to consider the investor’s requirements and match their investment objective to the type of VCT selected – the manager’s strategy and the structure of the VCT must fit the investor’s requirements. An experienced manager focused on a specific sector often builds a high level of expertise that can translate into investment success.

Generalist VCTs As the name suggests, they invest in a general portfolio of companies across the smaller and private equity universe, often across multiple sectors.

AIM VCTs Focus on companies listed on the AIM market. These are the only listed companies (daily priced) that “qualify” under VCT rules. AIM has been around since 1995 and is now a mature exchange, with more than +£90bn raised with c. 1,100 companies operating in +100 countries across 40 sectors

Specialist VCTs Focus on companies in a specific sector, such as renewable energy, leisure, media or technology, where the manager believes they have an edge.

Limited Life or Planned Exit VCTs Similar to Generalist VCTs but tend to focus on lower risk, lower return companies with the main objectives of capital preservation and providing liquidity as soon as possible after the minimum five year holding period.

Sustained dividends VCTs are sometimes mistakenly considered as being solely focused on achieving returns through capital growth, but in reality many VCTs deliver regular income via tax-free dividend payments. Look for a manager who has delivered sustained dividend flow, usually most effectively combined with a mature portfolio. VCTs can have a variety of different income profiles from those that pay a consistent and regular dividend to those that look to pay larger ad-hoc special dividends alongside a much lower regular dividend. Finding a VCT with an income profile matched to your client’s requirements is crucial. Investors considering a VCT as a supplementary pension planning tool may be better suited to a VCT with a track record of consistent dividend payments, especially the older investor. Younger investors who are less reliant on regular income might prefer something that offers the opportunity of some special, but less consistent, dividends. At the end of the day it’s up to the client and their requirements, but looking at a dividend track record of any VCT should help.

New offer or top up? One last thing to consider when considering a VCT manager is whether theirs is a new offer, or a top-up offer. A new offer will be for a new share class of an existing VCT (VCTs can have multiple share classes with different pools of assets), while a top-up will offer the opportunity to gain exposure to an existing portfolio of assets within a share class of a VCT. Again it depends on the preferences of a client, but both have merits and drawbacks, according to what you are looking for.

Meeting investor needs Without doubt there have been a number of significant changes to VCT legislation in the last two years, putting additional pressures on managers and their deal flow, while at the same time the demand for VCTs continues to grow and shows no signs of slowing. Advisers do need to carefully consider the merits of a VCT and its manager, to ensure both match investor needs – so knowing how to spot a good VCT manager is a definite benefit.

GB Investment Magazine · April 2018

HOW WELL DO YOU KNOW YOUR EIS MANAGER? Budget changes mean advisers need to know their investment manager better than ever, says Andrew Aldridge, Head of Marketing at Deepbridge Capital Being an adviser comes with a whole raft of responsibilities; too many to list here, but let’s agree that there is not a task undertaken that doesn’t put a significant amount of pressure on you, the professional, to get things right. In the financial services world, we rightly talk a lot about ‘knowing your client’ with a whole series of processes and systems in place to help advisers’ understand their wants and needs, their motivations, their attitude to risk, and what they would like to achieve over all kinds of timescales. Clearly, having this information provides the adviser with the knowledge to make appropriate recommendations and to steer the client in the right direction. Within the EIS and SEIS sector it is imperative that advisers marry up their client knowledge with ‘knowing their investment manager.’ In a sector where the managers vary in their approach, where the manager may have a direct influence on the performance of investee companies and in a sector which has undergone a considerable amount of change recently it is absolutely important to know your investment manager. We are fortunate that due to our commitment to investing in innovative growth companies we have not had to alter how we operate at all following the EIS changes that were announced in last year’s Autumn Budget, but we appreciate that it hasn’t been so straightforward for many of our peers and making investment comparisons is not always plain sailing for advisers.

Know the investment criteria However, in the EIS and SEIS sector I don’t believe it is possible to ‘overegg the pudding’ in terms of ensuring advisers have a deep understanding of an investment manager’s investment criteria; how and why they are investing in the companies they choose to invest in, being comfortable with how robust that criteria is and, rather importantly, appreciating the differences/similarities and sometimes ‘blurred lines’ that some managers employ with both their EIS and SEIS investments.

GB Investment Magazine · April 2018

It is our approach that EIS and SEIS investments should be treated separately, and I’d suggest that managers who believe otherwise could be in danger of running into trouble. EIS and SEIS may well be viewed as two sides of the same coin – and the industry might well be too inclined to marry them up together for ease of understanding – but EIS and SEIS investments should not be treated the same, even if there are mechanisms for SEIS investee companies to make the transition to EIS investment. Of course EIS and SEIS investing should both be treated as high risk, but all parties need to understand what they are investing in, and the likelihood of potentially far greater risks when it comes to SEIS companies, which by definition are early (seed) stage– hence, the enhanced tax reliefs offered by government on SEIS.

Different growth stages It is for these very reasons that we separate our EIS and SEIS products – we want advisers and clients to know exactly what they are investing in and at what stage they are investing, for example, our EIS investments are going to be much later-stage operations than SEIS. If we are looking at seed funding for a business this is likely to be very early in proceedings; it could just be a great idea, and the brains behind this idea are then going to utilising the funding to create a minimal viable product (MVP), or they are going to use the cash to explore the research and development required to get to this stage, or perhaps they are a little further down the road and need the funds to establish initial commercial sales. With our EIS propositions, the investee must be further along their commercialisation path, and the likelihood is they will have completed at least some (if not all) of those stages outlined above. If a company does not have any of those stages completed, it means they’re unlikely to be an EIS investment for us. As mentioned above, companies can, and do, make the SEIS-to-EIS graduation, but there are different considerations to be made in terms of securing investment – for example, our SEIS investee companies have to meet key milestones before they can graduate up to EIS.

Core sectors

A different approach

Our concentration as an investment manager is in two sectors – technology and life sciences – and in some circumstances firms may cross-fertilise, but there will be certain ‘core’ criteria that we are looking to be met for EIS regardless of the investment or the sector they’re in. For instance, a majority of our technology EIS companies will be receiving commercial revenues before we begin investing – this is to prove they are beyond the ‘good idea’ stage that we would associate with SEIS firms, and that they have evidenced there is a genuine commercial market for their product and/or service.

Ultimately, we believe that developing young growth companies requires a very different approach to mainstream investing. We are committed to providing pro-active support to investee companies and handson management. This ethos is something that our serial advisers buy in to and appreciate. By knowing our team and our investment criteria they are reassured that their clients’ EIS/SEIS investments are being managed in a manner conducive to growth companies.

The specific criteria we expect to be met by companies will vary, depending on the proposition itself and the stage they are at, plus (as mentioned) it may differ depending on the sector, but advisers should be aware there are a number of overarching criteria, that we like to see in any business. Some of these are: • A robust intellectual property strategy – this is essentially the ‘asset’ we are investing in and we will want to ensure it is protected as robustly as possible.

Hopefully, that gives you a little insight into what an investment manager in the EIS/SEIS might be looking for when it comes to making its investments. If we can convey how we operate, and what is important to us, then this should provide a greater degree of reassurance to both you and your clients. Managers should also be helping bring to life the underlying investments for you by sharing their passion for their investees – if the manager is investing in line with the real spirit of EIS then it should be easy to be excited about the innovations receiving investment. That excitement, with an experienced team and sector experience, should mean there is a far greater chance of success for all.

