EIS Magazine May Issue by Alex Sullivan

www.eismagazine.com MAY 2016 ISSUE 08

EIS

SEIS

VCT

SITR

IHT

BPR

IntroducIng PrIme InherItance tax ServIce

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helping small businesses reduce their costs and increase their efficiency through the financing of modern equipment, machinery and vehicles as well as providing capital for renewable energy and waste to energy related projects.

IHT PORTFOLIO To learn more visit our website, follow us online or contact us: T: 0203 178 4055 E: info@prime-iht.co.uk W: www.prime-iht.co.uk

NOTE: This document is issued by Prestige Asset Distribution Limited, as financial promotion for information purposes only. It should be ignored by any UK recipients who are not either (i) authorised under the Financial Services & Markets Act 2000 (“FSMA”) or (ii) are investment professionals (within article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (‘‘FPO’’), certified sophisticated investors (within article 50(1) of the FPO), persons of a kind described in article 49(2) of the FPO or certified high net worth individuals (within article 48(2) of the FPO). If you are in any doubt you should consult an independent financial advisor, who should be authorised under the Financial Services & Markets Act 2000 if you are in the UK. This financial promotion has been approved for the purposes of s21 FSMA by Prestige Asset Management Limited which is authorised and regulated in the UK by the Financial Conduct Authority (FCA). Your capital may be at risk and you may not get back the full amount invested. Tax treatment depends on the individual circumstances of each investor and may be subject to change. Past performance is not a reliable indicator of future results and any forecast is not a reliable indicator of future performance. The availability of tax reliefs also depends on the investee companies maintaining their qualifying status. The Prime IHT Portfolio invests into small unquoted companies which are not quoted on any stock exchange and which are likely to have higher volatility and liquidity risk than shares quoted on the London Stock Exchange Official List. First Equity Limited, Prestige Asset Distribution Limited, Prestige Asset Management Limited and Jarvis Investment Management Limited do not provide financial or tax advice on the Prime IHT Service and as this product is not suitable for everyone, investors should seek independent investment and tax advice from suitably qualified advisor(s) before making an application to invest in this product. Please note that all the information and figures in this document are correct as at 09/2015, unless otherwise noted. © 2016

CONTENTS 4. Editor’s Welcome

Michael Wilson, Editor in Chief, discusses the debate between tax advantages and risks.

EIS Magazine is published by

6. News

Our monthly round-up of the news stories. Keep sending us your news, please.

Telephone: +44 (0)117 9532 003 Editor: Michael Wilson, Editor-In-Chief editor@ifamagazine.com

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

Commissioning Editor: Michelle McGagh Publishing director: Alex Sullivan alex.sullivan@ifamagazine.com

Design: Fanatic Design www.fanaticdesign.co.uk EIS Magazine is for professional advisers only. Full subscription details and eligibility criteria are available at www.eismagazine.com EIS 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 wihtout prior permission. All material has been carefully checked for accuracy, but no responsibility can be accepted for inaccuracies, independent research and where necesary legal advice should be sought before acting on any information contained in this publication.

10. How to use EIS for long-term income planning

Dermot Campbell, Managing Director of Kuber Ventures, explains the potential of investing in EIS.

14. How to pick an EIS winner

Tom Bradley, Partner at Oxford Capital.

16. Pensions vs EIS: what’s best for the clients?

Charles Owen, Founder of Colnvestor.

18. How tech is driving the UK Kenny Kemp, Consultant at The City Partnership.

21. Security and resilience: investing in a dangerous world

Douglas Dundonald, Will Addison and Tristram Riley-Smith shows how safety is becoming an investment opportunity.

To stay up to date with the latest EIS news visit www.eismagazine.com

25. Open Offers

Our monthly listing of what’s currently available for subscription.

