2018 Yearbook | The Alternative Investment Landscape | GBI by Clifton Media Lab

FOR PROFESSIONAL INVESTMENT ADVISERS

M AGAZINE

Y E A R B O O K

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

The main event, featuring the VCT heavyweight that backed rising stars Zoopla, Graze.com and Secret Escapes has returned. Yes, Octopus Titan VCT is ready for the next round, and if you or any of your clients want to support the UK’s next generation of contenders, this could be the perfect time to consider entering the ring. Plus let’s not forget the tax benefits available to VCT investors. But before you begin warming up, please remember any investment into Octopus Titan VCT and the income from it can rise or fall. So your clients may get back less than they originally invested. Plus the share price of VCTs can be volatile and they may be difficult to sell. As for the tax relief from investing in a VCT, this depends on your client’s personal circumstances and could change in the future. Tax relief is also dependent on the VCT maintaining its qualifying status.

Are you in? Call 0800 316 2067, or search Octopus Titan VCT.

A brighter way

For professional advisers only. Not to be relied upon by retail clients. We do not offer investment or tax advice. This advert is not a prospectus. Investors should only subscribe for shares based on information in the prospectus and Key Information Document (KID), which can be obtained from octopusinvestments.com. Issued by Octopus Investments Limited, which is authorised and regulated by the Financial Conduct Authority. Registered office: 33 Holborn, London EC1N 2HT. Registered in England and Wales No. 03942880. We record telephone calls. Issued September 2018. CAM07388

Contents

Foreword

Mark Brownridge, Director General of EISA

Introduction

Paul Wilson, Chairman, IFA Magazine Publications

Welcome

Alex Sullivan, Managing Partner

THOUGHT LEADERHIP 10 Octopus - Why planning ahead is essential to optimise the choice of VCT

28 Downing - Intergenerational Tax Planning Matters

14 Oxford Capital - Know Your EIS Investees

32 Shard Capital - Ready to Play Now

18 Deepbridge Capital - Why you need a knowledge-intensive EIS Manager

36 Britbots - Insight into the Fast Growing UK Robotics and AI Companies

22 Calculus Capital - Investing for a modern economy

38 GrowthInvest - Old Meets New

26 Iron Box Capital - Death, Taxes and Death Tax: An Adviser’s Guide

40 Association of Investment Companies - VCTs see Bumper Fundraising

44 VCT EIS Investor Forum Piece

FOCUS INTERVIEWS

ENHANCED COMPANY PROFILES

48 Shane Gallwey, Head of EIS at Guinness Asset Management

60 Iron Box Capital 62 GrowthInvest

50 Andrew Aldridge, Partner and Head of Marketing at Deepbridge Capital 52 Robert Davis, Deputy CEO and Head of Portfolio Management at Calculus Capital 54 Laurence Callcut, Partner and Head of Sales at Downing

64 Octopus Investments 66 Nexus 68 Hambro Perks 70 Shard Capital

56 Dominic Keen, CEO Britbots and Investment Director for the British Robotics Funds DIRECTORY

OPEN OFFERS 72

Highlighting some of the key offerings currently available to IFAs

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

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

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

M AGAZINE

Telephone: +44 (0) 1179 089686

Commissioning Editor: Michelle McGagh

Editor-in-Chief: Michael Wilson editor@ifamagazine.com

Publishing director: Alex Sullivan alex.sullivan@ifamagazine.com

City Editor: Neil Martin neil.martin@ifamagazine.com

Design: The Wow Factory www.thewowfactory.co.uk

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

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

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

FOREWORD Mark Brownridge, Director General EISA

Benjamin Disraeli once famously said ‘there are three kinds of lies: lies, damned lies, and statistics’ and the latest EIS and SEIS statistics from HM Revenue & Customs (HMRC) bear this out. The statistics, released in May, tell us that in 2016/17, 3,470 companies raised a total of £1.797 billion of funds under the EIS scheme. On a trending basis, this is down on the previous year but as always we expect to see these numbers revised upwardly at the next data release point. EIS and SEIS continue to be popular schemes for both investors and small businesses seeking funding. In short, they work. They help provide small businesses with access to finance they might otherwise have not been able to get access to. But that’s not the whole story. It’s clear the investment landscape in EIS has changed dramatically due to the November 2017 Budget. Those schemes that targeted capital preservation investment strategies have been forced to change their investing philosophy and adapt to the new growth world order. We won’t see what effect that will have on investor sentiment until the release of figures from HMRC in May 2019 but the likelihood is that they will be well under £1.797 billion. Why? Largely because most investors have been fed capital preservation deals for a number of years so they will either

GB Investment Yearbook · September 2018

need some time to adjust to the new investment philosophy or will see the perceived rise in risk profile as being too rich for their blood and turn to alternative investments.

to a decade ago. Only a small percentage of their assets are allocated to ‘alternatives’, of which a smaller proportion still is allocated to venture capital. Exploring some tax advantage schemes that encourage institutional investment could be very valuable and broaden out the investor universe to support start-ups through their entire life cycle. As the Office of Tax Simplification (OTS) notes in its report, Simplifying the taxation of key events in the life of a business, published in April 2018: “The absence of an entry relief for companies making venture capital investment is inconsistent with the other forms of venture capital investment…. It might be worth exploring what effect this inconsistency might be having in distorting and reducing the availability of venture capital from the corporate sector.” In summary, consideration should be given to a welltargeted entry relief, which would encourage utilisation of the existing cash reserves of the corporate sector which would be a valuable additional source of venture capital.

This then presents a challenge to our industry. How do we keep those investors who have previously invested in capital preservation EIS deals investing in EIS which now have a very different look, feel and more importantly risk profile? Or a bigger question still, how do we make EIS accessible to an even wider group of investors? After all, there are estimated to be around 500,000 high-net-worth individuals in the UK and currently only 29,860 invest in EIS on an annual basis. If our industry is to continue to grow we need to find new and deeper pools of potential investors to help provide the finance for the new, exciting, entrepreneurs our fund managers hope to fund. Below then I have outlined some thoughts (musings in some cases) as to how we could make our industry bigger and better. Some of them are sensible, some wishful thinking, some I support, some I don’t and some are possibly even controversial! I outline them merely to spark debate. •

The Patient Capital Industry panel observed that institutional investors currently allocate most of their capital to listed (and therefore liquid) assets, with a lower exposure to equity compared

•

The key to unlocking more funding for growth stage businesses is to bring different pools of capital together so that they can act in tandem rather than as silos.

EIS can provide a major contribution to addressing the market failure at the growth stage as part of the funding solution, alongside other sources of capital. Work is required to bridge the gap between early and later stage funding and the British Business Bank (BBB) initiatives need to have far closer relationships with EIS/SEIS fund managers to assess prospective dealflows in order to both co-invest alongside those funds as well as provide follow on funding. The problem is most acute at the scale up stage (c.£10 million) particularly where the current lifetime limits for EIS are reached very quickly and further rounds of funding are not ready to commit. Increased limits would help alleviate this problem as would the ability for EIS funds to make follow on investments even if gross assets exceed £15 million. •

Additional support is also required at the very earliest stages of seed funding where it is increasingly difficult for start-up knowledge-intensive companies to find funding given the long journey to revenue and profitability. There is therefore a case for the BBB seeding funds at the start-up/ seed stage targeted at very high risk knowledge-intensive companies (e.g. technology,

battery energy, and energy storage, and early stage life sciences) where it is unclear what the product, business model or even market is at that stage. These are likely to struggle for support even from tax-advantaged sources of fund as they are very high risk and the investment model requires a large portfolio approach to risk management given the very high failure rate. Of the additional £2.5 billion of funding provided by the government, a proportion of this should be allocated to seed funding and to helping develop angel syndicates •

•

Consideration should also be given to relaxing the rules preventing the parents and family members of small business owners from investing in their businesses. This would open a new avenue of retail capital. As the OTS noted: ‘The absence of any immediate tax relief for the capital contributed by the start-up owner contrasts sharply with the plethora of tax reliefs that are available to subsequent investors.’ The Financial Conduct Authority (FCA) remains a barrier to investment for investors due to marketing regulations and this would need to be addressed to broaden the appeal of EIS funds and the investment they can attract from private individuals

•

Give EIS funds upfront tax relief – in a similar way that VCT investors receive one certificate for their entire investment. Enhancing the ‘approved EIS’ fund concept has been discussed several times over the years and the concept of an ‘approved’ fund vehicle has high potential. However, the current ‘approved’ fund structure isn’t favoured, by fund managers in particular, because of the required speed of deployment of funds and the possibility that if one investment becomes disqualifying the whole EIS could fail creating a ‘cliff edge’ scenario. 12 months is also not a long enough time period to make investments, particularly given current HMRC delays in dealing with advance assurance applications and compliance statements.

There we have it. A blueprint for our future or a load of garbage? You decide. Either way, the year ahead promises to be an exciting one for EIS and SEIS. We have the promise of a new knowledge and intensive EIS fund structure and should see more exciting investment opportunities than ever. As always, please make full use of the GBI yearbook as its packed full of relevant articles, resources and information. Reading the yearbook should turn you into an instant expert on all things EIS. Enjoy!

GB Investment Yearbook · September 2018

INTRODUCTION

I’m very proud to introduce our fourth GBI Yearbook focusing on the positive and innovative nature of the EIS, SEIS, VCTs, BR and SITR schemes which collectively make up what we consider to be the Great British investment schemes. As in previous years we were keen to ensure that the GBI Yearbook provides editorial that is not time-bound but that can be read, referenced and returned to throughout the year essentially becoming a useful reference for you. This year we have had a marvellous response from this sector and the GBI Yearbook is even longer than in previous years. Full of interesting and educative Thought Leadership features, you will also find topical and informative focus interviews with experts, in-depth company profiles, and a directory towards the rear of the book. You will also notice a change in our Open Offers section both here, and on our website, strengthened and developed with our new transact facility availabel online in partnership with our friends and colleagues at GrowthInvest.

GB Investment Yearbook · September 2018

Our aim is always to offer insights providing clear information on funds and fund managers so that early planning choices are up to date and informed, in time to ensure you find the best scheme that fits your clients’ needs. These schemes continue to have a positive impact on society and the economy, and we hope that the 2018/19 GBI Yearbook provides you with the information you need to consider how these schemes might be incorporated within a balanced portfolio of investment. Together we can continue to invest in British business for all our futures. Paul Wilson Chairman IFA Magazine Publications| GBI Magazine |Clifton Media Lab

WELCOME

Welcome to the 2018/19 GBI Yearbook – the adviser’s bible to tax efficient investments. As we approach almost 12 months from the government’s Patient Capital Review, there have been challenges and regulatory changes, but I’m pleased to say that this sector remains a thriving, interesting and importantly an entrepreneurial environment – and particularly one that is creating British jobs, as well as providing excellent investment opportunities. The EIS/SEIS market has seen some incredible ventures and exits this year; VCTs continue to be an amazing and often oversubscribed investment; and BR, SITR and other tax efficient investments continue to be a successful solution to both estate and tax planning. I am particularly excited by the big push towards tax efficient investments from September onwards, but yet I also hope that in future, through initiatives like our GBI Yearbook, that these investments will increasingly be seen as year-round opportunities, and also judged on their own merit.

Thank you in advance for your continued reading and support of GBi Magazine. We would love to hear from you in regards to any issues or questions that arise from clients in regards to tax efficient investment opportunities more generally. We are also keen to hear any thoughts you may have on research and due diligence and improvements that could be made that might allow you to invest client funds to optimise their options. I hope our GBI yearbook provides you with an opportunity to learn from our expert contributors who are thought leaders in this field, that you will read the interviews from providers that provoke and enlighten and that you will reference both the Directory and that which is now available on our Open Offers platform that allows you to explore ways to invest directly within this space. From the Editorial and Marketing Team All of our best wishes Alex Sullivan Managing Partner IFA Magazine Publications| GBI Magazine |Clifton Media Lab

GB Investment Yearbook · September 2018

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THOUGHT LEADERSHIP

WHY PLANNING AHEAD IS ESSENTIAL TO OPTIMISE THE BEST VCT With the lifetime allowance tightening around pensions, Octopus tell us why VCTs could offer a solution for clients

GB Investment Yearbook Â· September 2018

Thought Leadership

Pensions have been increasingly targeted as a source of tax leakage. Recent years have seen a steady lowering of the lifetime allowance (LTA), which limits the amount that can be drawn from a pension without triggering a penal tax charge. As a result, more people have found themselves at risk of hitting their LTA.

As the value of Sarah’s pension nears closer to £1 million, further contributions will incur a penal tax charge when she retires. Any amount she takes as a lump sum over her allowance is liable to be taxed at 55%. And any regular income over her allowance would be taxed at an additional 25%.

You may well have clients who face this problem. If so, they could benefit from an alternative way to save for their retirement. One that doesn’t increase the risk of triggering their LTA and incurring extra tax charges.

Sarah meets with her financial adviser. He reviews her attitude to risk and her investment time horizon. She’s willing to invest for more than five years, to invest in smaller UK companies, and to take on the risks involved.

For those clients comfortable with the risks, VCTs can be a tax-efficient way to continue building their retirement pot. The earlier a client starts planning for retirement, the less likely they are to find themselves constrained by the LTA.

So Sarah’s adviser suggests a VCT.

Why more clients are facing LTA issues When it was introduced in 2006, the LTA was set at £1.5 million. It’s now just £1.03 million. This means many more higher and additional rate tax payers are likely to fill or exceed their allowance as they approach retirement. Indeed, the amount of tax raised by savers exceeding the LTA grew more than tenfold between 2006/07 and 2016/17. Timely retirement planning is essential for clients at risk of hitting their LTA. The trouble is, many aren’t aware of how close they are to hitting that threshold. Clients who are at risk may not feel they are particularly wealthy, yet would still benefit from finding alternative ways to build their retirement savings. How Sarah solved her LTA problem Say you have a client who’s a doctor. Let’s call her Sarah. Sarah has been contributing to her pension for more than 20 years. She has built a sizeable pension pot and she is looking forward to retirement. But now she’s worried that the value of her pension may exceed her lifetime allowance. Should she continue contributions?

As a tax-efficient investment, VCTs can complement pensions and other investments as part of a diversified retirement strategy. By investing in a VCT, Sarah can continue to build her retirement pot without adding to her LTA problem. She should also be able to claim income tax relief, while any dividends and capital gains will be tax-free. But Sarah also needs to recognise that VCTs are high risk investments and should not be used for their tax benefits alone. VCTs are inherently different from pensions and should not be thought of as comparable or alternatives for one another. If Sarah needed guaranteed income or could not tolerate loss then a VCT would not be a suitable option within her retirement plan. Since Sarah’s circumstances allow her to take on the risks that come with venture capital, a VCT could complement her existing portfolio. What are VCTs and how do they work? Smaller companies need investment to help them grow. Venture capital is about supporting the best small businesses with untapped potential. VCTs seek out those companies that could become the household names of the future. Provided your investment is held for at least five years, up to £200,000 qualifies for 30% income tax relief in the tax year the investment is made. VCT shares incur no capital gains tax when sold, and there is also the potential of taxfree dividends. This could be an attractive offer for pension investors approaching their LTA.

GB Investment Yearbook · September 2018

Understanding the risks of VCTs

VCT shares incur no capital gains tax when sold, and there is also the potential of taxfree dividends. This is an attractive offer for pension investors approaching their LTA

GB Investment Yearbook · September 2018

It is important to recognise that the value of a VCT investment, and any income from it, can fall as well as rise. Investors may not get back the full amount they invest. Tax treatment depends on individual circumstances and may change in the future. Tax reliefs depend on the VCT maintaining its VCT-qualifying status. VCT shares are by their nature high risk - their share price may be more volatile than those listed on the London Stock Exchange, and they may be harder to sell. Supporting the next generation of British businesses The UK is a great environment for small, fast-growing businesses, and these firms are important to the economy. High-growth small businesses – a category that includes many companies backed by VCTs – make up less than 1% of UK firms, but create as many as 3,000 new jobs every week. VCTs play a key role providing early stage companies with the finance and expertise they need to succeed. Between 1995 and 2014, the average VCT-backed company has achieved turnover growth of 183% since initial investment. At the same time, they offer investors an opportunity to access this growth within a wider portfolio of investments. VCTs are growing in popularity VCTs are in high demand. £728 million was invested into VCTs in the 2017/18 tax year, an increase of 34% on the previous year.

Thought Leadership

They are powerful planning tools, so investors will be using them for a variety of reasons. But it’s a safe bet that many will be using VCTs within a retirement strategy, as the LTA has made pensions less attractive from a taxperspective. Taking the next step If you have clients at risk of hitting their LTA, it makes sense to consider a VCT. Note that VCTs have finite fundraising capacity, and the most popular ones can fill up quickly. Start your planning early to make it more likely your client can invest in their preferred VCT. It also makes sense to start talking to providers sooner rather than later, so you know what’s available.