• Global scalability – in the US they say that the product/service on offer is ‘globalisable.’ We are looking at the potential within a company to deliver an offer that could be commercially adopted not just in this country but across multiple countries. • Multiple vertical markets – products which have multiple uses or multiple target-sectors are appealing to us as they offer the potential for far greater scalability and potentially a greater number of exit opportunities for our investors. • A clear exit strategy – under EIS rules, companies cannot have a predefined exit. However at the outset we can have a good idea about how a company might exit in due course, be that a trade sale or an IPO, and with this in mind we can gain a far better understanding about what the market for such an exit looks like and how it behaves. This is also likely to influence our valuation expectations at the outset. •

A great team – this might seem like it goes without saying but it can still be overlooked. Other than the intellectual property of the business, the other asset we are essentially backing is ‘the team.’ They have to be engaged, passionate and committed to the same goals as us. They also have to be exitfocused, rather than looking to create a lifestyle business. As we work hand-in-glove with investee companies, providing a range of hands-on support and resources, we need to ensure the team is one we want to work with. And of course that works both ways– if we don’t have a constructive relationship when handing out the investment cheques then it’s highly unlikely we are going to get on further down the line if there might need to be some home truths said.

GB Investment Magazine · April 2018

PATIENT CAPITAL REVIEW: SHARPENING THE FOCUS AROUND VCTS The government has used the Patient Capital Review to make it explicitly clear what it expects from alternative investing, says Paul Latham, Managing Director of Octopus Investments The government’s Patient Capital Review, announced in November 2016, looked at how best to make sure innovative firms can access the capital they need to scale up. A year later, the 2017 Autumn Budget gave us the first indications of its impact. We can get a good idea of the government’s priorities in this area by looking at how the most recent Budget affects VCTs. It was good to see the government assert the importance of rewarding investors for taking on the risks of backing early stage companies. There was no change to the tax reliefs VCTs offer, meaning VCT investors can still benefit from income tax relief, as well as tax-free dividends and capital gains. The Budget did announce some technical changes for VCTs. The good news is these don’t impact investors. Instead, they’re aimed at ensuring VCT funds direct capital to innovative and growth companies in a timely manner. For example, the Budget singled out knowledgeintensive companies for special treatment. This reflects a finding from the Patient Capital Review that these kinds of companies need the most financial support. Knowledge-intensive companies will be able to raise up to £10 million each year from VCTs, an increase from £5 million at present. To encourage investment managers to direct more capital to high-growth businesses, the Budget also introduced the following changes: • At least 30% of all new funds raised after 5 April 2018 will need to be invested in qualifying holdings within twelve months of end of the accounting period in which the VCT issues its shares. •

From 6 April 2019, the proportion of funds that VCTs must hold in qualifying investments rises from 70% to 80%.

In addition, VCTs will have more time to reinvest or distribute gains when they sell an investment. Currently, they have six months to do this. From 6

GB Investment Magazine · April 2018

April 2019 this will double to 12 months. This will give VCTs more flexibility, and more time to re-invest money properly into deals that fit the mandate.

A clear focus on growth, not capital preservation These sorts of tweaks are fairly normal for VCTs, and experienced providers will be very used to accommodating them. What’s more, they represent a continuation of broader changes that were already well underway before the Patient Capital Review kicked off. What’s become clear from recent Budgets is that the government wants to make sure tax efficient investments are directing long-term capital into genuine growth companies, and not into schemes more geared towards capital preservation. In the case of VCTs, the 2017 Budget included an announcement that VCTs can no longer offer secured loans to investee companies. Any loans must be unsecured, and any returns on loan capital above 10% must represent no more than a commercial return on the principal. Before that, the 2015 Budget included the removal of so-called ‘grandfathering’. This was the mechanism by which VCTs have been able to invest in ways that were allowed when that money was raised, even if they wouldn’t be permitted for money raised now. Grandfathering provisions will end from 6 April 2018. The 2015 Budget also introduced higher investment and headcount limits for knowledge-intensive companies. These are companies that meet certain conditions about how many skilled employees they have and how much innovative activity they undertake. They tend to have high research and development costs, which is why they qualify for additional funding support. All these changes will help to accelerate the shift towards growth-focused investing.

Finding a growth-focused VCT In truth, encouraging growth investing has always been the core purpose of tax-efficient investments like VCTs. What we’re seeing is the government tweaking the rules to maintain and sharpen this focus. There’s no radical shift h ere. However, recent rule changes do mean it’s more important than ever to find a VCT manager with expertise in finding early stage companies with high growth potential. So how do you do that? Well, let’s start by looking at the different types of VCTs available. Generalist VCTs, which covers most VCTs available today, invest in unquoted companies across a range of different sectors. They have significant flexibility to invest where they believe the best opportunities are, because they’re not restricted to particular sectors. AIM VCTs invest in companies listed on the AIM. An AIM listing means portfolio companies have to meet minimum regulatory and governance requirements, and conform to higher levels of reporting than unlisted companies. AIMlisted companies can also be easier to sell than unquoted companies. The third VCT category is specialist VCTs, which operate within a specific sector or market, such as environmental, infrastructure, and technology. They are often smaller in size, due to the sector restrictions on available investments, and can have higher fixed costs relative to the size of the fund. But they also have the potential to do particularly well if that chosen sector outperforms.

to prefer raising funds from managers with a proven track record of previous successes, and who can offer additional support beyond the money they put in. That can include follow-on funding, helping entrepreneurs develop valuable contacts, as well as offering mentoring, for example when a business wants to break into overseas markets. As well as finding a VCT that can find the best investments, you want to be confident the managers will make the most of their successes. Look for VCTs that have made several successful exits. VCT providers have an obvious incentive to talk about their successes, so if they’re not, you should wonder why.

For the right investors, VCTs offer great opportunities The government’s commitment to supporting innovative businesses is good news for the UK economy, and good news for investors too. The entrepreneurial scene is thriving, so investors comfortable with the risks of VCTs can get exposure to some really exciting early stage businesses. At Octopus Investments we’ve launched a record-breaking fundraise this year for Octopus Titan VCT, the UK’s largest VCT, as we look to double the number of investments we make into qualifying companies. Of course, investors need to be aware VCTs put their capital at risk, so they may not get back the full amount they put in. Tax treatments depend on individual circumstances and may change in future, and tax reliefs depend on the VCT maintaining its VCT-qualifying status.

There’s no right or wrong answer when it comes to a VCT’s structure. What you’re looking for, especially in light of recent rule changes, is a VCT that’s specifically set up to invest in small companies with high growth potential.

Also, because there’s a limited secondary market for VCT shares, they can be harder to sell than other shares listed on the main market of the London Stock Exchange. It’s also important recognise that investments in small, unquoted companies can be more volatile.

One reason is that it’s important for managers to have access to the best deals. This can be a challenge, particularly when it comes to unquoted companies whose shares don’t trade on a stock exchange. Entrepreneurs tend

To sum up, then, the government appears committed to rewarding investors for taking on these risks, as part of its broader effort to direct more capital to innovative, high growth potential companies.