May 2016 · www.eismagazine.com

Wagging the dog As the dust settles on what remains of George Osborne’s spring Budget – the planned welfare cuts reversed, the divisive pension ISA shelved, and the Brexit contingent amply provided with useful ammunition for the coming fray on 23rd June – perhaps it’s not so facetious of us to be asking exactly how much still remains of the Chancellor’s plans for the next five years? Is Mr Osborne, for instance, likely to budge on the scaling back of the lifetime pension contribution cap? Doubtful. Will the planned reduction of capital gains taxes from 28% to 20% (higher rate) and from 18% to 10% (standard rate) come under fire from the political levellers? Unlikely – not least, because they work as well for the middle-income earners as they do for the fat cats who the Daily Mail so enjoys savaging. Indeed, by excluding property investments from the new rate reductions, George may in fact have persuaded some buy-to-letters to seek out pastures new. Which ought to be good for the whole alternative investment sector. Are the EIS and VCT providers likely to be spooked by the new and clarified rules relating to the calculation of average turnover for older companies seeking to raise EIS capital for the first time? Or to the categories of type of non-qualifying investments that fund managers can access? We’d be surprised, frankly. Not least, because many of these legislative changes reflect orders that have come down from Brussels. (But don’t tell Iain Duncan Smith, okay?)

EIS Magazine · May 2016

How about the cut in corporation tax, then? It can hardly hurt new and up-and-coming companies with their eyes set on growth. The extension of entrepreneur incentives? The doubling of small business rate relief? Bring it on. Probably the biggest draw will be for existing EIS investors who will be able to defer their capital gains liabilities for as long as they stay invested. And even when they do crystallise, their reduced 20% CGT rate will look pretty plummy alongside the 30% income tax relief that they’ve already received. (And will continue to do so, of course.)

And why the tax tail’s just a tail… Small wonder, then, that the EIS, SEIS and VCT sector has little but praise for the Chancellor. And yet, as you’ll have noticed, we’re not 100% focused on the tax efficiency story here at EIS Magazine. As our Chairman Paul Wilson has been explaining in recent issues, we forget at our peril that the tax-efficiency tail has been found to be wagging the investment dog a little too often in the recent past. And that the resulting ire and suspicion from HMRC has been casting a slightly murky shadow over the whole sector which the popular press are only too happy to exploit.

There’s another story to the EIS, SEIS and VCT debate, and it’s about progress, entrepreneurship, risk and reward. It’s the small and mediumsized companies that are creating the majority of jobs these days, and that’s the factor that will drive Britain forward. It’s also where the honourable majority of tax-efficient funds are directed. So yes, let’s by all means tell our clients about the generous tax advantages that EIS, VCT and the rest can provide. But let’s not forget that a tail is a tail, and that it’s the rest of the animal that makes life worth living. Michael Wilson, Editor in Chief

A DIVERSITY OF GROWTH EIS / SEIS FUNDS – BROUGHT TO YOU BY INNVOTEC AND ITS STRATEGIC PARTNERS Anglo Scientific EIS This is Innvotec’s “flagship” Fund. This eighth annual EIS Fund from the Innvotec / Anglo Scientific collaboration is, by demand, now an “evergreen” fund that offers private investors all year round investment into fast emerging companies created and led by the well regarded, specialist and dedicated team of technology entrepreneurs, that is Anglo Scientific.

angloscientific

Anglo Scientific has built a portfolio, all EIS qualifying, of hugely promising companies, focused on delivering world class products based on the very best science, all of which should make a difference to peoples lives; investors have the opportunity to invest in a pre-identified portfolio of five or six of these companies, details of which are to be found in the Information Memorandum. C R E A TING SOLU TIONS

Performance across the earlier funds is impressive and is likely to remain so as the target companies are on a strong upward growth curve in both performance and value.

Startup Funding Club SEIS 2016 The third annual generalist SEIS Fund from the Innvotec / Startup Funding Club collaboration, the first two having been deployed across well-diversified portfolios, with forty companies having been invested in. Startup Funding Club is one of the most successful “boutiques” working with companies seeking seed and early-stage finance, especially those companies that own proprietary intellectual property (IP) capable of being exploited globally and whose founders possess the stamina and know-how to meet the challenges that lie ahead. The Startup Funding Club’s network ensures that opportunities are sourced from many of the UK’s best regarded “incubators and accelerators”. Whilst the portfolio will have a technology-bias, it will also include product based companies and those in the food sector. Integral to the success of the Fund is a mentoring programme in support of the entrepreneurs and a co-investment policy that sees the Fund investing alongside business angels.