Octopus has a wealth of information you can draw on, including a client-friendly guide to VCTs that explains the asset class in more depth. If you have any clients you think could benefit from investing in a VCT, you can speak to an Octopus business development manager by calling 0800 316 2967. Issued by Octopus Investments Limited, which is authorised and regulated by the Financial Conduct Authority. Registered office: 33 Holborn, London, EC1N 2HT. Registered in England and Wales No. 03942880. We record telephone calls. Issued: September 2018. CAM07411-1809

Start planning early to make it more likely your client can invest in their preferred VCT. It also makes sense to start talking to providers sooner rather than later, so you know what’s available

GB Investment Yearbook · September 2018

KNOW YOUR EIS INVESTEES Oxford Capital explains why personalised due diligence is fundamental to its investment process

GB Investment Yearbook Â· September 2018

Thought Leadership

Not everything in the world of EIS has changed since the Autumn Budget 2017. Venture capitalists targeting high growth have been offering their propositions within the EIS wrapper for many years. Consequently, there are some EIS providers that fully understand the high-growth market and the exciting opportunities that continue to be created there. They also understand that it takes more than just a good idea to take an early stage business to fulfilling its operational potential. Understanding the possibilities and roadblocks to arrive at a sufficiently informed decision about where the best chances of success lie is a highly specialised task. Xihelm: A Live Example Take, for example, Xihelm. In May 2018, Oxford Capital closed its £1.3 million investment in Xihelm. The company is developing technology in the field of computer vision applied to agriculture, initially within glasshouses. Its software turns off-the-shelf robotic arms into automatic fruit and vegetable harvesting machines. This brings automation to the part of the process which accounts for the highest operating expense within this multi-billion-dollar industry. Xihelm’s first product is a tomato-picking robot that is currently undergoing field trials with a large UK commercial producer. Within the UK context, the premise is compelling, with 60% of agri-food products consumed in the UK sourced locally and almost all tomatoes grown in glasshouses. But the labour-intensive process of croppicking is likely to take a hit soon with some forecasting that about 20% of picking jobs will go unfilled postBrexit. If home-grown produce is simply left in the ground, it’s bad news for UK Plc which has an annual income of £110 billion from its agri-food sector. The technology is also generalised enough to be portable to other fields in the future where an understanding of organic objects in 3D space is crucial, both within and beyond the glasshouse. So, beyond fruit and vegetables, there are massive implications for worldwide food production.

The statistics around future global food requirements are stunning, climate change is reducing the size of arable areas and the UN’s Food and Agriculture Organisation estimates that to feed 9 billion people by 2050 the world will need to raise food production by 70%. This is one of the factors contributing to a surge in higher-yield greenhouse and glasshouse growing. The estimated total global greenhouse area now stands at 488,303 hectares and the global addressable labour spend in greenhouse agriculture is $68 billion. And with the total global indoor farming market growing at 14% year-on-year, this already significant opportunity is continuing to grow. The market drivers are undeniably very strong, and a fully automated robot arm running 24/7 could replace six human harvesters. But, success or failure rests on delivering the technology. So, Oxford Capital’s due diligence extended well beyond in-depth research into the possible size and scope of the opportunity. How we approached this investment Bespoke due diligence is a crucial part of the activities undertaken by venture capital investment managers to minimise the risks. For Xihelm, this meant seeking expert opinion and external validation on the quality of Xihelm’s IP, technical know-how, and the viability of its approach. Through our network, we identified a leading Professor of Information Engineering at Oxford University and engaged him to assist us with our specialised due diligence in this case. This person performed an in-depth technical review, entered into discussions with the Xihelm technical team to evaluate the potential for future development, and did a further review of team competencies and processes. We also took references on the founder from his nominees to pinpoint his previous experience and to determine his strengths and drivers. His entrepreneurial nature, practical ability, and talent for identifying the real problem, and giving clarity to different audiences shone through so we crosschecked these findings with other individuals in our network to whom he was known.

GB Investment Yearbook · September 2018

A standard process, continually adapted Bespoke due diligence doesn’t mean random checks for each potential investment. For Oxford Capital, it means relevant and additional research within a strict framework of required information, before any consideration of financial backing. Each opportunity is judged by standard criteria so that benchmarking can be carried out.

The competitors in this market were also identified, along with the stage of their development, the type and complexity of solution being developed and any potential positives or negatives. Some were focused more on outdoor harvesting, others were looking to build complex, specialist hardware with higher costs and more restricted application. The potential client-base for Xihelm’s product was also addressed. The industry’s view on the technology was sought from experts in the farming, horticultural and greenhouse markets. Their feedback emphasised just how critical the labour issue is and the importance of robots in resolving this problem and even staying in business; the consensus was that growers are focused on operational improvement to preserve their margins and that they understand the value of spending on technology to do so. As we go through our due diligence process, we want to ensure that our work is not only increasing our understanding of the business and the opportunity but also that it is increasing the business’s understanding of itself. If we are able to bring our own expertise and specialisms, to ask the right questions, introduce the right people and analyse the correct factors we will be well on our way to doing this.

GB Investment Yearbook · September 2018

The standard Oxford Capital due diligence process involves nine separate stages, from several initial meetings with the founders, through initial document preparation on the opportunity as the basis for investment team discussions, with formal approval processes for team and investment committee approval. After a term sheet is agreed with the potential investee company, the proposal goes through a second formal investment committee approval process, followed by the completion stage during which there is a raft of compliance checks, including verification of EIS advance assurance. We understand the importance of innovators and entrepreneurs and our review process is designed to be as smooth and collaborative as possible for them. Oxford Capital is also acutely aware that there must be a focus on backing success and those with the potential for it. As a result, if, after full and frank discussions, there is a barrier to proceeding at any stage, we will withdraw. In fact, recent internal reviews showed that around a third of companies do not make it from issuing a term sheet, an advanced stage in the due diligence process, to actual investment. Since typically, Oxford Capital reviews over 2,000 potential investment deals per year and sees more than 70% of industry deals in its target sectors, this process is critical. It is the frontline of the methods employed to mitigate the risks of investing in small, young companies. The investment in Xihelm is characteristic of the approach Oxford Capital takes in investing in early stage companies. We seek to fund 18-month windows to allow the company to garner further evidence of product acceptance. Our conviction increases as evidence emerges and we invest further only when and if the evidence emerges. This allows us to

Thought Leadership

minimise concentration risk and build a portfolio of EIS-qualifying companies to spread risk and improve the chances of good overall returns. In addition, we only invest alongside like-minded venture capital investment firms as a means to manage finance risk. In Xihelm, Oxford Capital invested alongside Passion Capital and Entrepreneur First. Due diligence continues after investment Our strategy is to increase investment as we see progress and we have found the best way to do that is from within our portfolio. We work closely with management teams to define and, wherever we can, help to execute a clear strategic plan encompassing the key drivers of value creation, detailing milestones, measurements and accountability. We also provide specialist business support to help nurture an investee company and this can be invaluable. For instance, Oxford Capital runs a quarterly series of events for our portfolio companies to encourage knowledge sharing between companies. They cover common challenges faced by the different companies (e.g. GDPR implementation, scaling technical teams). Through our network of contacts, we are also able to introduce third party industry experts who in turn help portfolio companies to develop and refine their propositions and relationships. These experts provide the management teams we back with additional insights to our own and can often become customers, advisers, investors or employees of our investee companies. Our portfolio management team leads a monthly portfolio review, focused on key metrics and progress against strategic milestones. Our system of bespoke KPI reporting highlights deviation from plan, against which all portfolio companies are measured. If these strategic milestones are met, we may then invest again after a period of time. As a result, we have close working relationships with companies ready to scale and our long-term mindset means that we continue to invest in growing businesses. At Oxford Capital, we know this is an exciting market, but its size and complexity demand a disciplined and knowledgeable approach.

GB Investment Yearbook Âˇ September 2018

WHY YOU NEED A KNOWLEDGE-INTENSIVE EIS MANAGER Specialist managers can see beyond the flash-in-the-pan investments and the ones that have a real future, says Deepbridge Capital

GB Investment Yearbook Â· September 2018

Thought Leadership

When it comes to life, you’ll often hear the phrase ‘you can’t buy experience’ bandied around. Long in the tooth individuals may also paraphrase George Bernard Shaw with ‘youth is wasted on the young’, and suggest that those who are new to something have no chance of success because they haven’t ‘learned their trade’. That’s not always true of course, football aficionados will remember pundit Alan Hansen in August 1995 suggesting that ‘you can’t win anything with kids’, only to find less than 12 months later the team he was criticising, Manchester United, had gone on to win the double of League and FA Cup. Now, while it’s true to say that United had a very young

History is littered with products and services which appeared to be the best thing since sliced bread, only to go incredibly mouldy in a very short space of time

team at the time, they also had a number of ‘old heads’ who were absolutely vital in bringing those trophies back to Old Trafford. Kids were the heartbeat of the team, but the likes of the vastly experienced Peter Schmeichel and Eric Cantona were the heads. I’ll stop being side-tracked by football now, but as professionals in the world of financial services we are all continually bombarded with the ‘new’ on a weekly, even daily, basis. There will be new product launches, new managers seeking to make their way in the world, new platforms, and a raft of new technology and services that purport to be the future, and want your backing to make it so. Given that we are an investment manager that predominantly invests in both life sciences and technology investee companies, we know only too well how quickly the market can change, and how what seemed like the ‘cutting edge’ just moments ago, might soon become usurped as some new disruptive individual or firm taking it to the next level – indeed it is these highly disruptive innovations that we seek to invest in. However, history is littered with products and services which appeared to be the best thing since sliced bread, only to go incredibly mouldy in a very short space of time. Being able to sort this proverbial wheat from the chaff is therefore crucial when it comes to choosing investments that have the best opportunity to last the course. The sectors we invest in are by their very nature rapidly evolving, but the decisions we make have to come from a point of experience and understanding. Over recent years and months, EIS has been refocused by government towards ‘knowledge-intensive’ companies and to have the best opportunity of investing successfully we believe that you need an ‘intensive knowledge’ of

GB Investment Yearbook · September 2018

what works in any given sector and, crucially, what doesn’t. Understanding the commercialisation process, the valuation metrics and the ultimate exit opportunities within such sectors, is crucial and these can only really be achieved with experience. Taking ‘a punt’ on the technology or life sciences sectors could leave the inexperienced entirely at the whim of lady luck. Experience comes from having been consistently committed to supporting both the sectors and those companies that work within it – we would absolutely say beware of those managers who have historically sought to sell ‘low risk’ EIS propositions in recent years, and yet (following the government changes) are suddenly trying to source and invest in new technology innovations. For those considering EIS opportunities, my message is two-fold; firstly work with sector-focused managers, and secondly work with those managers that have been ingrained in those sectors, rather than those who are now turning to certain sectors simply because they have been forced to by government changes to the scheme. Advisers and their clients should (rightly) expect that the investment managers they use know their chosen sectors like the backs of their hands. And that expertise and experience simply can’t be developed overnight, despite some attempting to convince that it can. Without

the

necessary understanding

and

experienced

personnel within the management, those who have strong relationships with the relevant sector academia and innovators, those who have been through the process of finding investable companies and have taken them on to bigger and better things, those who understand the needs of such companies, especially when they are just starting, those who have exited such innovative companies; it is incredibly difficult to articulate a robust investment process and expectations to clients – any claims or projections are merely pie in the sky. We believe that supporting and commercialising technology and life science companies, for example, is hugely different from doing it in other sectors and therefore it is absolutely vital and crucially important that the manager is immersed in these sectors and it knows how to select, value, support, develop and ultimately exit such companies. These can be both incredibly technical businesses and intricate products and services which, for want of a better phrase, could ‘blind others with science’. If the manager

GB Investment Yearbook · September 2018

Thought Leadership

can’t understand the proposition, its application, and where it could deliver its greatest growth potential, then the opportunity might be lost before it’s even begun. So, what might we be looking for when considering an investee company? Well, the first thing is making sure we know the team involved inside-out, and making sure we understand the problem(s) they are attempting to solve and the commercial opportunity that exists. Also, is this just a problem that exists in the heads of the owners, or is it a genuine issue which requires their specific solution? Also, what have they done by the time we meet them for the first time? Can they prove the viability of their service/product, and can they evidence the market there is for it? Importantly, can it be utilised across different geographical areas and territories? If it can, then the appeal for us as an investment manager is immediately broadened and we can also help the business explore those opportunities? A key part of our working with certain companies is around whether they are already part of a support network that can also help develop their proposition. As mentioned above, being a specialist means that we have cultivated strong relationships in a number of areas and we have forged key relationships with academics, healthcare professionals, tech experts, venture capitalists, agencies, grant funding bodies, etc. Investee companies that are ultimately successful tend to have strong support networks around them and part of our approach is to ensure that investees have the support and foundations to provide them with the best possible opportunity to flourish and grow. Overall, therefore, I hope advisers and their clients appreciate the benefits of working with managers that are immersed in their sector(s). Our view is that having specialist expertise and knowledge in focused markets will be key in determining potential ongoing successes. Although EIS propositions are unquoted stocks, and should therefore be treated as high risk and illiquid, it is my belief that when investing without sector expertise the risk to client’s money becomes far greater. Our advice is to opt for those sector experts who have been there, done it and ‘bought the t-shirt.’ Andrew Aldridge is a Partner, Head of Marketing at Deepbridge Capital

GB Investment Yearbook · September 2018

INVESTING FOR A MODERN ECONOMY EIS and VCT are crucial to health of the UK economy and a solution to the government’s ‘Grand Challenges’, says Calculus Capital

GB Investment Yearbook · September 2018

Thought Leadership

The UK government has long been keen to see the flow of investment funds towards innovative smaller growing businesses. For this reason, EIS and VCT legislation has provided attractive tax breaks to investors since the mid-1990s. It’s widely accepted that entrepreneurial, smaller companies can create jobs and economic growth in communities and bring innovation in products and services which can sometimes have the effect of turning an industry on its head. Earlier this year, the government announced the UK industrial strategy, which aims to tackle the ‘Four Grand Challenges’ facing the world today along with a target that the UK research and development (R&D) spend reaches 2.4% of GDP by 2027. This highlights not only its continued support for smaller companies that have the capability to grow and create prosperity but also how the government sees the challenges as crucial in shaping change across the world, as well as providing an enormous opportunity for the UK economy. The government’s commitment was reaffirmed during the last Autumn Statement by ensuring that a wellcrafted legislation for the EIS and VCT industry provides the right incentives to boost the economy through SMEs. At Calculus Capital, as managers of EIS & VCT tax incentivised products, we have long been advocates of supporting growing business and as uncertainty surrounding a post-Brexit UK increases, it is clear the government believes our dynamic, smaller companies’ sector will play a key role in keeping the UK at the forefront of not just entrepreneurship but innovation too. To put this into context, the FTSE 100 and other large-cap quoted stock market indices in the UK may be dominated by financials, fossil fuels and natural resources companies but on the ground, a newer generation of innovative companies is harnessing the science and technology sectors. This growth of opportunities and investment within these sectors mirror the deal flow that we are seeing across EIS and VCT. By way of example, 70% of the opportunities Calculus have reviewed to date have been in healthcare and life sciences or have a strong technology dimension which is where, overall, the UK economy is moving towards.

GB Investment Yearbook · September 2018

Many of these innovative, entrepreneurial companies are capable of becoming incredible businesses, but there are practical challenges too. For example, there is a shortage in the major skills required particularly in technology. In fairness to the government, it is trying to address these longstanding problems and subsequently in August this year, the Chancellor announced ÂŁ780 million of funding towards supporting the technologies of tomorrow -- this is in addition to the ÂŁ180 million previously pledged to the North East. But does investing in these business go beyond innovation? Measuring impact For many years at Calculus, we have tried to measure the impact of what our investments contribute beyond obvious financial returns. In the past, this was done, primarily for our dialogue on the impact of VCT and EIS investing with the Treasury and other government departments and agencies. However, the world is changing and there is a growing consciousness amongst investors to see that investments are not only aligned with a modern and better economy but also have the capacity to make a positive impact. This phenomenon is also showing with large quoted companies where shareholders are becoming increasingly vocal in asking for responsible and sustainable behaviour in how companies operate. However, one of the rewarding things about working in the EIS and VCT industry today is that we can look to invest in companies that are in alignment with a developing, modern world and have the capability of making a positive contribution to society. This can manifest in many ways. Whether it is investing in faster, lower cost ways of providing an established service through the use of technology; developing a test to identify a genetic susceptibility in babies that means some antibiotics can cause permanent deafness;

GB Investment Yearbook Âˇ September 2018

As managers our job is done if we can exceed expectations on returns for our investors

Thought Leadership

a world beating, environmentally-friendly technology for treating weeds in public spaces to compete against established products that many fear are carcinogenic; or simply providing authentic Mexican food at affordable prices to make somebodyâ&#x20AC;&#x2122;s bad day better. Each of these is a Calculus investment. Responsibility As pioneers in EIS and VCT investing, it is our responsibility to invest our clientâ&#x20AC;&#x2122;s money wisely in investments that produce capital growth, after all, they trust us to manage their money for on average four to five years. Part of our role is to promote a culture of excellence and best practice with a strong capital discipline in our investment. Now though, discernibly, investors are more caring about how and what those companies do and whether they are positively aligned with a modern world. At Calculus, all of this must be incorporated within a robust assessment and due diligence process. Fundamentally, we look for good management which acts responsibly, with a clear market opportunity and, competitive products or services that are capable of scaling to become significant enterprises.