GB Investment Magazine · April 2018

FILM CLUB Turning the lens on investments with movie star qualities

Fund: Various Manager: SyndicateRoom

Tell us about the fund SyndicateRoom is a UK equity investment platform aiming to connect ambitious investors with the country’s most trailblazing companies. Started in 2013, it has rapidly grown to more than 100 high-growth businesses in its portfolio, from life science start-ups to the next blockbuster film. SyndicateRoom works with companies from all sectors, choosing opportunities to list based on their quality, not their industry, and allowing its broad investor base of sophisticated investors to decide whether or not to invest.

What films are in production? In March 2015, Salty by director/producer Simon West successfully raised £1.8 million with the help of SyndicateRoom investors, becoming the first ever equitycrowdfunded Hollywood movie. The film was subsequently rebranded Gun Shy and released in January 2018. The Gun Shy campaign demonstrated that equity investing can work well for independent films. Since its raise, two further film rounds have closed on the platform: Itchy Fish Film, whose classic British coming-of-age comedy The Bromley Boys is due to be released in 2018; and Boudica Indigo, with upcoming feature Kat and the Band, which is also heading up the first European initiative to redress historical gender disparities on and off screen.

GB Investment Magazine · April 2018

What film characteristics should investors look out for? Structure: before investing in a film, you need to make sure you understand the waterfall structure determining how you will exit the business. For example, a waterfall structure could prioritise use of revenue as follows: 1) repayment of loans with fixed percentage of interest; 2) investors reimbursed 100% of their initial investment; 3) 33% of profits to talent, 33% to production company and 33% to investors. Such a structure would be relatively attractive as part of a proposition since investors sit very near the top and are reimbursed their investment prior to any profit share with the production company or the talent. Completion bonds: these are a written guarantee, usually from financiers, that a motion picture will be delivered on schedule and within budget. In the event that the film goes over budget or, for some reason, threatens to remain incomplete, the guarantor will step in to deliver the product. Most will also guarantee that if the film is abandoned, the guarantor will repay fully all sums invested. Distribution: most distributors will wait until a film is complete before they offer their services, taking on the role of sales for a percentage of profits. However, a producer with a good reputation and a strong project can sometimes ‘pre-sell’ the distribution rights before production commences, paying a small percentage towards the rights once the pre-sale is agreed, with the rest payable upon delivery.

For investors, a film with pre-sales could give off a good signal. Most films seeking to sell internationally will have to commit to a sales agent/distributor at some point in production; early support from a prestigious distributor could be a good endorsement and conducive from a cash-flow perspective. Team: like with any investment opportunity, people are key. Look at the production company’s portfolio of films. By the time of funding, most film opportunities will have a production team and a director in place, maybe even a cast; look them up and research their work. Tax relief: EIS and SEIS form the cornerstone of early-stage investing, and films can benefit from these incentives the same as any other early-stage opportunity. Films can also benefit from tax credits – a rebate of up to 25% on UK-qualifying expenditure. How the company uses this money will vary; most will put it into the project, others will use it to start investor remuneration.

What is the minimum investment? The minimum investment for private opportunities listing on SyndicateRoom is £1,000.

How much has been raised? Gun Shy raised £1.8 million with the help of SyndicateRoom’s platform investors. Since then, film production companies Itchy Fish Film and Boudica Indigo have raised £492,500 and £400,000, respectively.

SyndicateRoom has helped raise more than £114 million across its private investment opportunities to date.

What return can investors expect? Due to the risky nature of early-stage equities, certain tax incentives are available for investors. EIS and SEIS help smaller, higher-risk unquoted companies raise finance by offering a series of tax reliefs to investors who purchase new shares in these companies, thereby helping lessen the amount of investor capital at risk. Gun Shy and Itchy Fish Film both raised EIS rounds, while Boudica Indigo was an SEIS opportunity. EIS investments offer the following reliefs on up to £1 million of investment made into eligible companies per year: •

Income tax relief of 30% of your investment, used in the year of investment or carried back one year

• Capital gains exemption on profits earned on shares held for a minimum of three years • Loss relief, should the company you’ve invested in fail, equivalent to your tax bracket multiplied by your ‘at-risk capital’ (the total loss on the shares once income tax relief has been accounted for) • Capital gains deferral on gains realised on the disposal of any asset which is reinvested in an EISeligible company • Inheritance tax exemption on shares held for a minimum of two years.

GB Investment Magazine · April 2018

Here’s a breakdown of how an EIS investment might pan out. COMPANY FAILS

COMPANY BREAKS EVEN

COMPANY DOUBLES IN VALUE

You invest £10,000

You receive £3,000 in income tax relief

The comany goes bust and your shares are worth £0

If after 3+ years you sell your shares for £10,000 you will owe no capital gains tax on profit

If after 3+ years you sell your shares for £20,000 you will owe no capital gains tax on profit

You receive loss relief equal to your remaining at-risk capital multiplied by your income rate.*

Your total gain is £3,000

Your total gain is £13,000

(£0 profit from the sale ples £3,000 income tax relief)

(£10,000 profit from the sale plus £3,000 income tax relief)

* At a tax bracket of 45%, the loss relief would be £7,000 x 45% = £3,150. Therefore, for £10,000 invested, your real loss is £7,000 - £3,150 = £3,850

Why is the UK film industry important? Investing in film is given short shrift in most investment circles, where conversation tends to float around select buzzwords: ‘scalable tech’, ‘the next Uber/Tinder/Deliveroo’ and, of course, ‘blockchain’. It doesn’t help that the film industry has only recently recovered from a hangover following several tax avoidance scandals going back to the noughties, frightening many investors into staying away. But perhaps now is the time for a resurgence for the industry. In 2015 UK box office revenues exceeded £1.2 billion – its highest figures on record and up 17% on the previous year. The UK is actually responsible for 7% of the world’s productions, its filmed entertainment

GB Investment Magazine · April 2018

market ranking third largest in the world (with first and second places going to, unsurprisingly, the USA and China). Between 2010 and 2015, the number of film production companies in the UK increased by 41.9% to 6,805. The UK’s top 10 independent films grossed $679 million globally in 2015 and had access to some of the world’s largest distributors, including StudioCanal, Sony and 20th Century Fox. Six of the top 20 UK independent films made it into the list of 2015 top 20 UK-qualifying films (a list topped by Star Wars), which accounted for 41% of the UK box office total and 22% of the global box office. Clearly, such dominion may well herald a big opportunity for film producers and investors alike.