Odyssey Mission SEIS UK based private investors have an opportunity to invest in the Odyssey Mission SEIS Fund, a novel portfolio of early stage businesses led by Asian Entrepreneurs. Investors have the prospect of strong capital appreciation whilst helping an “affinity group” renowned for both ability and commitment. The Fund is focused on providing start-up /early stage funding and mentoring support to the best of the next generation of Asian graduate entrepreneurs that wish to build their businesses in the entrepreneurial-friendly United Kingdom, some of whom will require a Tier 1 graduate entrepreneur visa so to do. The SEIS Fund is the first step in the Innvotec / Startup Funding Club inspired Odyssey Mission project to encourage cross fertilization of entrepreneurism between the UK and the Indian sub-continent.

OION SEIS 2016 The OION SEIS Fund is the second Innvotec managed growth fund in association with Oxford Innovation Opportunities Network (OION). The Fund offers private investors an opportunity to invest in a growth portfolio of early stage businesses identified by OION through its UK wide affiliated network of business and innovation centres and its associated business angel networks. The companies that will form the OION SEIS Fund will be from across the UK and will use the proceeds of investment to advance them on their business growth curve. The Fund benefits from the participation of Oxford Investment Opportunities Network (OION) in generating quality deal flow and as with all Innvotec managed SEIS Funds the entrepreneurs will be supported by the provision of experienced mentors.

FinTech SEIS 2016 Another fund from the Innvotec/ Startup Funding Club association, with FinTech Circle as the provider of sector expertise, and the first dedicated to investment in aspiring UK companies operating in the financial technology sector. The global financial services industry is currently experiencing a wave of innovation which is starting to shake up decades of status quo. A large number of “newcomers” are developing products and services that are disrupting traditional activities such as foreign exchange, payments, asset management, insurance and even developing new forms of currencies. Companies within the FinTech SEIS Fund will benefit from the complimentary knowledge and expertise of the parties involved.

“And other funds to follow” For full details on any of the above EIS / SEIS Funds or any other information please contact Innvotec on:

Tel: +44 (0) 20 7630 6990

Email: info@innvotec.co.uk

Web: www.innvotec.co.uk

Issued and approved by Innvotec Limited, Business Design Centre, Suite 310, 52 Upper Street, Islington, London, N1 0QH. Innvotec Limited is a registered company in England & Wales. Registration Number: 2030086 Innvotec Limited is Authorised and regulated by the Financial Conduct Authority.

VA0815

News Round up of the latest industry news Wadham to step down as EISA Director General Sarah Wadham, who’s been Director General of the Enterprise Investment Scheme Association (EISA) for nearly three years, stepped down from the role at the end of March. She will continue to be a key member of the organisation’s leadership and remain on the EISA Board. She intends to focus on working with the EU State Aid Committee, a cross-trade body group established by EISA to campaign for a voice in Europe for the UK’s enterprise and venture capital sectors. Mrs Wadham, pictured below, will also remain active with Green Shoots, EISA’s young professionals’ network, which she was a driving force in setting up, and EISA’s regional outreach programme. She said: “Serving as EISA Director General has been an extremely enjoyable and rewarding experience. The work EISA does is incredibly important and the role of Director General seems to grow in scope and scale week by week. I’ve invested a huge amount of time and energy into it since 2013 and I feel now it is time to hand over the reins to fresh hands.