If you would like to know more about the Calculus Capital EIS fund or Calculus Capital VCT, please visit their website ww.calculuscapital.com or contact the Investor Relations team on

But investors also want to feel positive about the investments made on their behalf. This should not be confused with social investing where the investor really does not expect to make a return or with monies applied for charitable purposes. Those are very different activities. This is about supporting investments aligned with the modern, forward-looking world, which have the capability of bringing genuine positive change to society. As managers our job is done if we can exceed expectations on returns for our investors, and also actively encourage and support companies that play a positive role in the modern world.

020 7493 4940 | email info@calculuscapital.com for further information

GB Investment Yearbook Âˇ September 2018

THINK DIFFERENTLY ABOUT FILM & TV Forget what you think you know about the bad old days of film partnerships, it’s a thriving industry offering great returns

GB Investment Yearbook · September 2018

well

entertainment

Thought Leadership

Investing in film got a bad name with the old film partnerships

company, ‘Alive in the Morning’. This company is going to be

but, believe it or not, they were set-up over 10 years ago.

the umbrella company for a ‘mini-studio’ for a suite of horror

How the world has changed!

films.

Investing in film and media in general is now one of the

Introducing ‘Ravers’

largest sectors for investing in EIS. Film is liked by the UK government because it brings hundreds of millions of revenue into the UK, secures employment and showcases UK talent, and Britain as a whole, around the world. Plenty of new opportunities arise in film and TV because their consumption has also changed out of all recognition over the past decade due to the emergence of film on demand, with the likes of Amazon Prime and Netflix, and multichannel access to films. In turn this has led to the globalisation of audiences, and a voracious demand for more product. It has become a significant growth industry. Like every other investment, it is hard for the ordinary investor, and indeed advisers, to know where is best to invest, and the pitfalls to be avoided. Perhaps this is even more challenging in film than most sectors. So, let’s offer a few pointers:

As the name suggests, it is about a rave – but it goes scarily wrong. The film was made at Pinewood Studios in Wales. It is produced as a film for those that love horror, but with a touch of comedy. In August 2018, Ravers had its premiere at the Frightfest, one of the top 10 horror film festivals in the world, held annually in Leicester Square. Of course, after the first showing any film producer waits with trepidation for the critical reviews that follow. We at Iron Box, were delighted to see that Ravers had attracted very favourable reviews, including from Hollywood News, which commented: ‘A well-made horror comedy that is a real crowd-pleaser.’ Such critical response has confirmed to us that our approach is right. We have produced a film that is designed for a particular audience, which means that we are confident that

Relationship Driven

the film will have wide appeal. This disciplined commercial

First, it may sound obvious, but invest in funds and

development.

companies that have the right experience from inside the

methodology informs our approach to the next films in

industry. The film and TV industry is relationship-driven. To

A good investment?

set-up, finance, produce, and exploit projects commercially,

Inevitably we get asked if film is likely to be a good investment.

you need the right people with the right experience, expertise and network of contacts. Choosing the right genre Secondly, focus on genres of smaller budget films that are proven to be profitable. Consider backing a professional group able to identify clear target audiences for the films,

As any responsible adviser will tell you: no investment is guaranteed but we would like to make three general comments: First, that investing in film is uncorrelated with just about any other investment. So it can be a prudent investment within a diversified portfolio.

tailoring them to what audiences want. For example, we at

Second, we have lined up with Amersham Investment

Iron Box Capital are targeting what we believe are the two

Management so that investors can invest in films and media

of the most profitable genres in film: animation and horror.

as part of a more widely diversified portfolio across several

Today a film doesn’t have to be shown in a cinema to be very profitable, given that there are distribution opportunities through countless digital channels and video on demand.

industries if they wish. Third, our belief is that with our obsession to adhere to and create the very best practices in this industry, there is every chance that our productions will ‘repay’ those involved with enjoyment as well as business

One of the key profitable genres is that of animated films that

returns. We think it is worth looking at for your portfolio, as

have universal appeal, but particularly in the family market.

well as on-screen.

The other area in which we at Iron Box have been focusing

Iron Box Capital Ltd (FRN 670 397) is an Appointed

is that of the horror film genre. Produced competently by

Representative of Sturgeon Ventures LLP which is

experienced professionals they can be inexpensive to make

authorised and regulated by the Financial Conduct Authority

for what is a ready, avid, and clearly defined audience. The

with FRN 452811. This article is for information only it is not

key market for horror is the 18-25 age group. To address

advice or financial guidance, please seek Financial Advice

this market segment we have set up a separate investee

from an FCA Regulated Financial Advisory Firm.

GB Investment Yearbook · September 2018

INTERGENERATIONAL TAX PLANNING MATTERS Clients no longer have to be super wealthy to find themselves with an IHT problem, but there are a number of solutions, says Downing

GB Investment Yearbook Â· September 2018

Thought Leadership

There’s nothing surer than death and taxes – and dying isn’t cheap. This fact was pulled into sharp focus at the beginning of August when officially released figures showed inheritance tax (IHT) receipts hit a total of £5.2 billion in 2017/18 - their highest ever level. The total is almost a £400 million increase on the previous year and could be predominantly due to booming stock markets and soaring property values in the year to 5 April 2018. People are living longer, and it is not unusual for four generations of the same family to be alive at the same time. The growth in the amount paid to the taxman on death underlines the importance of financial planning, not just as an individual, but on an intergenerational basis. With house prices increasing, more people could be affected by a hefty IHT charge. Not making considered decisions around IHT planning could prove a costly mistake for beneficiaries and many people could unwittingly contribute more to HM Revenue & Customs (HMRC) than they need to. Rising property prices equals rising IHT It is important to note that you don’t have to be particularly wealthy to leave behind a large IHT bill when you die. Currently, taxable estates worth more than £325,000 (over the ‘nil rate band’) are subject to 40% IHT. The government has introduced an additional allowance when a residential property is passed on to a direct descendant, called the ‘residence nil rate band’, which will increase annually over the next four years to £175,000 per person. Effectively, by 2020/21 the total value of an estate that may be left to direct descendants free of IHT will be £500,000 per person (or £1,000,000 for a married couple/civil partnership) subject to conditions. However, house prices have risen by more than 30% since 2009/10 according to the Office for Budget Responsibility (OBR), so more and more estates will be liable to pay IHT. Planning across generations Today’s older generation might well be considered the ‘lucky ones’, with many owning their own homes and benefiting from generous final salary pensions. At the other end of the family spectrum, there can be young relatives saddled with student debt, who have far less opportunity to get on the housing ladder, and who face an uncertain economic future. People are also living longer so they may have to plan for longer periods of retirement and the possibility of living their final years in a care facility.

Inheritance planning should ideally take place after careful consideration of individual requirements during retirement. There are various tax efficient ways of passing assets to descendants, but these come with a myriad of constraints and obligations. Traditional estate planning solutions can be inflexible. For example, if you give away your assets to family and friends during your lifetime, these gifts take seven years before they become exempt from IHT. Similarly, putting assets into a trust also takes seven years before the value of the assets falls outside of the taxable estate. Both of these options result in you no longer being able to access your wealth if you need to. Also, for many people, gifting their hard-earned money when they are alive can be very unappealing - trusts are complex, and the individual may feel they have lost control of where there money has gone. Gifting assets is an alternative, but this also has restrictions as it has a maximum of £3,000 a year, so it’s not the most flexible option, and unused gift annual exemption can only be carried forward by one tax year. Advisers predict growing demand for IHT advice Unsurprisingly, recent research shows that more than threequarters of advisers expect the number of retail investors requiring help with IHT planning to increase over the next three years. And two thirds of advisers expect to see the use of business relief (BR) rise over the coming three years as people look to reduce their IHT liabilities.

GB Investment Yearbook · September 2018

BR was introduced by the government to allow smaller businesses to be passed down either IHT-free or at a reduced rate. It is available on smaller UK unlisted companies (and those listed on AIM or the NEX Exchange Growth Market) which carry out a qualifying trade. The benefits to the investor are that after two years of ownership the shares no longer count towards the individual’s taxable estate and are therefore free from IHT provided they are held at death. The shares can be held directly, within an ISA, or within a specialist IHT portfolio. For investors managing their own portfolios, trying to identify which stocks qualify for BR can be confusing. There is no definitive list because the qualification status of a company can change over time, and there is no guarantee that companies currently qualifying for BR will do so in the future. Additionally, it should be borne in mind that investing in unlisted companies and AIM stocks can be risky. Most of the businesses are young and smaller than those listed on the main market and share price volatility is not uncommon.

ISAs have proven very popular since their introduction back in 1999, and today more than six million of the UK’s 23 million ISA investors are over 65 years old

GB Investment Yearbook · September 2018

The risks associated with investing in AIM, and the complexities of the tax exemption rules can form a barrier to investors selecting their own qualifying shares. Instead many prefer to appoint specialist managers to build discretionary AIM portfolios designed to minimise IHT bills. ISAs are not exempt from the ‘death tax’ ISAs have proven very popular since their introduction back in 1999, and today more than six million of the UK’s 23 million ISA investors are over 65 years old. Many will be starting to think about how they can pass on their wealth as effectively as possible, but many may not have considered that the value of the investments and cash held in ISAs are usually counted as part of the taxable estate. Those who have used the wrapper and built up a substantial sum to pass on to their heirs may be oblivious that it could be subject to 40% IHT. However, a rule change was introduced five years ago that allowed AIM-listed shares to be held within a stocks and shares ISA. By buying the right type of BR-qualifying AIM shares, investors can enjoy the potential for tax-free growth and dividends within an ISA wrapper while they are alive and pass them on free of IHT, as long as they have been held for more than two years and at death.

Thought Leadership

Will the rules be tightened? The growing popularity of the BR tax break has caused some to question whether it will become a future Budget target for the exchequer. We think it will stay on the radar of the Chancellor, but the government has stated that it remains committed to protecting the important role that this tax relief plays in supporting family-owned businesses, and in encouraging investment in the AIM and other growth markets. The fact that one day you will die is an uncomfortable truth – as is the fact that ‘you can’t take it with you’. The number of families caught in the IHT net is increasing, which represents a significant opportunity for advisers specialising in IHT and intergenerational planning. A forward-looking approach is vital when it comes to protecting and planning your family’s wealth for future generations and individuals should look for advice on which IHT services offer a straightforward, effective and flexible way to accrue and pass on their wealth. Important notice This is for information only and does not form part of a direct offer or invitation to purchase, subscribe for or dispose of securities and no reliance should be placed on it. An investment should only be made based on the relevant product literature. Downing does not offer investment or tax advice or make recommendations regarding investments and we recommend investors seek professional advice before deciding to invest. Capital is at risk, you may not get back the full amount invested, and tax treatment depends on the individual circumstances of each investor and may be subject to change. The availability of tax reliefs depends on investee companies maintaining their qualifying status. Investments in smaller companies will normally involve greater risk or volatility than investments in larger, more established companies.

Laurence Callcut Partner & Head of Sales Downing LLP Contact us Downing LLP is a London-based investment management firm formed in 1986. So far, over 35,000 investors

Any personal opinions expressed are subject to change and should not be interpreted as advice or a recommendation.

have been a part of what

Downing is authorised and regulated by the Financial Conduct Authority (Firm Registration No. 545025). Registered in England No. OC341575. Registered Office: St Magnus House,3 Lower Thames Street, London, EC3R 6HD.

to have raised over

we do, and we are proud £1.7 billion into businesses across a range of sectors.

GB Investment Yearbook · September 2018

READY TO PLAY NOW Advisers and investors should be thinking about making virtual reality their investment reality

GB Investment Yearbook Âˇ September 2018

Thought Leadership

The recent Spielberg film – Ready Player One – explored a possible future world where life in general and leisure time in particular was dominated by virtual reality (VR) headsets. Watching it from the point of view of an industry investor, Barry Downes – Chief Investment Officer of Sure Ventures – was struck by how much of the actual VR content was not that far ahead of its time, closer to 2025 than the film’s setting of 2045. ‘The film highlights the future potential of VR, immersive VR content, VR education and cutting edge technology to immerse the user such as motion platforms or haptics. In fact we see many of these things even today,’ he said. ‘For example Sure Ventures has invested in the leading VR education platform VR Education Holdings, the

leading VR experience and motion platform IMMotion Group and the leading VR and augmented reality (AR) games studio WarDucks. In addition early versions of haptic technologies such as VR gloves have started to make their way from research labs into commercial prototypes and AR technologies are moving rapidly into consumer, industry and enterprise markets. ‘Our view is that the time to invest in VR and AR is now, as by 2025 most of what Ready Player One shows will be mainstream and widely adopted by users and the enterprise.’ But surely we’ve had this false dawn before? Given the volatility associated with the tech sector, why is AR/VR now a credible opportunity?

Our view is that the time to invest in VR and AR is now, as by 2025 most of what Ready Player One shows will be mainstream and widely adopted by users and the enterprise

GB Investment Yearbook · September 2018

Market Growth For a start, the market opportunity is huge. Numerous analysts have predicted the AR/VR sector to grow from an early stage market now, at around $2-3 billion, to around $100 billion in five years’ time. Downes commented: ‘As a venture capitalist, our time horizon encompasses a five year period of making seed investments and a further five years of growth and exit which means timing wise, we are very well placed. This rapid, exponential market growth will create a tailwind behind our investee companies.’ But why now? VR has been around for years and – to date - hasn’t delivered on its potential. Quite simply, the technology to produce and host content has – until now – been unable to faithfully realise the full potential of the concept. But with giant strides in hardware; such as those made by Nvidia’s graphics chips and the multiple vendors of VR headsets, we are now very much in a position where AR/VR can actively meet and exceed user expectations. Even all-conquering Google doesn’t get it right every time: Google Glass, the AR enabled hardware, launched back in 2014 is a classic example of launching a consumer product too soon. The first version of the project had basic features, poor positioning and lack of software content and as a result, sentiment conspired against success. But ‘Glass’ isn’t on the scrapheap – far from it. The concept is evolving at breakneck pace with multiple applications being found in the industrial, manufacturing and enterprise space to unlock the value of augmented reality where human capabilities are meshed with computing power. The evolutionary path of tech is a well-trodden one. The PC was a slow burn during the early monopoly enjoyed by IBM, but picked up rapidly in the late 80s begetting a number of super software brands (Microsoft, Oracle). This in turn was succeeded by the establishment of the internet age; Cisco dominated hardware with its routers, enabling the creation of the software behemoths we know now (Google, Amazon, Facebook, Netflix). The ensuing post-millennium mobile wave further bolstered these firms positions as well as adding innovative ‘on the go’ mobile apps driven by the Apple and Google mobile platforms and apps such as Uber and Spotify,

GB Investment Yearbook · September 2018

Whattsapp and WeChat. And so we find ourselves at the start of a new wave. But how can investors access this nascent market amongst the angels and private funds? And how can winners be identified in the ever-changing environment of emerging technology? How To Access It High growth tech can be a great investment but it is usually volatile; the potential for big rewards is accompanied by similar size risk. Many people remember the boom and bust in the sector in 2000/01, plus there have been substantial gains in the last few years. As such, avoiding the losers is as important as finding the next Google. That’s the driver behind Sure Ventures’ investment strategy and offering, providing easy investor access to a broad portfolio of vetted, high growth companies. It uses the majority of its capital, know-how and network contacts to invest into seed stage start-ups in the AR/ VR arena, as well as strategic investments in the ‘Internet of Things’ and fintech sectors. The goal is to build each company into a successful, scalable business. Sure Ventures is an investment trust which listed on the London Stock Exchange in January 2018 with shares that trade on the stock market under ticker SURE. ‘Target identification and validation is the most important part of the VC jigsaw,’ said Downes, whose team’s rigorous vetting process results in only about 1%-2% of companies making the grade after initial consideration. ‘Clearly our investment process is very much our own IP, but certainly my years being involved in these sectors/ along with my financial and software enterprise background and global network means I’m in a strong position to make an informed decision. ‘In the first instance, they need to have an experienced team in place; they need a validated product in the market; and they need to be revenue generating.’ The strategy is clearly paying off: of the seven current portfolio companies, two have already made a successful debut on the London AIM market, while there is a steady pipeline of deal flow from Ireland and the UK. It is also worth bearing in mind that UK-based companies listing off the back of Sure Ventures support could be eligible for EIS.