FILM CLUB

A unique opportunity to invest in the fastest growing entertainment sector •

PlayFund brings together game industry experts to seek out the rising stars of the UK industry

•

We filter through hundreds of businesses to shortlist 30 companies for due diligence, and invest in 10

•

PlayFund will mentor the companies to maximise commercial potential, and build for success

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

M AGAZINE

ROUND TABLE BELFAST

GB Investment Magazine Â· April 2018

Round Table

Contributors Paul Wilson (Chair of Round Table) Chairman, IFA Magazine Publications | Clifton Media Lab | Gunner & Co Tel: M: 07515357666 E: paul.wilson@ifamagazine.com W: www.cliftonmedialab.com

David Lovell Operations Director | GrowthInvest Tel: (+44) (0)20 7071 3945 - M: (+44) (0) 7771 985187 E: David.Lovell@GrowthInvest.com W: www.growthinvest.com

Ben White Founding Director | Ober Private Clients Tel: 0333 939 8533 - 0161 5098623 E: Lizz.ewart@oberprivateclients.com W: www.oberprivateclients.com

Lizz Ewart Managing Director | Ober Private Clients Tel: 0333 939 8533 / 0161 5098623 E: Lizz.ewart@oberprivateclients.com W: www.oberprivateclients.com

Raimund Berens CEO | Iron Box Capital Tel: + 44 (0) 207 628 7857 - M: + 44 (0) 752 861 6752 E: raimund@ironboxcapital.com W: www.ironboxcapital.com

Boyd Carson Partner | Sapphire Capital Partners LLP Tel: 07917767362 E: boyd@sapphirecapitalpartners.co.uk W: www.sapphirecapitalpartners.co.uk

Mr Francis Fitzpatrick Entrepreneur

Mr Malcolm Donnelly, IFA Wellington Court Financial Services

Dr Brian Hamilton, IFA Hamilton Financial Services

E: futurumKids@gmail.com

E: malcolm@llewdonnelly.com

E: Drbhamilton@gmail.com

T: 00 353 85 8444115

T: 07973 863704

T: (0)20 7022 1787

GB Investment Magazine Âˇ April 2018

Cashing in at the cinema: how to avoid film flops Investing in film isn’t about finding the next blockbuster movie but ensuring the films you do invest in aren’t duds

Investing in the next Avatar would be a dream for film investors, but the more realistic outcome is investing in a film that generates modest returns and decent press. Blockbuster films – the original Avatar film grossed $3 billion – are rare and difficult to invest in, so investors shouldn’t get their hopes up that the film investment they make will be the next box office hit. Instead they should be focusing on making sure that the fundamentals of the film they are investing in stack up, and so do the tax breaks, according to film investing experts who joined an IFA Magazine roundtable in Belfast. Ben White, Co-Founder of Ober Private Clients, which specialises in sourcing EIS investments, says the highest priority was not so much picking a winner when investing in film but avoiding the losers - a third of the EIS investments that Ober Private Clients brings to market are film opportunities. “Avoiding losses is the highest priority,” he says. “I would rather have a modest return with good prospects for upside on a consistent basis as opposed to one in every 10 shooting the lights and the others not.” The right mix For White, the most important feature of an investment case for film investing is not that it will be a runaway success but a strong set of fundamentals, including experienced film-makers, a strong script, an

GB Investment Magazine · April 2018

established recognised brand and an investor friendly financial structure. The financial structure includes the “waterfall” which determines where investors sit in relation to profit distribution from the film.

business-to-business but, with modern technology, you can go direct to the audience if you want. But it is about the waterfall – the return of investment structure and who your final end audience is.”

“In terms of investing in feature films, our investors like to see a strong established brand or IP, with the right producers and director, a good structure, and an investor focussed finance plan and waterfall,” he says.

He adds that “a lot of people are passionate but their projects are not good so we have to drive it at all levels”.

“You can then produce an investment opportunity where risk is well mitigated and where the level of potential returns is more attractive. You can also take advantage of portfolio diversification by spreading capital across a range of film and non-film EIS.” For Raimund Berens, Producer at Iron Box Films, passion is just as important as film development due to the length of time it takes to produce a film. “For us the film development side is important and, really, it is about passion,” he says. “If you have a team and want to make a film, it takes years from initial inception to the final audience so you have to have passion.” He believes the important factors affecting the success of a film also depend on the route to market being taken. “It also depends on the route to market; traditionally it was

Berens was keen to stress that

Round Table

the film, as the underlying investment, is more important than the tax wrapper – or EIS structure – placed around it and the film must be able to stand on its own two feet. “It is also about the film itself, not the EIS,” says Berens. “The EIS is there to reduce risk for investors but it is more about whether the film can make money on its own.” While those sourcing and producing the EIS investments seek out the positives in the films being invested in, it is natural that financial planners are looking for the potential pitfalls. Looking at the figures Independent financial adviser Brian Hamilton, of Hamilton Financial Services, says discerning a return from film investing was difficult for advisers to do.

“For feature films, it is almost impossible to gauge the return because it is not like TV where X amount of people will watch TV for five hours a day. A feature film is a culmination of things,” he says, adding that this includes who stars in the film, or what Hamilton describes as “attraction magnets”.

an interesting film comes out of nowhere with almost no one in it, it is well made, becomes nominated for one of the major awards and suddenly gets huge interest.”

“In the end if comes down to money, because you can take an average script and, in the hands of a very good producer, editor, director, and one or two others, you can still make quite a good film,” says Hamilton.

This unknowable nature of film investing makes it tough for advisers to understand whether their clients will make a return on their investment. This explains the attitude that White has faced from financial advisers when trying to encourage film investment.

However, the process does not just stop with hiring the most expensive people to work on a film.

He says the perceived riskiness of film investing puts both advisers and clients off backing a movie.

The film director might make a good film but then the next critical step is to sell the film to the distributors and more and more nowadays they want to know who is in the film,” he says. “That being said, sometimes,

“I find the main obstacle that prevents investment into film is the perception from IFAs and private investors that film is a particularly risky area for investment,” says White.

GB Investment Magazine · April 2018

“It is still, even now, tarnished with the film industry’s previous involvement in aggressive tax avoidance, and more recently within EIS there has been an unhelpful trend towards a investment model of ‘£1 in and £1 out’, with the focus being on the tax relief.” He adds that the recent scandals in the film industry and HM Revenue & Customs’ (HMRC) changes in the regulations relating to film EIS have not helped the situation. “The appetite towards investing in film has not been helped by the latest scandals which have further highlighted that the film industry can be unscrupulous, which in turn impacts on an investor’s perception of investment risk” says White. “To overcome that, a new IFA or investor has to educate themselves that there are certain ways of investing into film where risk can be reduced, through careful structuring, working only with reputable film makers and being highly selective with the projects to get involved in.” Cost versus production value Berens adds that investing in TV series works in a similar way to investing in film but with the added bonus of the constant need to fill airtime. “With the exception of IP, it works in very similar ways but with TV there is basically some demand all the time,” he says. “There is always a slot to fill somewhere in some channel somewhere in the world but with film you have to create more.” For the investors who are looking purely at returns and not investing in film as a passion project, the genre that film experts say provide the best returns is horror due to the low production costs. “You put a film together and other investors outside the UK come in

GB Investment Magazine · April 2018

and we then advise people to put 2% to 10% of their risk capital in, and always in an IP film, and go for a succession,” says Berens. “The horror films are interesting as you don’t need the big stars.” David Lovell, Operations Director at EIS and SEIS platform GrowthInvest, says Jimmy Sangster and his brother Michael who worked at the home of horror, Hammer Film Productions, were “astute at picking their actors…but were able to keep their costs down”. However, he says there are two separate, and opposite, issues with costs in the film industry; those productions that do not know their costs and those who are only looking at the cost.