Companies (AIC) representing the VCTs, and the UK Business Angels Association (UKBAA), will enable us to campaign more effectively on behalf of members in Brussels and the European Parliament, something that is badly needed. EISA can be rightly proud in playing a lead role in its establishment. “Of course, the job is not yet done. The industry is in the midst of adjusting to the latest rule changes that came into force last November and which were not universally welcomed by members. But the sector is in great health and fundraising is at record levels, which is extremely positive for thousands of smaller companies in the UK and for the wider economy, of which smaller companies are part of the vital lifeblood. “The process of appointing my successor is under way. I am confident that whoever takes on the role will continue to build on EISA’s achievements and raise the profile and positive influence of the Enterprise Investment Scheme industry among our key audiences and stakeholders.” There was no announcement regarding a replacement.

Big Guns Appointed at Cyrus

“I am pleased to leave the organisation in a better position than when I became Director General in 2013, helped by the collective efforts of EISA’s board and the members. Membership has grown and continues to increase including more members from the regions. “I believe that EISA, again, through our collective efforts, has become a more effective voice for the industry that we represent. Closer links have been forged with the Treasury, HMRC and policymakers and we have scored some notable successes in helping to shape and influence the rules and regulations covering EIS and SEIS. “The new EU State Aid Committee, the membership of which includes the British Venture Capital Association (BVCA), the Association of Investment

EIS Magazine · May 2016

Specialist engineering turnaround EIS investment adviser Cyrus Investment Management has appointed the Lord Peter Hain, formerly Secretary of State for Wales, and Sir Peter Wall (pictured below), formerly Chief of the General Staff, to the firm’s advisory board. Cyrus Managing Partner Peter Schwabach said: “We are very pleased to welcome two such distinguished figures to our advisory board. As an active investor in British Engineering with a focus on strategic businesses in the aerospace, defence and security industries Sir Peter Wall and Lord Hain bring to Cyrus a wealth of knowledge and relationships that benefit our investee companies and our investment strategy.”

Latest taxpayer sentiment on EIS A new report suggests that more than half of taxpayers with current investments valued over £40,000 would consider investing through the EIS. A quarter stating that they definitely would consider doing so. What’s more, those who ideally intend to invest between £100,001 and £250,000 over the next ten years, 64% would consider using the EIS. And, over four-fifths (84%) of investors in London would consider the scheme. The figures come from the Taxpayer Sentiment Report which is published by London-based private equity house IW Capital. The report follows new HMRC figures which show that wealthy Britons pay more than 25% of the country’s entire income tax bill. And, nearly 300,000 taxpayers have contributed to the equivalent of £45.9 billion between them.

The key EIS findings are: • Of those who have investments currently valued at £40,000 or more, 54% would consider EIS in their 2016 tax planning agenda, with a quarter (26%) stating that they definitely would consider doing so • Over four-fifths (84%) of investors in London would consider the scheme • Two thirds (66%) of respondents whose ideal investments size over the next ten years is between £42,001 and £100,000 would consider EIS • 64% of those who ideally intend to invest between £100,001 and £250,000 over the next ten years would consider using EIS • A higher proportion of males than women would consider EIS (60% vs. 44% respectively) • The youngest age group is more likely to consider the investment scheme compared to the older age group (91% of 18 to 34s vs. 28% of 55+) “There are very few legitimate ways you can guard tax…” said Sarah Wadham, of The EIS Association (EISA), but investors should be aware that EIS is a legitimate, government-sponsored form of tax planning. Schemes such as EIS are extremely important and contribute a huge amount to the economy – they need to be protected and looked after.” Responding to the figures thrown up by the research, CEO of IW Capital Luke Davis, said: “I hope the 2016 Budget addresses British taxpayer sentiment uncovered in this report by improving public access to EIS. This will ensure that high-net-worth investors are able to offset some of their tax bill by investing in Britain’s entrepreneurial future, thereby supporting high-growth SMEs in need of capital and boosting the long-term economic prosperity of the UK.”