Thought Leadership

Why The UK And Ireland? The uninitiated may well think that Silicon Valley is going to be the key gestation venue for emerging AR/ VR players. So it may be surprising to hear that the UK is geographically at the forefront of development in this space with sector growth at 22% year on year. ‘The UK is a global hotspot for gaming companies; this is important because the technology and tools, which enable the production of high quality VR and AR graphics, have emerged from the gaming community,’ said Downes. And this industry is not centred in any one location, but instead consists of 1,900 companies clustered in key cities across the UK; they are emerging in London yes, but also in Bristol, Brighton, Manchester, Newcastle and other regional centres. In Ireland there are also a number of key clusters led by Dublin, where a who’s who of Silicon Valley companies have located, and Belfast. Broad Applications While video games will be a big sub-sector within the AR/VR market (currently the global gaming industry is estimated to be around $110 billion and is larger than the film industry), the nature of the technology means there are multiple applications across consumer and enterprise markets. General content consumption such as TV, video or live events can be given a whole new dimension as 325,000 VR viewers enjoyed with the BBC VR app during the World Cup. The benefits extend across the travel industry too with virtual tours being brought to life with incredible realism. And in the field of education and training users can be brought together in virtual classrooms, drawn into virtual worlds, resulting in a far greater engagement than previously. History lessons will never be the same! Likewise, in AR, the enterprise space is already starting to embrace ‘Smartglass’ technology, with an expected take-up rate forecast to be relatively balanced across 11 different core sectors; from retail and manufacturing, through to transport and construction. However, the greatest success in AR thus far was the 500 million who played mobile game Pokemon Go, so there is clearly scope to mirror business applications in the consumer space.

‘The breadth of opportunity across the sectors means Sure Ventures is able to build an extensive and diverse portfolio. We expect to end the year with 10-12 companies, but are looking to build this to 30. Clearly this is sensible for investors, but in doing so we also create an ecosystem which has mutual synergies for our investee companies and can drive further innovation and collaboration,’ said Downes. Wrap Up The next wave of mass technology adoption will be in the AR/VR space. This presents investors and advisers with an interesting choice. Get in early with a higher degree of risk, but where there is potential to reap greater reward; or await the safer mass adoption phase, where the key players are more obvious but the core growth phase has been missed. But consider the benefits of a diversified capital growth portfolio, with a clear and focused investment strategy in key sectors, uncorrelated with other asset classes and tradable due to its listed status. So plug into Sure Ventures and a very real opportunity which augments the reality of broader investment portfolios… Are you Ready Investor One? If you’d like to find out more or would like to comment about the themes in this article please visit: sureventureplc.com or email info@sureventuresplc.com

“For a bunch of hairless apes, we’ve actually managed to invent some pretty incredible things” Ernest Cline, Ready Player One

GB Investment Yearbook · September 2018

INSIGHT INTO THE FAST GROWING UK ROBOTICS AND AI COMPANIES Dominic

Keen, founder of the British

Robotics Funds, describes how ‘carry-back’ entitlements can be used to offset clients’ tax liabilities, while introducing a mixed-basket of some of the most promising robotics and AI business into their portfolio

GB Investment Yearbook · September 2018

Thought Leadership

The Seed Enterprise Investment Scheme (SEIS) has been described by Mark Brownridge, Director-General of the EIS Association, as ‘one of the most tax advantageous schemes in the world’ on account of the five highlyattractive tax benefits that have been wrapped into a single scheme. A normal higher-rate taxpayer can have almost 70% of the amount of an SEIS-qualifying investment rebated by HM Revenue & Customs (HMRC) and, if they have taxable capital gains to offset, the risk-cover increases towards 85%. Once this very high level of tax shielding is combined with the upside potential of investing in a broad mix of promising companies, it should be seen as a good fit for any longerterm investment portfolio geared for growth. Fund structure Using a fund structure, the individual investee companies are selected on the basis of having a diversified set of target markets, thereby reducing the specific risks associated with investing in any single early-stage company. Overand-above the incentives of SEIS, another important feature of the scheme is the ability to ‘carry-back.’ This represents an extra benefit for planning, because any investment can be used to offset income tax owing, or paid in the previous tax year. With this in mind, the first British Robotics Seed Fund was raised in the 2016/17 year with the objective of delivering a three-fold return on funds invested over the lifecycle of the fund. A second fund was raised in 2017/18. These funds have gained a significant profile amongst the adviser community and, to date, investments have been made in about a dozen fast-growing British robotics and artificial intelligence businesses. A sidecar fund is currently open, giving investors access to the product today.

UK. In fact, because of companies like Deep Mind, it is one area where Britain is recognised to have a strong global pedigree. Attractive opportunities are appearing for homegrown businesses to exploit worldwide markets, delivering potentially spectacular investor returns in the process. Introducing the new British Robotics Scale-Up Fund Whilst an SEIS fund can represent an ideal home for a higherrate taxpayer that is focused on portfolio growth, it is also the case that some clients will still wish to access to the upside potential of the robotics and AI sector, but will have more of an eye to capital preservation. They will therefore want to avoid the high company-specific risks of investing in early-stage businesses. To address this need, the British Robotics Scale-Up Fund will be launched this autumn. Investors will have a wider range of companies in their fund portfolio, each of which will have already taken their product to market and will have a clear route to profitable growth. Whilst the tax advantages of this fund are less significant (only attracting EIS relief, rather than SEIS), it has a shorter lifecycle to disbursement and a lower-risk investment profile. The ‘carry-back’ benefit, mentioned above, remains. In cases where a client has reached their thresholds on pension contributions and has used up their ISA allowance, investment in a vehicle like the British Robotics Scale-Up fund may represent an attractive additional component in a comprehensive, IHT-friendly retirement funding strategy. ‘Own the robots’ In summary, planners and advisers should consider ensuring that their clients’ portfolios incorporate the important investment theme of robotics and AI, as part of a broader strategy for long-term growth. The British Robotics funds are in place to offer solutions which meet the needs of investors, whilst taking full advantage of tax-leverage and adopting a balanced approach to portfolio risk.

Why invest in robotics and artificial intelligence companies? Capable, self-operating machines are increasingly becoming available to reduce the time and money spent by organisations on repetitive tasks. The promise of robotisation within many areas of life suggests that robots and AI are catalysing a new industrial revolution that will spur on the global economy over the forthcoming decade. Consequently, robotics represents one of today’s most exciting investment themes for a growth-focussed investor. Nonetheless, it still remains notoriously difficult for clients to get exposure to this attractive area because much of the current development activity, up to now, has been happening within universities or the subsidiaries of large multi-national corporations. However, as the cost of hardware falls and the pool of national expertise grows, we are starting to see the green shoots of a vibrant robotics and AI start-up scene in the

Capable, self-operating machines are increasingly becoming available to reduce the time and money spent by organisations on repetitive tasks

GB Investment Yearbook · September 2018

OLD MEETS NEW How to fit old fashioned client values into a brave new world of tax efficient investments? David Lovell, Operations Director at GrowthInvest explores the rise of the tax-efficient platform

Now that the dust is beginning to settle on the regulatory changes that came out of the Patient Capital Review and were brought into law in March 2018, the initial collective relief was that the government had seemingly listened with some intelligence. It did not take a wrecking ball to a key element of a successful UK economy in the coming years and has gradually given way to a cautious optimism that the tax efficient investment industry, can continue to impress, hold its own, and even look to expand to encompass a much wider audience of UK Investors. If this is going to happen, and the proven successful incentives of EIS and VCT investing are to reach their potential, the industry needs to combine good use of available technologies with an excellent and allencompassing approach to client service. Room for expansion While we will all be interested to see the exact impact of the change in regulation and removal of capital preservation schemes on the flows this year, it is probable that there will be at least a slight dip down from the record years of £1.8 billion of EIS investment and £728 million for VCT investment that we have seen over the last couple of years. However, the overall success of these schemes since their inception, with over £18 billion raised through EIS schemes, funding over 26,000 companies, is based on a surprisingly small number of investors: Although there may look to be over 100,000 individual subscriptions into EIS each year, these are not the full story, as they do not take into account multiple investments by the same investors, a view which brings the numbers crashing down to typically less than 30,000 per annum into EIS, and are matched by low numbers of VCT investors (c.10-15,000 per annum).

GB Investment Yearbook · September 2018

There are around 2.5 million ‘advised clients’ currently investing in the UK marketplace, and while this number will not include all of the 250,000 UK taxpayers that earn more than £250,000 income, or the estimated 600,000 or so households with more than £1 million in liquid wealth, it will certainly include a significant percentage of them. Even accounting for some nervousness around the (perceived) higher risk profile of investments in the new world, there are many external factors at play including pension caps, low interest rates, and an inability to get real returns in traditional investment vehicles, that suggest that many more of the UK’s high-net-worth and affluent investor population should be building EIS and VCT into their portfolios. If this is to happen, the process and availability need to be made as straightforward as possible, and new clients will expect the simplicity that technology and platforms bring in their day-to-day lives to be available to them. An old solution for a new marketplace The investor, or their adviser, will certainly not expect to have to manage these types of investments individually, and nor should they be restricted from being involved and interacting with this potentially more tangible and interesting part of their investment portfolio, should they choose to do so. Technological advances are breaking down barriers – both real and perceived – across the UK investment marketplace. There is a paradox here that many of the high growth and growth companies that can be the ‘unicorns’ and offer the potential for double-digit returns in tax efficient investment portfolios, have traditionally been accessed via slightly archaic and administrationheavy routes.

Thought Leadership

This is simply not compatible with an expansion of the market, and we can turn our eye to the recent past to find a solution that works for all parts of the eco-system, and one which places the adviser and their client at the heart of the solution:

For a platform specialising in tax efficient investments such as GrowthInvest, this excellent client service needs to work for the underlying investor, and the adviser. Daniel Rodwell explained the approach:

The traditional adviser platforms transformed the UK adviser marketplace over the last 20 years, with over 90% of mainstream investment funds now flowing through platforms, and the growing size of this market has been to the benefit of fund managers as well as their clients. The move to platforms has also caused a marked change in the concentration of funds into the larger managers, with their market share dropping from near 70% to just over 40% in the last decade. A further, often overlooked client benefit of using platforms therefore is a certain inherent investment diversification. The unlisted nature of many of the qualifying tax efficient investments has meant that EIS, and to some extent VCTs, have not generally been made widely available on these platforms. This has in the last few years, led to specialist technology platforms such as GrowthInvest quickly gaining traction in the marketplace, and it is a move that draws more than a few parallels with the original rise of the platforms over the last 20 years.

‘GrowthInvest was originally founded by a wealth manager and the platform was designed for advisers. We believe the tax efficient arena is one where advisers can add real value to client portfolios and that more advisers should be using these products. However, for that to happen we need to provide support, education and an environment where advisers can manage their tax efficient business in a simple and familiar way and therefore provide the best level of service to their clients. Technology is only part of the solution.’

Technology at work

‘I have experienced first hand that client technology solutions are critical in driving investment into inefficient markets, and I feel that the GrowthInvest solution is solving a real problem within the advised market, as has been demonstrated by their traction to date.’

Interestingly, while many of the 15-plus traditional adviser platforms all have different identities, and to some extent, target audiences, they use very much the same technology, and there is only really now a handful of underlying technology providers. So could it be that the technology and the bells and whistles, while the pride and joy of the product team, are rather less important than we might initially think? It is perhaps now unassumed starting point that there is good technology, seamless integration, bespoke reporting et cetera? Over the last few years there has been increased focus has been on how technology affects the ‘user experience’ (UX). This is starting to change and evolve as the user experience with the technology being satisfactory (at worst) is taken for granted, and the battle is about the overall experience of the customer both on-and-off- line – the ‘customer experience’ (CX). Indeed, the latest surveys have pointed to the fact that traditional platforms tend to see poor customer retention if the customer service resources have been scaled back. Sounds obvious, but easy to do when technology upgrades are taking the budget. Is this a return to the good old-fashioned values of looking after the customer? Something the financial adviser world has generally prided itself upon, at least for the most valuable clients. Certainly these values, that of treating the customer as an individual, are at the very heart of any CX experience, but now we have the underlying technology and integrated data to ensure that the experience is equally tailored online, and allows the client to have a seamless experience just as they would expect to with their current account or other online retailer.

GrowthInvest has recently added Martin Cosgrove to the senior team, whose career has included over 20 years at Goldman Sachs and he brings a wealth of relevant experience. As part of the senior leadership team within the Prime Services Division at Goldman, where he was responsible for building a market leading product which provided market access, execution, custody and reporting services to their Global Hedge fund client base.

As such he is looking forward to being an integral part of the company’s strategy of providing an institutional standard offering to financial adviser and investor clients: The GrowthInvest team will certainly use the latest technology to make this happen, but believe this is only part of the answer, and will remain focused on providing excellent client service throughout every part of the ecosystem.

The traditional adviser platforms transformed the UK adviser marketplace over the last 20 years, with over 90% of mainstreams investment funds now flowing through platforms

GB Investment Yearbook · September 2018

VCTS SEE BUMPER FUNDRAISING The

Association

Investment

Companies examines the relentless popularity of VCTs

GB Investment Yearbook Â· September 2018

Thought Leadership

It has been a golden time for VCTs with near record fundraising in the 2017/18 tax year, with VCTs raising £728 million, the highest amount ever raised at the current 30% level of upfront tax relief. This is the second highest amount raised since the inception of VCTs and a 34% increase on last year’s figure of £542 million. This is a testament to the demand for VCTs from investors and follows hard on the heels of the government’s crucial recognition of VCTs as effective providers of patient capital in the November 2017 Budget. So what’s been driving this demand? This year’s bumper fundraising was boosted by uncertainty about the government’s Patient Capital Review as there were rumours ahead of the Autumn Budget in 2017 that the Chancellor would change the tax reliefs on VCTs. Clearly some advisers made sure their clients subscribed for their VCT shares early to avoid any potential changes to tax reliefs. However, VCT fundraising remained robust after November when the government confirmed that VCTs’ tax benefits would remain in place and recognised VCTs’ important role in providing patient capital. The government also introduced some significant rule changes, which were mostly introduced on 6 April 2018 with some held back for 2019. It’s clear that something more fundamental is going on with the increasing restrictions around pension contributions being a key driver of demand for VCTs. The significant changes to pension regulations, including the reduction of the lifetime allowance, are prompting many investors and their advisers to look for complementary investment solutions to plan for their retirement. Many who are comfortable with the risks of investing in small unlisted companies have turned to VCTs as a clear way to diversify their portfolios in a tax-efficient way. The tax regime for buy-to-let investments is also less favourable because of new limits on mortgage interest relief and higher rates of stamp duty, and again VCTs can provide an alternative for investors willing to take the risks.

It has been a golden time for VCTs with near record fundraising in the 2017/18 tax year, with VCTs raising £728 million

GB Investment Yearbook · September 2018

Contributing to the demand for VCTs is their strong longterm growth and income record. The average VCT is up 24% over three years, 55% over five years, and 112% over 10 years, an impressive record and clearly some sectors have performed better than others with the VCT Generalist sector up 21% over three years, 49% over five years, and 105% over 10 years. The tax-free yield is also vital for VCT investors with the average VCT yield being an attractive 7% in this low interest rate environment. Many VCT investors recognise the benefit of VCT investment and expertise to smaller UK companies. VCT fundraising is vital to UK smaller companies as they will benefit from the VCT investment and expertise they need to grow. VCT-backed businesses deliver important economic benefits, with jobs more than doubling after VCT investment. VCTs target the SME finance gap, providing funding to smaller companies which are not well-served by traditional investors. 57% of smaller companies supported by VCTs received total investment of between £2 million and £10 million. The average level of investment received by small businesses was £3.2 million. So will the golden age continue for VCTs? Managers are generally optimistic but expect returns could be more volatile as the new rules increase the risk scale because they eliminate the possibility of certain safer kinds of investment. Trevor Hope, Partner at Mobeus Equity Partners, said: ‘The outlook for the VCT sector is positive with growth capital required to provide support to SMEs as they navigate the uncertainties and opportunities which will be presented by Brexit. However, as investment strategies focus on earlier stage companies VCT funds and their shareholders must expect a greater volatility in returns.’ It’s also likely that the new rule requiring managers to invest money faster will increase managers’ caution over fundraising: raising too much, too quickly could make your performance suffer, and hence your reputation: no VCT manager wants that.