“This is one of the things with the film industry; the lack of financial cost information in production and then the other side of the coin, with emerging film makers who think only of production costs and don’t think beyond that,” says Lovell. “That is almost the first mistake in the business plan: no research.” He adds that there needs to be a “change in finance” when it comes to film funding. “There is a difference in what attracts private investors into the film world as opposed to the IFAs, in that private investors are drawn to a particular project and they will look at it in great detail, and it will be a special reason or person that draws them into it, while others

Round Table

might be put off by perceived risk,” says Lovell. “It might be a Billy Elliot but it probably won’t be, the private investors want to be investing in something real and different from Bond or whatever else.” Maximising returns When it comes to maximising returns, the key is to invest across a number of different films, and HMRC is keen for investors to do the same. White says HMRC has “clarified” its approach to film investing via EIS and it does not want it “to be just for a single project but across a slate of films or an ongoing business”.

However, he says Ober Private Clients does not adopt a fund approach but focuses on “single company EIS structures where the company produces several films or focuses on one film that leads to an ongoing business”. “We continue to avoid a fund structure so that EIS3 Certificates can be applied for as soon as an investor invests and so that investors can also see and choose what they are investing into.” he says. Berens says Iron Box Films operates in a similar way to Ober Private Clients “to a point”. “If we have three EIS opportunities, one will allow a spread of investment across four different areas and, because we have anticipated projects and have set them up by team and

genre, we can say which will be the first film and the rest of the investment will go across say…horror for the international market,” he says. It is not just the number of films that HMRC is looking at when it comes to EIS, it is the financial information that is being offered to investors, in particular what returns they can expect and when they can expect it. White says the changes are applicable to EIS more generally as a result of the Patient Capital Review, not just film investing. It is particularly important as it puts the emphasis back on the investment rather than looking at EIS purely from a tax perspective, and ensures that the investments are not focused on capital preservation. “The way HMRC has gone about changing the qualification criteria, not just for film but for the wider EIS market, is important,” he says. “In the past, many investors and advisers have been focusing on the tax and not focused on the underlying investment. We don’t agree with this practice, particularly as the tax relief is only a percentage of the capital outlay and there is always some risk exposure, there is also the scope to make attractive returns in a well-structured film EIS.” He adds that Ober Private Clients ensure the investment is the main focus and the tax relief is “secondary”. “Those funds that focussed mainly on tax led to a plethora of “mediocre” films being made”. “Within the British film industry, a lot of these films were being funded and made via this model of capital preservation. Whereas now, the EIS promoters and the film makers actually need to be a lot more selective about the films they get involved with, because now they really need to make sure that an underlying investment return is produced, otherwise their reputation will be seriously damaged,” he says.

GB Investment Magazine · April 2018

Why overly cautious HMRC needs to embrace film investing The film industry is important to UK Plc but the taxman isnâ&#x20AC;&#x2122;t making it easy for this sector to contribute to the economy

GB Investment Magazine Âˇ April 2018

Round Table

The changes to EIS brought about by the Patient Capital Review should have a beneficial impact on film investing but HM Revenue & Customs (HMRC) still needs to do more to boost this important tenet of the UK economy. The film industry is vitally important to the UK economy. Figures from the Office of National Statistics (ONS) released last year singled out ‘motion picture activities’ as playing a large role in the growth in UK GDP. This included production activity and income from blockbusters such as Wonder Woman and Guardians of the Galaxy. The ONS figures revealed that since 2014, the economic value of film, TV and music industries in the UK has grown a staggering 72.4%, compared to just 8.5% in the wider European Union, as Hollywood studios – attracted by generous government tax breaks – decide to shoot films and make use of world class studio facilities in the UK. The generous tax breaks are not just for the film industry, they are also for investors who are willing to fund, what they hope will be, a box office success. Investing in film via EIS and SEIS offers income tax relief of 30% and 50% respectively. Films made in the UK also qualify for film tax credits totalling 20% of budget spend that will hopefully boost the returns to investors. However, the government believed the tax reliefs were being taken advantage of with EIS and SEIS used as capital preservation vehicles rather than to invest in high-risk burgeoning businesses and adding to the UK economy. The government’s Patient Capital Review tackled this problem, rejigging the criteria for EIS and SEIS qualifying investments. Within the film industry it is hoped that instead of EIS being used to

fund middle-of-the-road films that ensure capital preservation, the alternative investment vehicle will be used to fund higher risk and potentially higher returning films that pack more of a punch. Speaking at an IFA Magazine roundtable in Belfast, Ben White, Co-Founder of Ober Private Clients, which specialises in sourcing EIS investments, says he hopes the Patient Capital Review will result in a stronger crop of films being produced in the UK, although “it is far too early to say” at the moment. “Still, I think that will be the case and it will help the British film industry because of it,” he says. “The EIS, for some years now has been allowed to fund films anywhere in the world but still the highest percentage of the funds have gone into British films and whilst there has been a handful of good productions, the majority have been mediocre.” The demands that the review brings should ensure “there is going to be a lot more focus on quality and I think that will be good for all parties; for the investors, and for the sector, and for the EIS too”. “It will start to lift the reputation not only of the film EIS sector but the global reputation of the British film industry,” says White. Independent financial adviser Brian Hamilton, says the new criteria placed on EIS through the Patient Capital Review should benefit the industry but there are some people still only interested in the net return. “Most are right to say the new HMRC criteria should lead to better investment but there are people in the industry who are only interested in the net return,” he says.

GB Investment Magazine · April 2018

“Those involved in the process may be passionate about their industry but basically the interest is on return and maybe a bit of publicity.” He adds that it is only when people have a “wider interest” in the film industry will they “take the trouble to learn a bit more about the business and realise the things that are important like scripts and directors, and certain dangers within the industry”. Qualifying for investment With the change in criteria on what qualifies for EIS and SEIS, there are fears that it will be tougher for funds to acquire advance assurance from HMRC, which provide investors with the confidence that the taxman has rubber-stamped the scheme. This confidence is especially needed when dealing with SEIS and White says HMRC understands that a film maker “will never go on to make a second film within an SEIS unless the first film was sufficiently successful to generate the capital needed fund the next”. He adds that there may not be “enough capital raised within an SEIS to make multiple films but HMRC is comfortable providing there are bona fide plans to reinvest returns into a slate or an ongoing business”. If the wider plan is in place then a film would qualify for SEIS, he says, although the current rules can never be taken for granted. “HMRC do seem to be more understanding of the challenges involved but may change their

GB Investment Magazine · April 2018

attitudes again in the future and there is the draft legislation from the Patient Capital Review to contend with at the moment. It will all depend on whether there are other changes in the future,” says White. Film investing wish list Raimund Berens, Producer at Iron Box Films, says if film producers could get HMRC to do one thing to help the film industry and the use of EIS and SEIS within it, it would be to “speed up advance assurance by having a direct communication line”. White agrees that EIS and SEIS advance assurance in film is particularly difficult to get from HMRC at present. “Bearing in mind that film is only about a third of what we do, we are finding that other EIS advance assurance we are getting back far quicker than film advance assurance,” he says. “And with EIS certificates, we are getting approvals but they are taking much longer with film and HMRC is asking many more questions on film, as opposed to non-film.” With filming having a tainted history from the days of film partnerships and tax avoidance schemes, White adds that he can understand HMRC’s caution but believes it has tipped too far the other way. “I can understand the increased scrutiny to some degree but there needs to be a balance,” he says. “I would ask HMRC to look at that, especially where the film EIS is straight forward, is