EIS Association award winners The winners of the Enterprise Investment Association Awards were announced at the presentation on 11th February. The event, which took place at the House of Lords, attracted a record number of entrants. The awards are made to companies, organisations and individuals that have achieved outstanding performance in the context of EIS and SEIS investments during 2015. The winners are: • Best EIS Fund Manager/Sponsor: Calculus Capital • Best SEIS Fund Manager/Sponsor: Symvan • Best EIS/SEIS Tax Adviser: Philip Hare & Associates • Best EIS/SEIS Legal or Regulatory Adviser: Charles Russell Speechlys • Best EIS Investment Exit: Oakfield Capital Partners for Coryton Advanced Fuels • Best Innovation, Newcomer or Rising Star in EIS/ SEIS (Company): Intelligent Crowd TV (for ‘The Seed & EIS Hour’) • Best Innovation, Newcomer or Rising Star in EIS/SEIS (Individual) – Boyd Carson, Sapphire Capital Director General of the EIS Association Sarah Wadham said: “The record number and high calibre of entrants for our awards demonstrate the growing importance of EIS and SEIS investment in funding exciting early stage companies that are so vital in creating jobs and growth in the UK economy. “Since the launch of EIS in 1993-94, more than 22,900 companies have received investment through the scheme and over £12.3 billion has been raised to fund that investment. The SEIS is a much more recent initiative, launching in 2012-13, and since then more than 2,900 companies have received investment through the scheme, with £250 million raised from investors.” The independent judging panel was made up of: • Lord Taylor of Warwick – former Special Adviser to the Home Secretary • Mark Brownridge – Mazars, Head of Financial Planning Research & Development • Declan McAndrew CFA – Foster Denovo, Head of Investment Research • Lee Moran – Baigrie Davies, Chair of the Investment Committee & Head of Research • Neeta Patel – New Entrepreneurs Foundation, CEO • Dr Norman Price OBE – former DTI Innovation Adviser on Finance & Investment • Martin Fox – Bulletin Marketing, Managing Director • Sarah Wadham – The EIS Association, Director General

May 2016 · www.eismagazine.com

Advisers need more EIS support

Mercia backs Afternoonify

Charles Owen at Colnvestor warns that more support is needed for advisers amid rising EIS demand. He says that many advisers are poorly equipped to deal with investors’ increasing appetite for the Enterprise Investment Scheme. The backdrop is rising investor interest in EIS which has been an important feature of recent tax years and this year it looks likely that the trend will continue. Advisers are now helping their clients make the best use of tax allowances and reliefs in the run-up to the end of the 2015-16 tax year in April.

Mercia Fund Management has completed its first SEIS investment into Afternoonify. Mercia has invested £125,000 in Afternoonify, developer of the automated digital advertising audit tool, PERCEPT. The tool offers cost cutting, actionable solutions for brands and advertising agencies. The money will be used to help develop PERCEPT, prior to a full commercial launch later this year. PERCEPT has been developed to automatically audit large-scale search accounts across a diverse range of industry standard key performance indicators (“KPIs”). It allows agencies and brands to track and develop the use of best-practice account management across their Pay Per Click (“PPC”) advertising spend. Mercia Investment Manager Joshua Levy said: “We are pleased to make our first investment into Afternoonify, which benefits from the strong leadership of Founder Tom Quick, who has over two decades’ experience in the digital media sector. “The investment also underlines our commitment to build and support promising early stage start-ups, which then move through our Complete Capital Solution to become the next generation of potential emerging stars.” CEO and Founder of Afternoonify Tom Quick said: “We’re thrilled to be working with MFM, who has already been a great support in building our team and developing PERCEPT. MFM has a strong track record of funding and supporting digital start-ups, and I look forward to working with Josh and the team as PERCEPT enters the next stage of its growth journey.”

Owen said: “Advising clients on making unlisted investments is beyond the scope of many advisers’ regulatory permissions and the industry is going to need significant support if it is going to be able to satisfy the rising demand from clients for the EIS and other similar opportunities. “Third party research and expertise will have an important role to play in helping advisers and wealth managers to work with their clients, but we will also need to assist advisers as they develop due diligence processes of their own. “Growth investments offer exciting potential but advisers will need help finding the right structures for their clients.” Colnvestor sets out to provide a new model for investing in growth companies. It invites individual investors to make investments in identified businesses, backed by fund managers, which then offer a coinvestment opportunity.