GB Investment Yearbook · September 2018

Thought Leadership

However, the reasons why demand has increased for VCTs remain in place and the UK’s smaller companies should continue to benefit from VCT investment and expertise. This is summarised by Jo Oliver, Fund Manager of the Octopus Titan VCT, which raised a record £200 million last tax year, who said: ‘There has never been a more exciting time for VCTs - it’s been a great fundraising season. Investor demand is rising for access to the growth potential of some of the UK’s most dynamic smaller companies, as well as the tax benefits that VCTs can offer.’ As for the golden time, we will have to see if King Midas continues to favour VCTs.

The reasons why demand has increased for VCTs remain in place and the UK’s smaller companies should continue to benefit from VCT investment and expertise

GB Investment Yearbook · September 2018

A £3 BILLION MARKET NO IFA CAN AFFORD TO IGNORE If you want to learn more about EIS and VCT investing, Modwenna Rees-Mogg tell us why you can’t afford to miss this VCT & EIS Investor Forum expo There’s no question why demand is high. VCTs offer the next step after pension contributions and filling up the ISA allowances. Now the secondary market is improving, there is even more reason to take them seriously

In 2010 when the VCT & EIS Investor Forum was founded, a mere £350 million was raised by VCTs, and EIS hitting just over £1 billion for the first time. Fast forward, and both markets have now doubled in size: VCTs raised £728 million in 2017/18 and EIS just shy of £2 billion. In 2018/19 could we see another 10% to 20% growth? There’s no question why demand is high. VCTs offer the next step after pension contributions and filling

GB Investment Yearbook · September 2018

up the ISA allowances. Now the secondary market is improving, there is even more reason to take them seriously. Meanwhile, core EIS investment continues to grow nicely, after excluding the outlier investment that went into solar for a few years. With 30,000 investors using the scheme, no IFA or wealth manager can dismiss the top tier fund managers and single company opportunities, without risking their clients seeking advice elsewhere on which investments to pick. And there are some great investment growth stories making this part of the market more than just about sheltering income tax and inheritance tax (IHT). Differences have also emerged between the VCT and EIS markets. In the former, choice is more concentrated; back in 2010 there were 128 VCTs to choose from versus c.75 now and in terms of fundraisings, 78 raised in 2010 versus 38 in 2016/17. This year’s VCT fundraising season has already started strongly, with Baronsmead, Calculus and Maven, as well as the best AIM VCT managers such as Hargreave Hale and Octopus, already out in the market. But it’s good also to see fresh faces, like Seneca, which plans to apply its strong track record in EIS investing to the VCT structure. We welcome the news that managers like Triplepoint are also opening offers soon.

EIS VCT Investor Forum

In contrast to VCTs, the growing number and variety of high quality EIS players is noticeable. Award-winning firms such as Deepbridge, Par Equity and Symvan, have joined the likes of Blackfinch, Calculus and Oxford Capital as the ones not just to watch, but to back. To compensate for the risks of VCT and EIS investing you need good returns. To make the exciting journey bearable, you need to be comfortable the people offering you the ride know what they are doing. So, it’s a good idea know the sector and other experts. As a non-executive director at Albion Technology & General VCT, I was delighted to hear of Albion Capital’s recent 10x return on the exit of portfolio company, Grapeshot. And I always enjoy catching up with EcoMachines Ventures because it specialises in investing in robots. If you want to know more about medtech why not come along to our Forum and have lunch with Deepbridge Capital? And, if you are a bit of a Trekkie, on 30 November, there will be a chance to learn why Par Equity backed Snap40, which sells wireless arm-bands that monitor you continuously for warning signs that something is going wrong with your health. At the Forum we will be covering emerging trends that private clients need to know about, such as which areas of direct lending are winning, and which are losing. And the big one which we will focus on is the rise and rise of single company EIS opportunities. It will take less than a day to obtain the information you need to know. To celebrate the great British companies that investors back through VCTs and EIS, this year we are launching an amazing expo to showcase the best of the best. In our ‘playroom’ delegates will be gaming with VR; in the ‘lab’ there will be white

coats and tech experiments; in the pop-up shop, Christmas gifts will be on sale, and, in the cinema, we will be showing some great EIS-backed films. And it is only right, surely, to have a proper ‘schoolroom’, with 40-minute lessons on different aspects of direct and tax efficient investing, headlined by Goji Investments and Stellar Asset Management. We designed everything - from the electronic delegate badges to the insightful content of the Forum - to make it an unforgettable experience for the IFAs, wealth managers and private investors who attend. The 500 delegates who booked last year will attest to this. Why not come along yourself this year and help us get the numbers up to 750? We would love to see you there. To find out more, and get a ticket, go to www.thevctandeisinvestorforum.com

To compensate for the risks of VCT and EIS investing you need good returns. To make the exciting journey bearable, you need to be comfortable the people offering you the ride know what they are doing

GB Investment Yearbook · September 2018

Invest in growing UK businesses Invest in the growth potential of innovative UK companies through the Government’s Enterprise Investment Schemes and Venture Capital Trusts, both of which have been granted generous tax advantages.

Calculus Capital is an award-winning pioneer in

We invest in what we believe to be the brightest

this field, with 18 years experience and a strong

fledgling UK companies. The Calculus EIS Fund

performance track record.

and Calculus VCT are open for subscription.

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.

To find out more get in touch with us, quoting ‘GBI 2018’: info@calculuscapital.com or +44 20 7493 4940

M AGAZINE

FOCUS INTERVIEWS

A UNIQUE APPROACH Shane Gallwey, Head of EIS at Guinness Asset Management, talks to GBI Magazine City Editor Neil Martin about the firm’s approach to EIS investing Guinness Asset Management’s approach to EIS investing has been welcomed by investors and their advisers for giving them a clear steer on what is anticipated for their portfolios and when to expect their subscriptions to be invested. Guinness has two generalist EIS funds. The Guinness AIM EIS is focused on AIM-listed companies, whereas the Guinness EIS is focused on private growth companies looking for scale-up capital. The firm closes tranches at regular intervals throughout the tax year, investing each tranche into a minimum of five companies across a range of sectors. And the team intends to continue with this approach to generalist EIS investing for the 2018/19 tax year and beyond. Shane Gallwey, Head of EIS at Guinness, explains: ‘Guinness has been able to give investors a sense of what the next tranche will look like by having a well developed pipeline of potential investments in place while funds are being raised. This approach has allowed the firm to offer visibility on when investments will be made, which has been welcomed by investors and their advisers.’ Guinness continues to grow, with 34 people now in the London office. And the Guinness Best of AIM product was launched in late 2017, which uses the stock screening methodology of the Guinness quoted fund range to select a portfolio of Business Relief qualifying AIM stocks. I ask Gallwey for their views on the government’s recent changes to EIS. ‘The government has long wanted to refocus EIS on growth businesses, and away from capital preservation strategies and areas that were felt not to be in the spirit of the legislation. The recent risk-to-capital changes have been designed to deliver that refocus, and I believe have been effective.’

GB Investment Yearbook · September 2018

Focus Interviews

Given that, do they have any fears that future Government changes could undermine the schemes effectiveness? ‘I believe that the current rules are effective in focusing investment where the Treasury wants it to go. I therefore don’t envisage the present Government making additional changes. Whether that applies to future Governments, I couldn’t say. Past Governments have proved unable to resist the temptation to tinker with EIS, and the EU’s State Aid rules has forced additional change.’ So if you could influence changes to the schemes, what would you suggest? ‘The Guinness AIM EIS is one of the few ‘approved’ EIS funds on the market. There would be many more if the approved EIS fund structure was more user-friendly for investors. The current legislation means investors only get their tax relief once the fund is more than 90% invested. I would be minded to change this to allow investors to claim their tax relief up front for approved funds, which would make them more popular.’ How can EIS investments continue to help diversify client portfolios? ‘EIS investments are venture capital and as a result a different asset class to quoted company investments. They are usually uncorrelated with other investment classes and therefore can provide a useful diversification for client portfolios.’ So are advisers more receptive to the schemes? ‘Advisers are increasingly using EIS as part of the financial planning landscape for their clients. It is obviously only suitable for a certain type of client, and priority in financial planning is more often than not on pensions and ISAs before looking at investment opportunities like EIS. And are clients more savvy about EIS and SEIS nowadays? ‘Our clients are often serial investors and are familiar with the advantages and drawbacks of EIS as an investment.’ Are there more clients becoming interesting in the schemes? ‘The amount of funds being invested into EIS qualifying companies has grown over the years, and recent data from HMRC shows that 3,470 companies raised a total of £1.8 billion of funds under the EIS scheme in the 2016/17 tax year. For Guinness, we have seen investment in the last tax year grow to £50 million into our EIS funds.’

How can advisers continue to educate their clients about the investment opportunities in EIS? ‘There are a wide variety of investment opportunities in the market and advisers research these before compiling a short list, or ‘panel’ of their favourites to offer to clients. Many advisers ask us to talk them through our investment pipeline so they can give their clients a flavor of what to expect from an investment portfolio such as Guinness.’ And does the industry need to do more to promote the schemes to a wider investor base? ‘The industry needs to be careful that EIS offerings are only promoted to those investors that it is appropriate for. This is where advisers play such an important role, in ensuring it is appropriate for their clients and that clients are aware of the risks.’ Has the continued confusion over Brexit affected the future of EIS? ‘Entrepreneurs are still forming businesses and looking to raise capital, and investors are still interested in making EIS investments. The ongoing uncertainties of Brexit are likely to have dampened this to some degree, but growth companies in Britain are still thriving.’ Guinness see any clouds on the horizon, such as trade wars, slowing global economy and, interest rate rises, that might spoil the party? ‘All these may have a negative effect on investor appetite for making EIS investment, but provided the benign environment for growth companies in the UK remains, and investors feel they are well serviced by the EIS funds available to them, I expect appetite for EIS to remain undiminished.’

The amount of funds being invested into EIS qualifying companies has grown over the years, and recent data from HMRC shows that 3,470 companies raised a total of £1.8 billion of funds under the EIS scheme in the 2016/17 tax year

GB Investment Yearbook · September 2018

DEEPBRIDGE PROPOSITIONS CONTINUE TO GROW IN POPULARITY WITH INCREASING FUNDS GBI City Editor Neil Martin talks to Andrew Aldridge, Partner and Head of Marketing at Deepbridge Capital It’s been a year since we have talked in depth to Deepbridge Capital, so I’m keen to find out how the firm has found the last 12 months. As regards 2018 and the approach for 2019, Aldridge says: ‘The Deepbridge EIS and SEIS approach remains unchanged; we invest in growth-focused technology and life sciences companies. The Deepbridge propositions continue to grow in popularity with increasing funds raised and deployed each year, with Deepbridge selecting and supporting highly innovative companies with global ambitions.’ It’s an approach which has served the firm well and it has built a credible following within the sector. It has also worked hard in the last 12 months to expand its size and activities. It has added to its investment, investor relations and regulatory compliance teams. In 2017 it launched the Deepbridge Life Sciences EIS and technology-focused Deepbridge Innovation SEIS, to complement the existing Deepbridge Technology Growth EIS and Deepbridge Life Sciences SEIS. Both new products have been well received by financial advisers and investors. Deepbridge believes its success is mostly due to its vastly experienced individuals who have developed and exited successful business within key sectors. If not it provides a hands-on management approach to supporting and managing investee companies. By working closely with investee companies and supporting its commercialisation, it provide entrepreneurs with the best possible opportunity to thrive and ultimately produce a return on investment for investors.

GB Investment Yearbook · September 2018

The firm has also noticed a greater interest from advisers. Aldridge says: ‘Anecdotally, advisers are increasingly looking at EIS and SEIS as they require alternative taxefficient homes for investors’ investment. As the market becomes increasingly transparent and greater education is provided, advisers (and compliance and PI providers) appear to be increasingly confident at utilising tax efficient investments when appropriate for a client.’ Does that mean clients are savvier about EIS and SEIS nowadays? ‘EIS and SEIS have never been more high profile and as long as investors understand the ethos, and experience, of the manager and understand the types of companies in to which they could be invested, then I believe there is a genuine appetite to support UK businesses and particularly those business which are either creating jobs or are creating cutting-edge technology or medical discoveries. Aldridge believes that advisers need to understand that not all of their clients should be investing via EIS. ‘However, if they suitably segment their client base and identify appropriate clients then the managers and the EIS industry as a whole now has some great tools and information available regarding EIS, the potentially significant risks, the potential opportunities and scenarios where EIS may be a crucial part of welldiversified portfolio.’

Focus Interviews

And Aldridge believes that the industry still needs to do more to promote the schemes to wider investor base, but the situation is getting better.

whole [we saw with film schemes that it only takes one or two to get it badly wrong and the whole sector becomes tarnished].’

I move on to ask ask Alridge about the UK’s strong start-up and entrepreneurial culture. What does he put that down to?

When asked if they could influence changes to the schemes, what would they suggest, Aldridge replies: ‘We have previously called for a greater focus on growth capital so are pleased that the government’s new common-sense-approach to EIS means that there is more money targeting growth-focused innovations. However, one area we would like further review is around SEIS limits – with R&D heavy start-ups, £150,000 will often not go very far or last very long so perhaps this limit should be reviewed in due course.’

‘The UK has always been entrepreneurial and innovative. It is common for an increase in start-ups following an economic downturn and the past ten years has seen the UK economy continue this trend in the wake of the credit crunch. With great academia, and a focus on technology and medical innovation the UK continues to be a leader in both the tech and life sciences sectors with fantastic skills coupled with an increasingly supportive Venture Capital sector. Tax incentives such as EIS and SEIS are also ensuring that that there is an incentive for UK investors to support such innovations financially.’

Deepbridge, based in Chester and

So what did the firm make of the government’s recent changes to EIS?

founded by Managing Partner

‘Fully supportive. The government has effectively endorsed the Deepbridge approach to investing – EIS monies should be going to those companies that offer the potential to create jobs, create exports and provide economic, and in the case of life sciences, health economic, efficiencies.’

financial advisers and investors to

Does the firm have any fears that future government changes could undermine the schemes effectiveness?

renewable energy projects.

Ian Warwick, works closely with design innovative products, ranging from investment in technology growth companies to asset-backed

‘My primary concern is that managers who haven’t invested in innovative or knowledge-intensive companies previously suddenly attempt to portray themselves as experts then this could lead to muddying of the water and potentially adverse headlines for the EIS sector as a

GB Investment Yearbook · September 2018

EIS PIONEERS CONTINUE TO SET THE PACE Robert Davis, Deputy CEO and Head of Portfolio Management at EIS pioneers Calculus Capital, talks to GBI Magazine City Editor Neil Martin about 2018 and beyond

Within the sector, Calculus Capital can rightly claim to be the longest established EIS fund manager. It launched the UK’s first approved EIS fund in 1999 and since then has offered growth and scale-up capital to later stage, world class businesses. The firm was founded by John Glencross, Chief Executive, and Chairman, Susan McDonald, and the team work from offices based in London.

As for what impact the government’s recent changes made on EIS, Davis is clear: ‘This is a positive change for tax-efficient investment, as money will now have to be focused on investing in genuinely entrepreneurial growth companies.

Given its longevity and success, it’s perhaps no surprise to hear that their team are often engaged in discussions with industry and governmental representatives about possible future developments, including the recent Patient Capital Review and the Knowledge-Intensive Companies Consultation.

‘Despite the action to remove tax breaks for capital preservation schemes, it’s clear that the government remains strongly committed to EIS and VCT investing.’

As for Davis, he joined Calculus in 2014 with responsibility for working with the portfolio companies in helping to build value and guide them towards a successful exit.

‘We think the current schemes work well and, whilst changes can never be foreseen, it is important to note that pretty much every country in Europe has some form of governmental incentive for investing in and supporting SMEs.’

I began by asking him for an update on 2018 and what they expected in 2019. ‘Our approach is largely unchanged as the recent regulatory changes have not impacted our strategy for investing in companies looking for growth and scale-up capital. We’ve invested in some great companies this year and have some exciting exits in the works which will hopefully close before the end of the year. ‘Looking forward, we expect to see a continuation of the long term shift towards businesses in technology and healthcare, although we are committed to remaining as diversified investors.’ Over the past year Calculus has expanded both its investment and investor relations teams in order to

maintain the quality of service to its clients and their advisers, and also continue to drive the investment pipeline opportunities forward.

GB Investment Yearbook · September 2018

Does the firm worry that future government changes could undermine the schemes effectiveness?

So if they could influence changes to the schemes, what would you suggest? ‘Higher limits, both lifetime and annual, in order to allow for proper scale-up so that the UK’s world class businesses can achieve their full potential. With the present limits, EIS and VCT investing can only partially address the ‘equity gap’, such that scale-up funding is perceived to be a bigger issue than start-up funding.’ The firm sets its stall out as a diversified, later stage growth investor, but admits to an increasing emphasis on both healthcare and technology; this is where the well above average growth potential is coming from.