Round Table

growth focused and the company has an ongoing business plan.” “There is clearly some nervousness within HMRC that is bringing this about so hopefully that can be addressed in coming months.” David Lovell, Operations Director at EIS and SEIS platform GrowthInvest, says pre-Patient Capital Review HMRC was “still debating where it was going to draw a line in the sand” when it came to EIS and SEIS investing. “We have more certainty now but whether that impacts on the flow of the advance assurance and EIS certificates relating to film matters or not is too early to say,” he says. “There is not much evidence yet but it is early days.” He added that there is “no reason” why advance assurance for film investments should be taking longer than for non-film investments as “it is not more complicated”. Berens adds that “two or three years ago you could go into an EIS and start investing in financing” quickly. “Now we have to wait for the advance assurance as we want to be absolutely sure we have that in order to trade accordingly,” he says.

harm than good by delaying films that then struggle to make money. White says it was undeniable that there had been issues around films EIS in the lead up to the Budget and he “can understand HMRC being cautious”. However, he adds that “where there are good quality films within compliant EIS struc ture, I would have hoped HMRC would be more pragmatic”. “The HMRC view, on the issuance of EIS3 Certificates, is that commencement of trade for the film is when the principal photography commences for that particular film, but the film maker wants funding from a much earlier date,” he says. “So the current HMRC stance is one where they will not issue an EIS certificate until four months after commencement of trade, but producers would be looking for investment many months, or even a year, before that.” He says this cautious approach could be because “they know that some films run out of money”.

Overly cautious attitude

“We need an independent film world where you raise money and go through the whole process but, viewed in a different light.” says White.

The cautious attitude of HMRC when issuing advance assurance and EIS certificates is because it wants to avoid the bad press suffered by film investing in recent memory where investors lost money, but ironically it may be doing more

“They are trying to meet the need by expanding the objectives behind these schemes but not answering this problem that the film industry has; that films need funding ahead of principle photography.”

GB Investment Magazine · April 2018

Forget Netflix and chill, profit hunters want to Netflix and invest The rise of on-demand video is creating a fertile new investment opportunity for traditional film makers

Investing in film is no longer just about bankrolling box office cinema hits, the industry is looking at the returns to be made in the new markets of on-demand platforms and the big players like Netflix and Amazon Prime. Consumers’ love of video content will continue to dominate their spending habits over the next five years, according to PwC’s 2017 UK entertainment and media outlook report. It predicts the UK consumer market will be worth £33.5 billion by 2021 and individuals will spend more on video content than cinema admissions. The rise of binge-watching TV series via on-demand services and the trend to ‘Netflix and chill’ are shaping viewing habits. This change in viewing habits is combined with a population that is more technologically enabled than ever before. PwC predicts that mobile internet access will overtake fixed broadband access in 2019 and consumers will spend £1.39 billion on on-demand video in 2021 versus £1.33 billion on cinema admissions.

GB Investment Magazine · April 2018

This creates a fertile investment ground for the film industry, which can no longer assume investors only want to invest in blockbuster movies for the big screen.

a “higher demand for product” from Netflix and Amazon Prime, adding that even Facebook is believed to be looking at an ondemand platform.

Ben White, Co-Founder of Ober Private Clients, says when looking for film EIS to invest in they have to assess whether there is demand not only to show the film in cinemas and achieve sales on DVD but also to list on platforms such as Netflix and Amazon.

He says the investment deal works differently for on-demand platforms and the “pre-sales is a two-tier plan, a minimum guarantee for all rights but you can buy back the digital rights or Netflix can buy them”.

“We are finding now, when we are considering a film to invest into, and with our focus on mitigating risk, one of the key questions is whether or not a deal has been struck in key markets including the major screening on ondemand platforms like Netflix and Amazon” he says.

Understanding the opportunities

White adds that revenues from ondemand and streaming platforms recently overtook the revenues generated by film in cinema. “Now these platforms are arguably more important as a revenue stream than cinema/ theatrical, so it is extremely important for us to assess a film’s prospects on these platforms.” Raimund Berens, Producer at Iron Box Films, says that there is

The complexity around rights and deals is something that advisers and investors are not aware of when it comes to investing in film, but it is something that they need to start to comprehend as the rise of on-demand platforms means there will be more investment opportunities ahead. Independent financial adviser Brian Hamilton, says investors should be wary of film investment sales agents who “will promise you the world and turn on you at the last minute”. “It is essential that IFAs know the key aspects of this industry and it is key that HMRC is trying to do something to help,” he says.

Round Table

“But there are people with lots of money who don’t even know a good thing when they see it.” Berens is currently moving Iron Box’s most successful collaboration from movie into TV, a film called Wolf Night. It follows a little boy called Miles with a vivid imagination who is convinced there is a werewolf in his room, but while his parents dismiss his nightmares the truth behind them is more disturbing. “[It is] our most successful collaborative project which made £66 million at a cost of £12 million,” says Berens. “Wolf Night is a film maker-driven project by Guillem Morales and we are also working with the screenwriter David Freeman and a Japanese film maker. We currently have a story called Astronaut [in production] and around 50 films in development.” Ober Private Clients currently has one or two film EIS projects in development. White singles out Fairytale of New York, which is based on the backstory to the famous Christmas song of the same name. “This film has been worked on for a number of years by an A-list actor as well as an awardwinning producer and an awardwinning director,” he says. White says the team working on the project are also participating “mainly for equity so the production costs are a fraction of what they would be normally”. “In terms of risk and reward, these people, in front of and behind the camera, are all committed to make this film a success and deliver a return to the investors,” he says.

“When structuring for the film we also make sure that, within the [recoupment] waterfall, investors sit in first position, even ahead of the actors and film makers, whom are sacrificing their fees for equity or profit share” He says sitting in that position in the waterfall means “the investor receives the first part of any revenues, as well as an uncapped share of all the further revenue”. As the film is seasonal, Ober Private Clients is hoping it will be produced and released in time for Christmas 2018. The EIS has a small amount of capacity available but fast approaching closure on a raise of £3.6 million. Passion versus returns It goes without saying that investors in film EIS and SEIS want to make money but for some investors the returns can be overshadowed by their ‘passion’ for a project, which White says is dangerous territory to be in from an investment perspective. “We encourage investors to invest in the financial metrics of the EIS and not to invest primarily for their ‘passion’ but ultimately it’s their choice and some people invest more with their hearts than their heads,” he says. David Lovell, Operations Director at EIS and SEIS platform GrowthInvest, says some investors do invest for passion and the age of the investor also determines what type of film they want to invest in. “There are definitely ‘passion’ projects but most of our

investors are over 40 so they will be naturally drawn to certain types of film,” he says. “For our more dedicated investors...it is recognised that horror is a popular and profitable genre. You can also draw people into a film by the names attached to it. You can see that people are drawn to a certain type of film, even if they still analyse risk on an individual basis.” As with all types of investment, being successful in film investment requires investors to maintain a diversified portfolio. This means investing in a number of different types of EIS and if investors only want to invest in film EIS, then ensuring there is a mix of films within that portfolio. “What is key here is they have to know that if they go for a single film investment, the risk is that much higher than a diversified portfolio,” says Lovell. “As with any other investment types, in EIS there is a high risk and one way to offset the risk is not to put all your EIS money in EIS film but, if you do, diversify in different movies and different managers.” While IFAs know the importance of diversification, Berens points out that it may not always be possible for an adviser to diversify their clients’ portfolios as much as they would like. “One issue that remains to be resolved is that most IFA networks, because of their internal controls or because of their PI insurance, can only invest in certain things,” he says.

GB Investment Magazine · April 2018

M AGAZINE

OPEN OFFERS Highlighting some of the key offerings currently available to IFAs

Open Offers

EIS Open

July 2017

June 2018

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

Calculus Capital EIS Fund Pioneers of tax efficient investing, Calculus Capital created the UK’s first approved EIS Fund in 1999. Our 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 the economic cycle. Winner of ‘Best Generalist - EIS’ at the Investment Week Tax Efficiency Awards 2017/18 and 5x winner of ‘Best EIS Fund Manager’ at the EIS Association Awards, 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:

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

VCT Open

October 2017

03.04.2018

(2017/18 tax year)

31.07.2018

(2018/19 tax year)

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

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

The ability to achieve our target IRR of 20%

Experienced management teams

Successful sales with proof of concept and/or market

Profits or a clear path to profitability

Clear route to exit

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 on 020 7493 4940 or info@calculuscapital.com

Calculus Capital VCT Pioneers of tax efficient investing, Calculus Capital have a strong track record for investing in established, primarily unquoted SMEs. Our experienced investment team and thorough investment process have produced impressive dividend performance and exit returns for investors. By co-investing in selected established companies through both VCT and EIS, we are able to choose larger companies and bigger deals – reducing the risk profile of the investment. The Calculus VCT has the following characteristics: ·

Targets an annual dividend of 4.5% of NAV

Income tax relief of 30%, tax-free capital gains and dividends

Diversified portfolio, targeting 30 qualifying companies

Share certificates issued 10 days after allotment

Allotments available in both 2017/18 and 2018/19 tax years

Target 5% discount in respect to share buyback after 2020

The top up offer will be used to both invest in new companies with growth potential and provide further funding to a number of portfolio companies. 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 on 020 7493 4940 or info@calculuscapital.com

GB Investment Magazine · April 2018

BR Open

Evergreen

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

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

GB Investment Magazine · April 2018

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

Open Offers

BR Open

Now

Evergreen

Amount to be Raised: Unlimited

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

BPR / IHT Open

Evergreen

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

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

TIME:Advance TIME:Advance is a discretionary management service that allows investors to access Business Relief (BR) to mitigate their Inheritance Tax (IHT) liabilities. The service offers 100% IHT relief in just two years, alongside a targeted return of 3.5% per annum. Importantly clients retain access and control, so have the option to withdraw a lump sum or set up regular withdrawals in the form of an income. The service focuses on capital preservation by investing in asset backed businesses which qualify for BR. These businesses include secured lending, renewable energy, biomass and self-storage. The product is managed by an expert team, with a proven 22 year track record of success in achieving BR for investors. Special Offer: Zero AMC for the life of the investments on all cases submitted by 31 March 2018.

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 · April 2018

Open Offers

EIS Open

Evergreen

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

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

EIS Open

Evergreen

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

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

IHT Open

Evergreen

BPR Close

Evergreen

Minimum Investment: £30,000

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

GB Investment Magazine · April 2018

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.

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.

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.

Open Offers

EIS Open

January 2013

Evergreen

Deepbridge - Technology Growth EIS

Amount to be Raised: Uncapped

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

Minimum Investment: £10,000

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

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

SEIS Open

January 2016

Evergreen

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

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

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

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

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

GB Investment Magazine · April 2018

EIS Open

March 2017

Evergreen

Maximum Raise: Uncapped Minimum investment: £10,000

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

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

SEIS Open

Nov 2017

Evergreen

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

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

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

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

GB Investment Magazine · April 2018

Open Offers

EIS Close

Open

01.04.2017

Evergreen

Total Amount to be Raised: £3.6m Minimum Investment: £25,000 or to be negotiated as part of a portfolio’

Ober Private Clients – Fairy Tale of New York Starring Golden Globe winning actor, Kiefer Sutherland (24, Flatliners, Stand By Me, Lost Boys, A Few Good Men and Young Guns) and Kate Bosworth (Superman Returns, Still Alice and Heist), as well as an ensemble of other A-List actors, Fairy Tale of New York is a modern love story based upon the most popular Christmas song of the 21st Century. The world-class film makers, including award winning director, Lee Cleary (Hurt Locker, the X-Men films and Fantastic Four), and producer, Lisa Katselas, (producer of twice Oscar nominated Richard III), are positioning the film to appeal to a broad international audience, aided by the strong brand recognition of the title song and the extensive fan-bases of the cast. Fairy Tale of New York is expected to capture the lucrative seasonal market at Christmas time for many years to come, as one of the few credible festive films available. The subject-matter of the film also assists with the generation of ancillary revenues from soundtrack, merchandise and other commercial activities.

T. 0161 509 8622 E. lizz.ewart@oberprivateclients.com www.oberprivateclients.com

SITR Open

Feb 2016

Evergreen

(with roughly quarterly closes)

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

As a film that key cast and crew are deeply passionate and confident about, a large proportion of its costs have been substituted for equity, resulting in a budget that is significantly below production value. Investors also benefit from a priority mechanism to the point they have recouped 130% of gross capital as well as an uncapped share of the upside. For more information on this opportunity and other opportunities offered by Ober Private Clients, please contact Lizz Ewart: lizz.ewart@oberprivateclients.com THIS IS FOR INTERMEDIARY USE ONLY’

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

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

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

GB Investment Magazine · April 2018

Open Offers

EIS

SEIS

Open

10.01.2018

30.06.2018

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

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

EIS

SEIS

Open

Now

N/A

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

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

EIS Open

01.09.2017

Evergreen

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

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

GB Investment Magazine · April 2018

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 - “The Start-up 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 to 31 Dec 2017 are: • Gross amount invested by OT(S)EIS: £4.17m • Cash back to investors via tax refunds: £1.67m • Net cost of these investments after tax relief: £2.50m • Fair value: £9.15m • Tax Free gain (on paper only so far): £6.65m 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

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

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

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 · April 2018

DMS Open

January 2015

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

EIS Open

January 2015

EIS Close

Evergreen

Amount to be Raised: Unlimited

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.

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

GB Investment Magazine · April 2018

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.

Open Offers

EIS Open

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

Now

03.04.18

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

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.

Seneca Evolution EIS Approved Fund Seneca Evolution EIS is an Alternative Investment Fund, approved by HMRC under section 251 of ITA 2007. It offers investors the opportunity to invest in a portfolio of equity investments in UK based SMEs, which are seeking an injection of capital to fund their next phase of growth. At a fundraise of £10 million, the Fund will give investors a portfolio of 8 to 12 investments diversified by sector. It targets investment returns of £1.60 to £1.80 per £1 invested (excluding tax reliefs). The Manager is targeting full investment by mid-November which should mean investors receive their EIS 5 certificate in time for January 2019 tax returns. This Fund complements Seneca’s EIS Portfolio Service which has so far raised £50 million and made over 60 investments.