Focus Interviews

We move on to talk about how EIS can continue to help diversify client portfolios. ‘EIS and VCT are proven asset classes which have come of age, such that these types of investment are now seen as having an appropriate place in diversified client portfolios.’ Does this mean that advisers are more receptive to the schemes? ‘Yes, with the reductions in pension contribution caps and disincentives applied to the buy-to-let property market, EIS and VCT products are becoming a more important and more mainstream part of advisers’ product offering to their clients. The availability of independent reviews which can provide some additional comfort on the pros and cons of specific advisers is also helpful to advisers.s.’ And does he think clients are more savvy about the schemes? ‘There is far greater awareness of the schemes and their benefits, although some investors remain wary of SEIS, seeing them offering too high a risk profile. EIS and VCT offerings, particularly those focused on later stage companies are seen as being better able to manage risk.’ So should advisers continue to educate their clients about the investment opportunities in EIS? ‘There is a growing expectation amongst clients that their IFAs have sufficient knowledge around these products which is why Calculus continually offers teach-ins for advisers and advisory firms specifically on EIS and VCT.’ Does the industry need to do more to promote the schemes to a wider investor base? ‘Yes. Investors with a more developed portfolio should be considering these products and there certainly is an opportunity to raise the awareness of the benefits and relay any reservations that they might have about the risk profile. A balanced understanding of the schemes is vital.’ Are there any clouds on the horizon that might spoil the party? ‘There is growing concern, further confirmed recently by the government, that the UK isn’t producing enough qualified people for the skills required to drive growth and innovation, particularly in science and technology. The government has announced additional funding to help address this issue.’ It’s likely that Calculus will remain a pioneer in the EIS and VCT space for some years to come.

Robert Davis has over 30 years’ advisory experience with a particular expertise in M&A. Most recently he was Head of the European Business of Avendus Capital, an Indian investment bank, and was previously the Head of European M&A at Nomura International for eight years. He has also held positions at JP Morgan and Robert / Jardine Fleming. Robert qualified as a Chartered Accountant with Price Waterhouse and holds an MA from the University of Cambridge.

GB Investment Yearbook · September 2018

DIVERSITY IS THE NAME OF THE GAME AT DOWNING Laurence Callcut, Partner and Head of Sales at Downing, explains to GBI Magazine City Editor Neil Martin how the firm has built upon its success and is looking forward to the years ahead The key to success for one of the sector’s leaders, Downing, has been diversity. In addition to the firm’s core development capital activity, within the leisure, healthcare, technology, healthtech and energy sectors, it has built up its early stage ventures activity and developed its property development business. London-based Downing was founded in 1986 by the current Chairman and Chief Executive, Nick Lewis and Tony McGing. During 2018 the firm has built upon its previous successes and has grown all levels of investment. It has expanded into new, larger offices and staff numbers have grown to over 140. Deal-flow in 2018 has been strong, with plenty of investment opportunities, although pricing for some transactions, says Callcut, is ‘full’. All their focus areas are experiencing growth and offer promising returns. As for the firm’s USPs, Callcut puts it down to: ‘All round experience, a large investment team, the ability to invest in construction projects, energy expertise, healthcare expertise and being one of the UK’s most active ventures investors.’

The UK has plenty of bright and driven individuals going in to early stage companies, as an alternative to going in to the city, or industry. Couple this with plenty of new ideas and a good tax environment, and you are encouraging entrepreneurialism

GB Investment Yearbook · September 2018

There were also some changes to the schemes in the year and Laurence has some views on this: ‘The government has recognized the undoubted value of EIS and VCT schemes in supporting UK companies with patient capital.’ ‘However, the limit to types of business, largely favouring tech and super-fast growth companies, may cause distortion as there is a lack of funding for many businesses, because of perceived lower risk.’ ‘Limits on structuring of a deal will put the scheme at disadvantage, particularly in follow on rounds with non-EIS/ VCT investors.’ ‘The seven year rule is entirely arbitrary and will leave a swathe of growth companies excluded from the scheme.’ When asked if they have any fears that future government changes could undermine the schemes effectiveness, Callcut says: ‘There have been changes every year recently, which makes the scheme hard to manage. We hope for a more stable environment going forward. Brexit may offer an opportunity to reinvigorate the scheme by removing some of the EU based limitations.’ Asked if they had any suggested changes to the schemes, Callcut ticks off three: ‘Firstly, take away the seven year rule, or at least ignore a level of early sales. Secondly, allow some replacement capital, not MBOs, as companies often need some capital reorganization to capitalize on growth opportunities and thirdly, allow some funding to repay bank debt or loans.’

Focus Interviews

The conversation then turns to how EIS investments can continue to help diversify client portfolios? ‘It provides exposure to the exciting entrepreneurial environment in the UK, which has a place in everyone’s portfolio to a modest extent.’ And talking about entrepreneurs, why does he think that the UK has a strong start-up and entrepreneurial culture – what does he put that down to? Callcut replies: ‘The UK has plenty of bright and driven individuals going in to early stage companies, as an alternative to going in to the city, or industry. Couple this with plenty of new ideas and a good tax environment, and you are encouraging entrepreneurialism.

And how can advisers continue to educate their clients about the investment opportunities in EIS? ‘Simply by ensuring that they are part of the standard toolkit that is used when reviewing client’s needs. If they do not, someone else will.’ Does the industry needs to do more to promote the schemes to a wider investor base? ‘Probably not, as these products are almost exclusively advised, it is advisers that will be discussing them with their clients. As long as advisers are engaged and understand how the schemes can be used in a wide variety of client scenarios, then they will make recommendations appropriate to their investor base.’

‘You can also add in the fact that there is a technical ability based on international skill sets in the UK and there is less bureaucracy than other countries, with a flexible workforce, fewer language barriers across the world and easier access to US.’

There is a technical ability

When it comes to the adviser community, does Callcut believe they are more receptive to the schemes?

countries, with a flexible

‘Advisers are receptive as they have been introduced to and become comfortable with EIS and VCT over an extended period now. The issue they face is a lack of supply. With EIS in particular it is difficult to find funds which are not dedicated to early stage businesses. There is pent-up demand from exiting ‘lower risk’ schemes where the client now has a problem matching their risk profile.’

and easier access to US

based on international skill sets in the UK and there is less bureaucracy than other workforce, fewer language barriers across the world

Does he think clients are more savvy about EIS and SEIS nowadays? ‘Yes. Clients, through their advisers, have become more accustomed to these schemes and how they can be effective tools from a tax planning point of view, whilst also allowing access to investment areas they may otherwise be unable to reach.’ So are are there more clients becoming interested in the schemes? ‘As pension restrictions such as the lifetime allowance and capping of contribution levels for higher earners bite, clients are looking wider for tax efficient vehicles to use to continue building their retirement portfolios. The benign nature from an IHT perspective that Pension Funds now enjoy is also changing people’s views on how they will utilise them, perhaps looking more at preservation for the next generation. This leads to a requirement to create alternative funds to be utilized during retirement.’

GB Investment Yearbook · September 2018

BRITBOTS LEAD THE WAY IN UK ROBOT SECTOR INVESTMENT If there is one sector that gets a lot of airtime currently, it’s robotics and automation, so GBI City Editor Neil Martin took the opportunity to get an update from Dominic Keen, CEO of Britbots and Investment Director of the British Robotics Funds

The British Robotics funds include The British Robotics Sidecar SEIS Fund (currently open), The British Robotics EIS Fund (which launches in the autumn), The British Robotics Seed SEIS Fund III (following in the winter) and Britbots CROWD, a direct investment portal which is serving clients now. Keen, a pioneer in robot investment, believes that as automation and robotisation drive significant productivity improvements across the global business landscape, investors are becoming aware of the important economic role that robots and artificial intelligence have started to play. Britbots manages the British Robotics funds to give investors access to this important investment theme, whilst offering a balanced portfolio within a highly taxefficient wrapper. Sapphire Capital Partners Keen is in charge of investments and Boyd Carson, of Sapphire Capital Partners, provides regulatory compliance and fund management. The investment strategy is based on the idea of establishing holdings in a mixed basket of the most innovative and disruptive robotics and artificialintelligence businesses within a highly tax-efficient wrapper. As well as providing exposure across a range of business sectors, the funds also invest in various types of companies including deep-IP, platforms, robotic services and sub-systems.

GB Investment Yearbook · September 2018

How have things changed over the year and what about 2019? ‘More than ever before, the automation of industries via robotics, artificial-intelligence and autonomous machines is transforming profitability and, consequently, creating an opportunity for investors to receive significant premiums from investments made in this area. ‘Over the last year, we’ve attracted over £6 million into UK-based robotics and AI firms; and, as we’ve scaled-up, we’ve put in place more support services for our portfolio businesses to further raise their chances of commercial success; such as assistance in finding new customers and raising publicity. ‘Now that we have a current stable of 12 plus investee companies, spanning a wide range of sectors of the economy, in addition to the early-stage SEIS funds that we have previously offered, we are also introducing a new EIS fund that will provide a broader spread of lower-risk, scale-up investments in businesses that have clearly-defined commercial opportunities.’ More choice He says that this year they will be providing investors in the fund with more choice. They will have the opportunity to either: •

take advantage of the maximum level of tax benefit by investing in a portfolio consisting predominantly of SEIS-qualifying businesses (50%

Focus Interviews

‘It is hard to get a good coverage of these equities on the stock market as there are not many listed players, consequently a well-balanced SEIS/EIS fund can provide access to this area; with the tax advantages used to offset the risk of holding more illiquid securities.’ income tax credit) which are, by nature, fairly earlystage and therefore carry a higher risk; or

Are advisers more receptive to the schemes and are clients more savvy about them nowadays?

elect to invest in a broader portfolio of more mature EIS-qualifying robotics and AI companies (30% income tax credit) that have already spent time within the Britbots stable and therefore are somewhat less risky.

‘We are seeing increased awareness by advisers of the British Robotics funds as the growth potential of the robotics and AI sector becomes more apparent. In our most recent fund, over 70% of the monies raised came via advisers.

They have also expanded the mentoring service, offering portfolio companies specific support in areas which can be particularly time-consuming, or complex for robotics entrepreneurs, increasing the chances of longer-term success.

‘Particularly in an environment where interest rates are still low by historical standards; long-terms returns on listed equities remain anaemic; and tax rates are getting higher, SEIS and EIS schemes represent an ever-more important element in building a portfolio that can achieve adequate levels of growth over the long-term.’

•

So what would Keen say is his firm’s USP? ‘The British Robotics funds are the only tax-efficient investment vehicles that focus purely on the investment theme of robotics and AI. ‘Our specialism allows us to provide targeted support, mentoring, networking and access to customers, so to best help portfolio business get to market and create exit opportunities for investors.’ Why does Keen think that the UK is particularly suited to investment in this sector: ‘The UK is home to some of the best AI and robotics talent in the world. Historically much of the development activity has been happening within universities or large corporations. However, as the cost of the technology has fallen and the pool of national expertise has grown, in recent years we have seen the emergence of a vibrant national robotic and AI start-up scene.’ EIS Investments How can EIS investments continue to help diversify client portfolios? ‘Long-term investors will want to have some exposure to the important growth theme of robotics, AI and automation within their portfolio, given the significant impact these trends are already having on the global economy.

How can advisers continue to educate their clients about the investment opportunities in EIS? ‘Given the increasing restrictions on pension pots, advisers can start to introduce SEIS and EIS allowances alongside their clients’ ISA allowance, as one of the higher risk components of a long-term savings programme.’ Does the industry need to do more to promote the schemes to a wider investor base? ‘Britbots has always tried to create product that can be accessed by smaller investors so as to be applicable to a wide investor base.’ The future Are any clouds on the horizon, that might spoil the party? ‘For the 2018/19 tax season, the uncertainty around Brexit may lead to a reduction in funds invested in SEIS and EIS businesses. ‘Nevertheless, we believe that an investment in UKbased robotics and AI businesses will provide a good shelter for investors against the negative impacts to the economy caused by Brexit; and are likely to continue to build new markets in the forthcoming period.’

GB Investment Yearbook · September 2018

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ENHANCED COMPANY PROFILES

IRON BOX CAPITAL Phone: + 44 (0) 207 628 7857 / + 44 (0) 752 861 6752 Email: raimund@ironboxcapital.com Website: www.ironboxcapital.com

Raimund Berens, Chief Executive Officer

COMPANY OVERVIEW Iron Box Capital is a specialist film and TV financing company. Established in 2015, Iron Box is run by actual film makers. We understand every aspect of the whole process and value chain of making films, including the financing, development, production, distribution and marketing of films. The experience of the whole team and advisory board is second to none.

KEY PERSONNEL Raimund Berens, Chief Executive Officer

Colin Brown, Chairman

Raimund Berens is CEO and founder of Iron Box Capital. With 13+ years experience in the film industry, Raimund specialises in the financing and legal structuring of feature films (both nationally and internationally). During his career he gained strong experience across a variety of activities across the film value chain including development, packaging, production management, ligthing, camera, and post-production such as sound, editing & music. Colin Brown , Chairman Colin Brown is a senior international media professional with experience and contacts developed over 30 years in the TV, film and media sectors. He has worked at CEO and Chairman-level and held Board positions at the UK Film Council and National Film and Television School. He also is a voting member of BAFTA and served as British Film Commissioner from 2007-2011.

Deborah Sheppard

GB Investment Yearbook Âˇ September 2018

Enhanced Profiles

Deborah Sheppard Deborah Sheppard has over 20+ years experience as a marketing and distribution professional across independent and studio films. During her tenure at Paramount and before that UIP (United International Pictures) she marketed over 420 movies for Universal, MGM, Paramount, Marvel and Dreamworks, among others, covering every genre, from action and horror to family animation.

USPs We are film makers. People that understand the whole process. With Colin Brown as Chairman, our network of contacts across the global film industry are second to none. We have created a range of different ways for people to invest. Whether via Amersham’s SEIS and / or EIS Funds or alternatively the Investee Companies for SEIS and EIS projects. We want our investors and their advisers to enjoy the whole film experience and have fun. This can include watching the filming and meeting the ‘stars’, going to film premieres, or even having a role as an extra!

Key Services and Funds There are several options for investors. We are part of Amersham’s general SEIS (“ASEIS”) and EIS funds (“ACDC”), where clients can invest generally across a variety of industries or specifically in the respective Iron Box Film & TV SEIS and / or SEIS channels. Where clients invest via the funds, the investment will be allocated across several film & TV investee companies which in turn will be spread across a portfolio of films. Investments are SEIS and EIS qualifying. We have also set up investee companies to look after every stage of the production process to ensure both quality and delivery. This allows more than just raising and investing money, and enable us to offer a superior product. These companies are based on specific genres of film, or teams of specialist people. There are currently 7+ films ready to go….with many more to come. There are opportunities to benefit from both SEIS and EIS when you invest in these companies.

INVESTMENT STRATEGY The entire focus is on creating audience driven films. It is this that drives the commercial success of films. That is why we focus on genres of film that have a strong track record in delivering profits, and also in working with teams that have a global reputation for excellence. It is worth making the point that smaller budget films can often make greater profits than major films, because they are more targeted for specific audiences. In today’s world we also target the inline market for films, across Netflix, Amazon Prime, In flight films, video on demand and so on. As more opportunities to view grows, so does the demand for films.

GB Investment Yearbook · September 2018

GROWTHINVEST Phone: 020 7071 3945 Email: enquiries@growthinvest.com Website: www.growthinvest.com Twitter: @GrowthInvestUK Linkedin: https://www.linkedin.com/company/10955227/

COMPANY OVERVIEW Dan Rodwell, Managing Director

GrowthInvest is an independent whole-of-market platform for tax efficient and alternative investments. We provide our growing client base of UK financial advisers, wealth managers and investors with access to a wide range of EIS, SEIS, VCT and IHT products, alongside related research, collateral, videos and news from different sources. Our purpose-built technology provides advisers and their clients with a secure and intuitive platform environment in which to consolidate, control, manage and enhance all aspects of their alternative investment portfolios.

KEY PERSONNEL Daniel Rodwell Managing Director

David Lovell, Operations Director

Daniel was a founding investor in GrowthInvest and Chairman of the Investment Committee since 2012. He became Managing Director in late 2014. Prior to this he worked in finance for nearly 20 years, managing institutional and private funds focusing on equities and derivatives. Daniel managed the UK division of Van der Moolen Equities AG and founded the equity derivatives boutique Ten Derivatives LLP. Daniel has been an Angel Investor for over 10 years, mentors high growth businesses and sits on numerous panels across the UK assessing such businesses. He is passionate about increasing efficiency in the alternative investment sector, having witnessed first-hand the automation of OTC and Open Outcry traded products in the late 1990s. David Lovell Operations Director David is an experienced strategic director who has worked in the UK financial services industry for over 20 years, in a variety of distribution and consultancy roles, before joining GrowthInvest in 2016.