T. 020 7071 3926 E. seneca@lightbridgepartners.co.uk www.lightbridgepartners.co.uk

Seneca Partners, is part of the wider Seneca business, which has c. £650m of funds under management. The knowledge, experience and pedigree of Seneca’s investment team, combined with their individual track records of successful investing in SMEs, is complimented by an extensive deal flow network in the UK’s SME heartlands of northern England and the West Midlands.

GB Investment Magazine · April 2018

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

GB Investment Magazine · April 2018

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.

Open Offers

EIS

SEIS

Open

Now

Next close 30.03.18

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

THE

T. 07528616752 E. raimund@ironboxcapital.com www.ironboxcapital.com

SEIS Now

Alive in the Morning Ltd. will develop, produce, finance and market a slate of unique, commercial films in the horror and thriller/horror genres. Horror is one of the most popular and pro table genres in a worldwide Filmed entertainment market that will be worth a forecasted US$104.62 billion a year by 2019. It is consistently commercially successful as people love to watch movies to be scared, whether at the cinema or at home. Horror is also one of the most international genres, as fear is universal, transcending cultural and geographical boundaries.

MORNInG

Open

Iron Box Capital: Alive in the Morning Ltd.

27.03.18

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

THE

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

Horror Films additionally can be made on low budgets and do not need star names to attract audiences, offering the potential for a significant return-on-investment. Advance Assurance has been given.

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

GB Investment Magazine · April 2018

EIS

SEIS

Open

October 2016

Evergreen

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

Start-Up Series Fund - Investing in product & service start-ups in attractive markets, creating innovation & building the brands of tomorrow - Highly competitive, more than a hundred businesses a month considered for one or two seed investment opportunities - Businesses selected by real world, commercial entrepreneurs with deep brand, marketing, retail & innovation expertise - Ongoing oversight from experienced battle scarred investor directors, skilled in accelerating growth & reducing risk - SEIS investments in carefully constructed ‘mini-portfolios’ of 4 to 6 businesses, selected for fund investors - EIS investment opportunities in discretionary portfolios or individually selected by investors

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

EIS Open

Now

N/A

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

Worth Capital assess the deal flow, negotiate a fair valuation and make a commercial recommendation to Amersham Investment Management who challenge the rationale and choose to accept (or reject) the recommendation, before conducting further independent due diligence, making the investments and administering the fund on behalf of investors.

EcoMachines Ventures - EMV EIS Fund EcoMachines Ventures (EMV) is a London-based investor in B2B industrial high-tech companies investing in, building, and supporting the growth of high-potential technology SMEs with core technological innovation. EMV has experience working and co-investing with some of the world’s largest industrial players in its focus area including ABB, Philips Lighting, Evonik Industries and Flex. The EMV EIS Fund I is a discretionary portfolio focusing on EIS qualifying investments in high growth technology areas including: • Robotics and artificial intelligence (“AI”) • Power electronics and controls • Internet of things (“IoT”) • Materials science and chemistry The Fund will focus on the use of these technologies within the following broad sectors: • Energy and energy efficiency • Industrial high-tech • Resource efficiency • Smart cities and smart buildings • Smart transport

T. 203 761 6138 E. info@ecomachinesventures.com www.ecomachinesventures.com/emv-eis-fund

GB Investment Magazine · April 2018

EMV is acting as exclusive advisor to the fund, bringing its established expertise, analytical framework and network of corporate relationships to provide quality investments and attractive EIS tax relief to investors. The fund manager is Sapphire Capital Partners, an award-winning specialist fund manager focused on EIS and SEIS schemes. The Fund is also supported by Mainspring, a leading UK fund custodian.

Open Offers

EIS Close

Open

December 2016

Evergreen

(Next close 29.03.18)

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

(Subject to Manager’s discretion)

Symvan Technology EIS Fund The Symvan Technology EIS Fund is investing across a portfolio of 8-10 companies over the next 12 months. The Symvan investment philosophy can best be described as a ‘blended’ California approach. We invest in disruptive technology companies that each have the potential to provide a 10x return to investors. We take a board seat and actively work with founders to achieve both further funding and an exit. The target return for the Fund is £2.85 for every £1 invested after five years (excluding the effect of any tax relief).

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

SEIS Open

January 2018

Evergreen

Amount to be Raised: £1.5m Minimum Investment: £10,000

Symvan anticipates developments during 2018 across its clients and portfolios. The first is a cyber security business which will be floated on NASDAQ. The second is a share for share acquisition in the FinTech sector. The deadline for subscriptions is 29th March. Capacity for carry-back to 2016/17 is available. For urgent last minute pre-tax year end applications, please call 020 3011 5097.

Symvan Technology SEIS Fund 3 Symvan third SEIS fund, the Symvan Technology SEIS Fund 3 is investing across a portfolio of companies over the next 12 to 18 months. The target return for the Fund is £2.85 for every £1 invested after 5-7 years (excluding the effect of any tax relief). The Fund’s investment focus is on four subsectors: Machine Learning; Internet of Things; Data driven technologies involving big data analytics, cyber security, block chain, etc.; and Immersive technologies such as Augmented Reality (AR) and Virtual Reality (VR). Companies will mostly be offering software for the most part, often with a business-to-business (B2B) focus.

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

Advance Assurance has been received in respect of qualifying under the SEIS; companies will have experienced and reliable management teams; there is a clear path to recurring sales growth, even at the expense of nearterm profitability; the companies have a business model with high margins and relatively low capex requirements; companies require a plausible exit strategy; and must each have the potential to generate a return of ten times the original investment.

GB Investment Magazine · April 2018

EIS Open

07.04.17

06.04.18

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

Guinness AIM EIS The Guinness AIM EIS seeks to invest in at least 10 investee companies to create a portfolio of investments across a range of sectors. It targets AIM quoted companies withe the flexibility to invest up to 20% in the NEX growth market and pre-IPO. The AIM EIS closes annual 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 one EIS 5 certificate for all holdings once the portfolio is invested.

T. 020 7042 6557 E. eis@guinnessfunds.com www.guinnessfunds.com/eis

EIS Open

19.09.16

Evergreen

(next tranche closure on 30.06.18)

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 at least five investee companies to create a portfolio of investments across a range of sectors. Characteristics favoured by the investment management team are as follows: • Businesses with experienced management teams Many entrepreneurs are serial entrepreneurs. They have successfully built and sold companies and we look at their sector specific successes when they are looking for investment in new/ existing ventures • Businesses with good visibility on future growth Maturing companies and businesses with clearly defined growth paths • Businesses with expanding working capital requirements

T. 020 7042 6557 E. eis@guinnessfunds.com www.guinnessfunds.com/eis

GB Investment Magazine · April 2018

Successful businesses often require additional funds to expand their working capital. We prize businesses with growing sales that require additional capital to fund stock and debtor growth. The Guinness EIS is an evergreen service with tranche closures at the end of each quarter. All subscriptions received in the current tranche will be invested in the 2018/19 tax year.

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01622 851639

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The new GrowthInvest Portfolio Service allows Advisers to introduce their clients to the best of our SEIS and EIS qualifying investment opportunities in a single discretionary managed fund.

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