GB Investment Yearbook Âˇ September 2018

Enhanced Profiles

After graduating from Edinburgh University, he held a number of roles within financial services media space, including at FT.com, and played a key role in the development, growth and subsequent sale of Matrix Solutions, a leading Business Intelligence company specialising in the UK financial services marketplace. His customer-centric approach is backed up by excellent sales, marketing operational and technical expertise. As well being part of several successful disruptive product launches, over the last decade he has provided consultancy and advice on distribution and fundraising strategies to a wide range of clients looking to approach the UK’s financial intermediaries and affluent and High Net Worth investors.

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A single, secure online environment for all clients to review and build their tax efficient investment portfolios.

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We offer a simple asset transfer and registration process which allows advisers to place and manage all of their clients’ tax efficient investments onto the platform.

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We provide intuitive online reporting tools, allowing advisers to monitor, analyse, and provide consolidated performance updates and quarterly reports to their clients.

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Rigorous research and due diligence. All investable companies go through one of 3 defined due diligence tiers, giving added peace-of-mind to the adviser. Platform and Independent Due Diligence reports from leading market research firms are available on the platform.

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The GrowthInvest Portfolio Service launched in 2017 to provide access to a diversified portfolio of what we believe are the best companies on the platform

Martin Cosgrove Investment Director Martin recently joined the leadership team at GrowthInvest in the position of Investment Director. Prior to this, Martin’s career spanned 20 years in Investment Banking at Goldman Sachs, where, as a Managing Director, he was responsible for overseeing a number of trading and sales businesses within the equities division. Martin also represented Goldman Sachs on the Board of Equilend, which is a global market participant sponsored platform, facilitating Securities Finance Trading, Post-Trade and Clearing Services to the Securities Lending Industry. Martin has been an active angel investor for 10 years and holds and mentors a large portfolio of growth companies across multiple sectors. He is a firm believer that the alternative investment sector offers investors an effective means of diversifying their portfolio coupled with the attractive returns and tax advantages available. He is passionate about increasing efficiency in the alternative investment sector, having overseen the automation of large parts of the Securities Lending Industry at Equilend.

AVAILABLE INVESTMENTS •

EIS/SEIS Single companies

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EIS/SEIS Funds

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VCTs

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IHT/ BR

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Alternatives

USPs •

An independent, FCA regulated platform providing access to Tax efficient Investments and alternative investments

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Access to a wide range of tax efficient investments comprised of SEIS and EIS single company offers, alongside SEIS and EIS Managed Portfolio Services, Venture Capital Trusts, IHTs, Bonds and other alternative assets)

GB Investment Yearbook · September 2018

OCTOPUS INVESTMENTS

Phone: 0800 316 2295 Email: clientrelations@octopusinvestments.com Website: octopusinvestments.com

COMPANY OVERVIEW

Paul Latham, Managing Director, Octopus Investments

When Octopus was founded in 2000, we wanted to build an investment company that put its customers first, by solving real-life issues. We also wanted to be fully accountable, honest and upfront about how we manage investors’ money. Today, Octopus is an award-winning, fast-growing UK fund management business with leading positions in tax-efficient investments, smaller company financing, renewable energy and healthcare. We manage more than £8.3bn in assets for private investors and institutions. And we’ll never stop trying to change the world of investments for the better, with simple, jargon-free products that do what they say they will. Since launching our first Venture Capital Trusts (VCT) in 2002, we’ve become the UK’s largest VCT manager, with more than £975m invested on behalf of over 28,000 investors. It’s worth mentioning that some of the world’s most innovative high-profile technology companies, such as Google, Microsoft and Amazon, have acquired businesses which have benefited from VCT funding.

KEY PERSONNEL OR FUND MANAGER Paul Latham, Managing Director, Octopus Investments

Jo Oliver, Director, Octopus Ventures

Paul Latham joined in 2005 and is Managing Director of Octopus Investments. He is part of the Executive Committee for the Octopus Group and spends much of his time focussed on the tax efficient investments (IHT, VCT, EIS). He is also the CEO of Fern Trading Ltd, the largest operator of commercial solar in the UK and the country’s leading bridge financier. Prior to Octopus Paul had an extensive general management and internal consulting career stretching over 30 years in multiple organisations, the most recent of which have included: Brakes, CapitalOne, NatWest and Kingfisher. Jo Oliver, Director, Octopus Ventures Jo became an Octopus Venture Partner in 2005. Having run several businesses of his own, from publishing surf books to property development, and having made numerous angel investments, including many as Venture Partner, Jo joined as a director in the

GB Investment Yearbook · September 2018

Enhanced Profiles

Octopus Ventures team in May 2009. He is involved in the team’s investment process, portfolio management and fundraising activity, of Octopus Titan VCT as well as sitting on a number of the boards of investee companies in the portfolio, including Amplience, Currency Fair, Iovox, Property Partner

performance to shareholders as tax-free dividends, and targets a dividend of 5p per annum, plus special dividends if portfolio companies are sold at a significant profit.

OPEN OFFER

and SwiftKey, which was acquired by Microsoft in 2016. Octopus Titan VCT

USPs of Octopus Titan VCT •

One of the largest Venture capital teams in Europe with over 150 years of combined experience

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Established and diversified portfolio of around 65 early stage companies across a wide variety of industries

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The team is bolstered by the Venture Partners, a group of entrepreneurs and business experts who offer best-in-class expertise in areas such as CEO leadership, sales and international expansion that can make a significant difference for companies

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Octopus Ventures have offices in New York and Singapore to support with internalisation of investee companies Octopus Titan VCT is the only VCT to offer investment through an ISA wrapper

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VCT tax benefits: 30% income tax relief on initial investment of up to £200,000, tax-free growth and tax-free dividends

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Octopus is the only manager to facilitate initial and ongoing client agreed adviser remuneration

INVESTMENT STRATEGY With net assets of £615 million at 30 August 2018, Octopus Titan VCT plc is the UK’s largest VCT. Octopus Titan VCT invests in tech-enabled businesses with high growth potential. Managed by Octopus Ventures, one of the largest venture capital investment teams in Europe, it currently has a portfolio of more than 65 early stage companies operating in a diverse range of sectors.

Octopus Titan VCT is open for investment through a new share offer of up to £120 million. This offer opened on 13 September 2018 and will close on 12 September 2019 unless it reaches capacity at an earlier date. This money will be used to make further investments into established and developing portfolio companies, as well as selectively funding investments into new companies. Key risks •

The value of an investment in Octopus Titan VCT, and any income from it, can fall as well as rise and investors may not get back the full amount invested.

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Tax reliefs depend on individual circumstances and may change in the future. Tax reliefs also depend on the VCT maintaining its VCT-qualifying status.

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VCT shares could fall or rise in value more than other shares listed on the main market of the London Stock Exchange. They may also be harder to sell.

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

Over the last decade we’ve backed some of the UK’s most successful entrepreneurs, including the founders of Zoopla Property Group, Secret Escapes and graze.com. It targets high levels of capital growth through investing in early stage companies. However rather than increasing the value of its shares it aims to return investment

GB Investment Yearbook · September 2018

NEXUS INVESTMENTS Phone: 0207 104 5595 Email: info@nexusgroup.co.uk Website: www.scaleupfund.co.uk & www.nivl.co.uk

COMPANY OVERVIEW

Harry Hyman – Managing Director, Nexus Group

Nexus Investments, part of the wider 25-year Nexus group, sources and invests in EIS qualifying opportunities across specifically growth focused businesses, engaging in macroeconomic issues within the Data, Digital, Education and Health sectors. Initially, this was pursued on a deal-by-deal basis, building an exciting portfolio of 20 companies since 2014. As a natural continuation of this promising strategy, Nexus Investments’ EIS Scale-Up Fund was launched in 2018, as a small AIFM enabling advisers and investors to benefit from Nexus’ track record of sourcing and managing fast growth UK companies scaling up.

KEY PERSONNEL Harry Hyman, Group Managing Director

Matthew O’Kane – Managing Director, Nexus Investments

Harry, a Chartered Accountant who qualified at PriceWaterhouse, is a successful and serial entrepreneur, with over twenty years’ experience in fund management and investment in the healthcare and real estate sectors. He is the founder and Managing Director of both Nexus Group and Primary Health Properties PLC, which is listed on the FTSE 250 with a healthcare focused property portfolio of over £1 billion.

Matthew O’Kane, Managing Director Matt is a Chartered Accountant, formerly of Deloitte and PwC, who has also spent time at a leading UK EIS Investment house, and on secondment at Bridgepoint, prior to joining Nexus to spearhead its investment division from 2013. A tax specialist, he has sourced the vast majority of NIVL’s 20 existing portfolio company clients, sitting on the Main Board or Advisory Board of a number of the UK’s most promising businesses.

GB Investment Yearbook · September 2018

Enhanced Profiles

Douglas Lidgitt, Associate Director Douglas is a Chartered Accountant with a wealth of corporate finance experience, from EY and prior to that BDO. He brings a network of both venture capital and private equity funds for potential follow on investments / exits in addition to strong technical skills and knowledge of investment structures.

USPs •

•

Strong Deal Flow: Existing portfolio founders, investors and advisers refer top quality deals to us due to the high-quality added value they have seen us bring. Also, as a consequence of Nexus Investments being a part of the wider Nexus group, Nexus Investments is a sister division to Investor Publishing – the eyes and ears of both the Health Investor and Education Investor communities in the UK and globally. This provides the Fund with unrivalled knowledge of latest developments and trends within those two sectors. This should make a positive difference both when sourcing prospective Investee Companies, and assessing the investment merits of each one, but also in later years when assessing optimum exit opportunities and potential acquirers. In addition, Nexus Investments have the opportunity to invest in the most exciting and promising companies from our existing deal-by-deal portfolio. Skin in the Game: The Nexus Investments’ Team will invest through the Fund alongside investors, committing over £200,000 at launch, demonstrating an alignment of interests between investors and those managing the Fund.

INVESTMENT STRATEGY

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Management – Exceptional ‘Mission Driven’ Founders with either leading academic or corporate qualifications/ experience, or previous successful exits

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Concept – A great and original concept that is “peeking into the future” that now needs capital to deliver

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Scale – Ability of the product and appetite of the founding team to scale into new markets and distribution

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Route to Market – Ability to demonstrate traction in the market

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The Right Approach – Receptiveness to shareholder and advisor guidance / mentoring

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Route to Exit – The management team have demonstrated there will be potential acquirers and that the business is working to a successful sale of the company.

Key Services and Funds Nexus Investments’ EIS Scale-Up Fund The Fund, which is Evergreen (i.e. has monthly closes), launches in 2018 and allows investors to invest across a diversified collection of early stage EIS qualifying companies that will be managed by Nexus Investments. The Fund is intended for investors who want to back established, but early-stage UK entrepreneurled businesses, with high growth potential in the aforementioned sectors, while benefitting from the long established EIS tax incentives. We also continue to advise our existing portfolio of exciting companies in our 4 chosen sectors, as each scales and sources their next stages of capital.

Our investment approach follows on from the promising strategy implemented since 2014 in our deal-by-deal portfolio. Therefore, the Fund’s core focus will continue to invest in early stage EIS qualifying companies operating within the Data, Digital, Education and Health sectors. In order to identify these promising, fast-growing businesses in our favoured sectors, we rigorously assess the 100 opportunities we see annually according to our following criteria:

GB Investment Yearbook · September 2018

HAMBRO PERKS Phone: 020 3327 4861 Email: EIS@HambroPerks.com Website: www.HambroPerks.com

COMPANY OVERVIEW Hambro Perks is a venture firm that backs outstanding founders, supporting them as they build amazing companies. Our permanent capital structure, breadth of expertise and extensive network have made us a destination of choice for many of the best entrepreneurs as they choose investors to support them on their journey. Our partners have many decades of experience in founding, scaling and exiting businesses across multiple sectors, and we actively apply this expertise across our portfolio of investee companies. The Hambro Perks Co-Investment Fund offers individuals, and other entities, the chance to co-invest alongside Hambro Perks in the businesses in which we invest while benefitting from EIS reliefs. Every deal into which the Fund invests is EIS qualifying (though investors do not have to be able to benefit from EIS reliefs to invest in the Fund, for example trusts or companies are welcome).

KEY PERSONNEL OR FUND MANAGER The Hambro Perks Co-Investment Fund co-invests alongside Hambro Perks, leveraging the experience, expertise and institutional knowledge of our partners and the entire team. Rupert Hambro, Co-Founder and Chairman Has had a distinguished career leading UK and global financial institutions including Hambros Bank and Hambro Magan. A seasoned angel investor and founder over many years. Founding shareholder and Chairman of Sipsmith, recently sold to Beam Suntory. Dominic Perks, Co-Founder and CEO Iis a serial entrepreneur having founded, scaled and invested in multiple technology-enabled businesses. Co-founder of Laundrapp, Tootle and Takumi.

GB Investment Yearbook Âˇ September 2018

Enhanced Profiles

Eric Wilkinson, CIO

INVESTMENT STRATEGY

Has had a long and successful career in private equity. Founding Principal of the Beacon Group (sold to JP Morgan for $500m) and a co-founder of Top Golf, an entertainment business that operates mostly in the US with a value of over $2bn.

The Hambro Perks Co-Investment Fund invests alongside Hambro Perks as it supports outstanding entrepreneurs and founders, helping them to build amazing companies.

Andrew Wyke, Partner Spent 20 years at Goldman Sachs rising to Managing Director and running a European Fixed Income desk prior to joining Hambro Perks. Andrew is an experienced private investor. George Davies, Partner Was previously an Associate Partner at McKinsey & Co., focused on working with principal investors across Europe. He has an MBA from Harvard Business School.

USPs Hambro Perks is a permanent capital vehicle, funded by a group of very successful shareholders from different industries and geographies. The Hambro Perks Co-Investment Fund co-invests alongside Hambro Perks, and this means that our investors are fully aligned with Hambro Perks and its shareholders, who have genuine skin in the game. We invest off our own balance sheet and therefore think like owners. The patient nature of our investments means we are also aligned with the interests of our Founders, who recognize our potential to help them build large businesses over time, rather than being under the pressure of having to return a closed end fund. This alignment of interest, combined with the extraordinary value we can add through our network and experience, makes us a destination of choice for the very best entrepreneurs and founders.

We aim to take early risk in businesses, often supplying the first external capital on a pre-revenue basis, investing where we can add significant value through applying and sharing our teamâ&#x20AC;&#x2122;s extensive of founding, building, internationalising and exiting companies. We believe we are the destination of choice for the very best entrepreneurs, and they actively choose us to support them as they build fast growth, techenabled businesses. Our main areas of focus are education technology, digital health, insurance and financial technology, and digital media, though these are not exclusive and we do have investments in other sectors.

KEY SERVICES AND FUNDS The Hambro Perks Co-Investment Fund is an evergreen discretionary managed portfolio service that co-invests alongside Hambro Perks in high growth, unlisted companies founded by outstanding entrepreneurs. Every investment made will be EIS eligible at the point of investment, and we aim to build a portfolio of 10-15 companies over the course of a year across a range of development stages and sectors.

Investors in our Fund will benefit from our proprietary dealflow, often in companies that Hambro Perks has been involved with since inception, and know that Hambro Perks has its own capital invested alongside their own.

GB Investment Yearbook Âˇ September 2018

SHARD CAPITAL Phone: 0207 186 9900 James Lewis, Founder and Managing Partner

Email: info@shardcapital.com Website: shardcapital.com

COMPANY OVERVIEW

Toby Raincock, CEO

Shard Capital is an independent financial services company headquartered in London, offering a full range of broking, asset management and corporate capital services. Our strength lies in the balance we strike between established business and start-up attitude, and the ability to provide all of our clients with a truly tailored approach. With a collection of specialist, actively managed funds and services across asset classes and the risk/reward spectrum, Shard Capital offers advisors something different. The virtue of our smaller size allows access to unique investment opportunities that aren’t necessarily relevant to larger competitors.

Barry Downes, CIO of Sure Ventures PLC

KEY PERSONNEL James Lewis, Founder and Managing Partner James established Shard Capital in 2010, initially as an institutional fixed income brokerage. He has overseen the growth of the business adding a stockbroking team in 2013, and developing a fund management arm that now has direct lending, fixed income and VC strategies. Shard Capital has over £1bn in assets under management and administration, and a team of over 70 professionals.

Gareth Burchell, Head of Shard Capital Stockbrokers

Toby Raincock, CEO Before joining Shard Capital in 2013, Toby was Director, Head of CASS Operations Regulatory Control at Barclays Capital. Previously he was the COO of Evolution Securities, part of the Evolution Group plc where he spent nearly eight years. He has also worked at Schroders and qualified as an auditor from KPMG in 2001. Barry Downes, Managing Partner of Sure Valley Ventures and CIO of Sure Ventures PLC Barry has over 20 years entrepreneurship and operational management experience in start-ups in the software industry.

Steven O’Hanlon, CIO of Rubrics Asset Management

GB Investment Yearbook · September 2018

Enhanced Profiles

Previously, he was Founder of FeedHenry, which was acquired in 2014 for $82M by RedHat Inc. and also a Partner in SVG Global Inc. a leading Silicon Valley firm. He was recently named one of the top Irish software superstars by Silicon Republic and has also won the Irish Software Association (ISA) Outstanding Achievement Award. Gareth Burchell, Head of Shard Capital Stockbrokers Gareth has over 15 years’ experience in the public markets, with particular focus on small cap and early stage companies (many of which are EIS qualifying). Over his career he has developed strong relationships with corporate brokers, market makers and market professionals throughout London. He has funded 206 companies, participating in 297 funding rounds and invested £123 million into small and medium sized businesses. Steven O’Hanlon, CIO of Rubrics Asset Management Steven was responsible for the design and development of the investment process and product offerings of the Rubrics Global UCITS Funds in 2001. Since then he has overseen the launch of each of the funds within the product suite. Prior to 2001, Steven worked with Millennium Asset Management in the development of a fully integrated asset management business.

Sure Ventures PLC Sure Ventures Plc is a listed venture capital investment trust which invests in high growth start-ups in the UK and Ireland. These primarily address the nascent Augmented Reality (AR) and Virtual Reality (VR) sectors (forecast to be a $108bn market by 2022). Several investments have been made to date and when fully constructed the anticipated portfolio should consist of 30 holdings. These will also include companies that fit within the Internet of Things (IoT) and Fintech sectors. The Trust is currently authorised to issue £50m shares; it will provide diversified exposure to an asset class that is traditionally dominated by private venture capital funds and not usually open to individual investors. The targeted return is 30% gross p.a. and dividends will be paid to maintain its status as an investment trust.

Services EIS Portfolio Many EIS qualifying opportunities are unlisted, meaning that establishing a true value of your investments, or selling them can be difficult.

KEY SERVICES AND FUNDS

Our discretionary EIS Portfolio service only invests in listed EIS companies (mainly on AIM) which go through a rigorous selection process and are vetted by our investment committee. This approach provides flexibility and has resulted in some highly impressive returns.

Funds

AIM IHT Portfolio

Rubrics Asset Management Funds

Like our EIS service, our AIM Inheritance Portfolio involves a stringent selection process.

Rubrics Asset Management is a multi-award winning global asset manager providing dynamic fixed income strategies across its five Irish UCITs Funds. The philosophy is consistent: to manage drawdowns better than peers by being active, non-benchmarked and agile. In a marketplace increasingly dominated by mega fund constructs, Rubrics’ smaller size enables greater flexibility to transition portfolios for changing market conditions.

While we can invest in any AIM listed company qualifying for Business Relief, we also have research based, in-house criteria relating to the attractiveness of an investment. We also maintain strong relationships with companies, corporate brokers and market counterparties which allows us to give you comprehensive insights.

With a track record dating back to 2006, these funds consistently outperform many of their global peers and passive investment strategies alike.

GB Investment Yearbook · September 2018

ACQUISITION AND SALES

O F I FA BUSINESSES Retirement? Time for a change? There are countless reasons to dispose of an IFA business, just as there are countless reasons to get hold of one.

W E ARE A SP EC I ALIST FINANCIAL S ALES, CONSULTA NCY A ND BROKERAGE B USI N ESS. Gunner & Co.â&#x20AC;&#x2122;s mission is to work directly with you, whether you are looking to realise the capital in your business, or you are looking for growth through a merger or acquisition. We consider every business to be unique, and therefore finding the right solution for you starts with a thorough understanding of your business operations and your wish list. Only from here can we make valuable introductions which align to both partyâ&#x20AC;&#x2122;s needs. If you would like to discuss options to sell, exit or retire, or acquire IFA businesses, please get in touch for a confidential discussion.

louise.jeffreys@gunnerandco.com

gunnerandco.com

M AGAZINE

GBI OPEN OFFERS The power to invest through GrowthInvest

EIS Open

July 2018

28 June 2019

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

Calculus Capital EIS Fund Pioneers of tax efficient investing, Calculus Capital created the UK’s first approved EIS Fund in 1999. Our 19 year track record of investing in growing UK companies assures investors of our ability to make sensible investments capable of delivering excellent returns at every stage of the economic cycle. Calculus has won multiple awards, including the EIS Association’s ‘Fund Manager of the Year’ in February 2017, the fifth time the firm has been awarded the accolade and more recently was awarded Best EIS Fund Manager at the Tax Efficiency Awards in December 2017. Calculus are recognised as having an incredibly robust investment process and an active portfolio management style - which has led to an impressive track record of successful exits. The Calculus Capital EIS Fund focuses on established companies with growth potential, across a diverse range of sectors. An investor can expect a portfolio of 6-10 companies with the following characteristics: • The ability to achieve our target IRR of 20% • Experienced management teams • Successful sales of proven products or services • Profits or a clear path to profitability • Clear route to exit Calculus’ investment strategy is exit led, with a key focus on delivering strong returns to investors. The 18 month investment programme commences after relevant closing date.

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

VCT Open

September 2018

Close 30 August 2019

(2019/20 tax year)

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

Calculus value their reputation for client service as much as their investment record, and are focused on building long standing relationships with both clients and advisors. Please get in touch to find out more on 020 7493 4940 or info@calculuscapital.com

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

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

BR Open

Now

Evergreen

Amount to be Raised: Unlimited

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

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.

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

GB Investment Magazine · September 2018

Open Offers

EIS Open

Evergreen

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

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

BPR / IHT Open

Evergreen

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

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

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

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

EIS

(but occasional investments are not EIS)

Open

Evergreen

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

Oxford Capital Co-Investor Circle Our Co-Investor Circle lets you build your own Venture Capital portfolio, by investing directly alongside Oxford Capital at your own discretion. The Co-Investor Circle is our network of sophisticated investors, who share our passion for supporting and investing in interesting businesses, with the potential for rapid value growth. Through the Co-Investor Circle, individuals and family offices can access investments in privately owned companies that would usually only be open to institutional investors, to build their own venture capital portfolio at their own discretion.

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

When making their investments, members leverage over 60 years of venture capital experience, gaining comfort from Oxford Capital’s due diligence and selection process, and from the same institutional investment terms. After investment, members benefit from our strategic planning and operational valueadd to help manage their investment risk and enhance value. Typically we seek to represent investor interests through board seat representation. Co-Investor Circle members have invested over £60m in more than 30 companies. Recent investments have been in sectors such as fintech, online marketplaces, digital healthcare, AI and machine learning.

GB Investment Magazine · September 2018

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

EIS Open

March 2017

Evergreen

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).

Deepbridge Life Sciences EIS

Maximum Raise: Uncapped

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

Minimum investment: £10,000

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

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

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

GB Investment Magazine · September 2018

Open Offers

SEIS Open

Deepbridge Innovation SEIS

Nov 2017

Evergreen

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.

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

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

SITR Open

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).

Resonance Bristol and West Midlands SITR Funds

Feb 2016

Evergreen

(with roughly quarterly closes)

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

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

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

EIS Open

Amount

Fund Twenty8

11.09.2018

25.09.2018 be

Raised:

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.

Minimum Investment: £10,000

Invest in the UK’s most promising startups. By following the investment decisions of some of the savviest private investors, Fund Twenty8® automatically builds you a diversified portfolio of no fewer than 28 EIS qualifying startups. The fund’s strategy is based on extensive research conducted by NESTA and Intelligent Partnership which asked the question: how many startup investments should I have? The magic number appears to be: at least 28. With this many startups in your portfolio, the study suggests a 95% chance of at least one giving you a 10X return or more. With this in mind, the fund is targeting a return of over 20% IRR including up to 30% EIS tax relief.

T. 01223 478 558 E. fundtwenty8@syndicateroom.com https://www.syndicateroom.com/ funds/fund-twenty8

Now in its second year, Fund Twenty8® has already attracted 377 investors, who in total have committed £7.9m.

GB Investment Magazine · September 2018

NEWS

•

REVIEWS

•

COMMENT

•

A N A LY S I S

•

INVESTMENT

Time is precious. Invest it wisely. Comprehensive and in-depth reviews, comment and analysis for today’s discerning financial and investment professional.

www.ifamagazine.com 78

GB Investment Magazine · September 2018

Open Offers

EIS

SEIS

Open

April 2017

Evergreen

Amount to be Raised:

Up to £25,000,000

Minimum Investment: £10,000

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

DMS Open

January 2015

Evergreen

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

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.

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

May 2018

SEIS Open

Evergreen: First tranche for 2018/19 to close on the 29th of June (subject to minimum fund raise)

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

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.

Jenson SEIS & EIS Fund Applying a very structured sector agnostic investment approach, the Fund targets exciting, innovative and disruptive technologies which qualify for SEIS investments, Jenson will typically invest the full allowable amount of £150,000 per company. These investee companies are then nurtured via the Investee support programme, which provides financial and operational assistance to investee companies - enhancing returns, a key differentiator between Jenson and other SEIS and EIS providers. The EIS element of the fund is used to provide follow-on funding to fully exploit commercialisation of a proven business model. Jenson Funding Partners has been investing since 2012 and has made just under 100 investments. To date the SEIS has invested circa £12 million and the EIS, combined with the syndicated investors, has invested over £5 million and raised over £5million of debt facilities. 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

The combined SEIS and EIS structure enables an individual to choose whether to invest in earlier start-up companies within SEIS or later stage companies under EIS, with investors having the choice as to whether they want to invest solely via SEIS or EIS or to split their funds across SEIS and EIS investments, thus enabling the investor to maximise the tax advantages.

GB Investment Magazine · September 2018

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

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 20 August 2018, 96 investments had been made in 31 companies. The statistics to this date are as follows: Gross amount invested by OT(S)EIS:

£4.80m

Cash back to investors via tax refunds:

£1.83m

Net cost of these investments after tax relief:

£2.87m

Fair value:

£10.08 m

Tax Free gain (on paper only so far):

£7.21m

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.

Minimum Investment: £15,000

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

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.

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

• A single, secure online environment for all clients to review and build their tax efficient investment portfolios. We’ve placed the adviser at the heart of everything we do, making it straightforward for advisers to improve the service they offer to their clients in the tax efficient investment arena. Please visit us at growthinvest.com for more details about our current open investment opportunities.

GB Investment Magazine · September 2018

Open Offers

EIS

Open

January 2015

Evergreen

Amount to be Raised: Unlimited

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

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

EIS

SEIS

Open

Now

31.01.2019

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

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

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

THE

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

SEIS Open

Now

Evergreen – multiple close dates

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

THE

MORNInG

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.

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

GB Investment Magazine · September 2018

BPR Open

June 2005

Evergreen

Amount to be Raised: Unlimited

Minimum Investment: £25,000

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

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

octopusinvestments.com

VCT Open

13.09.2018

12.09.2019

Amount to be Raised: £120 million

Minimum Investment: £3,000

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

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

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

octopusinvestments.com

GB Investment Magazine · September 2018

Open Offers

EIS Open

Evergreen

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

Downing Ventures EIS The Downing Ventures EIS invests in high risk, high potential return investment opportunities with a principal focus on early-stage UK technology companies, whilst also providing access to attractive EIS tax reliefs. Downing Ventures will invest across a variety of sectors. The principal focus will be on the technology sector, but we also have considerable expertise in the leisure and energy infrastructure sectors and will consider higher risk/higher return opportunities within these areas. Each of these early-stage businesses will be high risk with a significant chance of failure. However, the following factors should help to manage risk:

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

IHT

BPR

Open

Evergreen

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

Diversification: subscriptions estimated to be spread across approximately 12 - 15 growth businesses. Due diligence: a high number of opportunities will be investigated before each investment is made (up to 30 opportunities per investment). It is anticipated that Investors will be given the opportunity to exit their investments between four and eight years from subscription.

Downing Estate Planning Service The Downing Estate Planning Service aims to preserve investors’ capital by focusing on businesses in two distinct sectors, which we believe are lower risk than some other tax-efficient sectors. It has been designed to offer full IHT relief on subscription after only two years by investing in a portfolio of businesses trading from freehold premises and/or energy businesses through investments that should qualify for Business Relief. The Service has been designed with the following key features: To take advantage of the chance to mitigate IHT liability through Business Relief To target capital growth of 4% per annum over the medium term (this is a target and is not guaranteed)

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

EIS Open

Now

N/A

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

Create an option to receive distributions (paid quarterly, six-monthly or annually at a level set by the investor) Offer monthly access to capital with no penalties on exit (subject to liquidity)

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

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.

GB Investment Magazine · September 2018

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

Evergreen

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

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

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.

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

GB Investment Magazine · September 2018

Open Offers

EIS Open

Now

Evergreen (1st close 28 Sep 18)

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

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

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

IHT

BPR

Open

Evergreen

Minimum Investment: £30,000

Fundamental

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

SEIS Open

May 2018

Close November 2018

Amount to be Raised: Open Minimum Investment: £10,000

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.

The British Robotics Seed Fund Across the globe, the robotics industry is reaching a tipping point. For the first time, it is becoming cheaper to own, operate and maintain a robotics system, than it is to use manual labour. Robots are expected to perform 25% of industrial work by 2025. The British Robotics Seed Fund 2 (Sidecar), in conjunction with Sapphire Capital Partners LLP, is one of the first SEIS funds to specialise in UK robotics and AI start-ups. It aims to take advantage of the robotic revolution. Highlights: • Predominantly SEIS offer targeting 3x return, not including tax relief (returns not guaranteed); • A portfolio of around ten early stage robotics and artifical intelligence (AI) companies; • Fast growing sector, capitalising on Britain’s strength in robotics and AI;

E. dominic@britbots.com www.britbots.com

• Fund 2 (Sidecar) will invest predominantly in the 2018/19 tax year (with benefits eligible to be carried-back to 2017/18); • Exit targeted in three to eight years (not guaranteed).

GB Investment Magazine · September 2018

BPR Open

January 2018

Open ended

Amount to be Raised: Open ended

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

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

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

BPR Open

03.09.2018

Open ended

Amount to be Raised: Open ended

Minimum Investment: £25,000

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

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

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

EIS Open

Close Evergreen with quarterly tranche closures

19.09.2016

Amount

Raised:

£50m

Minimum Investment: £20,000

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

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

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

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.

GB Investment Magazine · September 2018

Open Offers

EIS Open

03.09.2018 Amount

06.04.2019 be

Raised:

£10m

Minimum Investment: £20,000

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

EIS Open

Now

SEIS Close

Multiple

Amount to be Raised: Evergreen

Minimum Investment: £10,000

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

EIS Open

10.01.2018

SEIS Close

30.06.2018

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

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

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

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

EIS & SEIS investments - choose EIS, SEIS or both

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

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

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

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

Investments qualifying for attractive EIS & SEIS tax reliefs

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

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.

https://growthinvest.com /investment-opportunities/

GB Investment Magazine · September 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. 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.

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

BR Open

Evergreen

Amount to be Raised: Unlimited

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

VCT Open

09/05/2018

05/04/2019

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

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

Seneca Growth Capital VCT Seneca is regional award-winning specialist SME investment and advisory business. Formed in 2010, and headquartered in the North West of England, the management team have extensive experience across a range of sectors, including private equity, corporate finance, wealth management, accountancy and stockbroking. As an experienced manager in small cap and AIM company investments, Seneca has a track record of successful growth capital investments, mainly through its EIS Portfolio Service. Since 2012, through the Seneca Growth Capital EIS Fund and the Seneca EIS Portfolio Service, Seneca has raised more than £50 million of growth capital and invested in 39 SMEs through 72 funding rounds. 18 of these companies are AIM quoted. During the 5 years to 31 March 2018, the Seneca Growth Capital EIS Fund and the Seneca EIS Portfolio Service have delivered a combined average (unaudited) NAV growth rate of approximately 8.9% p.a. before the impact of Seneca’s stated fees (c.7.3% after fees. Past performance is however not a guide to future performance.

T. 020 7071 3920 E. investor-relations@lighttowerpartners.co.uk http://lighttowerpartners.co.uk/products/senecavct

For the VCT, Seneca will target investments with strong leadership teams, robust business models, attractive growth prospects and a capability to deliver a timely and profitable investment exit in preference to targeting specific sectors. As established growth capital providers, Seneca will continue to seek investment risk mitigation through the targeting of companies with an established proof of concept and demonstrable market demand. The first allotment of over £3m into B shares was completed in August 2018.

GB Investment Magazine · September 2018

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