New investment service to help with VCTs A new investment service has been launched which helps experienced investors take advantage of the multiple tax reliefs offered by VCTs. It’s the idea of EQ Investors, the boutique wealth manager led by John Spiers. It sets out to address the increasing demand for quality tax-efficient products, by offering crucial analytical research of EQ’s ‘top picks’, including provider and product reviews. EQ is also launching a guide which provides details on how VCTs work, the benefits, risks involved and how to invest. Spiers said: “We are excited by this launch as we continue to expand our range of services. With the rumoured changes to pension tax relief, experienced investors will be looking for complementary options to supplement their investment

EIS Magazine · May 2016

portfolios. We expect demand for VCTs to outstrip supply for the foreseeable future as the number of opportunities for tax efficient investing by higher rate taxpayers reduces. As such, we aim to provide clear, current and reliable information to ensure our investors get access to the best opportunities.” Senior Analyst at EQ Sophie Muller said: “In depth interviews with VCT management teams are conducted at least annually. We assess the length of relevant management experience, as well as the quality, structure and depth of resources within the team. In addition to this, we require evidence of the manager’s commitment to both the firm and the VCT.”

Financial advisers to increase use of EIS New research has revealed that financial advisers think that their use of EIS in client portfolios will increase within the next 12 months. Called the 2015/2016 EIS Industry Report, the survey was prepared by Intelligent Partnership, a UK curator of education and insights on alternative investments. The survey, commissioned by the Enterprise Investment Scheme Association (EISA) financial planning committee, concluded that 61% of the 297 advisers they surveyed believed that their use of EIS would increase in the next 12 months. This represents an increase of 15% from the 2014/2015 survey. What’s more, lower pension limits and the threat to higher rate tax relief were cited as the two biggest drivers for increased use of EIS. The survey was conducted online and at events including the PFS regional conferences from October to December 2015. The survey said that the most common reason (96% of advisers) given for recommending EIS was the income tax relief. Over 76%, of advisers also cited inheritance tax (IHT) mitigation. Further to IHT mitigation, 57% of advisers stated that portfolio diversification was a primary reason for choosing EIS. What didn’t seem to concerns advisers, with only 10%

citing it as a reason, was the opportunity to invest in a particular sector or business. Research Director at Intelligent Partnership Daniel Kiernan said: “It’s no surprise that advisers are expecting to invest more in EIS this year, as changes to our pension system have strengthened the investment case for taxefficient investments like EIS. What’s perhaps more unexpected is the number of advisers who are utilising EIS for their IHT benefits. Perhaps this reflects the financial planning needs of clients who are concerned about passing on their wealth, but who don’t want to give us control of their assets or sacrifice any potential growth just yet.” Other conclusions of the report included that fact that the majority of 56% of advisers thought that the investment manager’s performance track record was the most important consideration when selecting an EIS. This differs from the results in 2014, where the most important factor given by 65% of advisers was the reputation and size of the investment manager. Sarah Wadham, the departing EISA Director General said: “It is clear advisers are realising the importance of tax-efficient investments such as EIS, as changes to pension contributions and retirement freedoms mean that some clients will need more sophisticated planning – EIS can be a powerful tax planning tool for the right client.”

A Spokesman Said seeks further £2.5m

A new price comparison website founded by former The Sun editor Kelvin MacKenzie is looking to raise up to a further £2.5 million. A Spokesman Said, chaired by MacKenzie, pictured above, and which received seed investment money from media tycoon Rupert Murdoch, is an EIS eligible investment. The company’s website sets out to provide a voice to consumers by giving them the chance to complain publicly about poor service from suppliers.

A company statement said: “The primary aim of the service is not to provide a forum to complain, rather to encourage both consumers and their suppliers to seek a resolution to the dispute. This is a valuable tool for both consumers who may not otherwise have their grievances heard, and for companies to manage their brand reputation and customer service. If the service provider does not address the consumer’s complaint in a satisfactory manner, then the website’s price comparison function would allow consumers to change suppliers.” A previous two funding rounds raised £1.25m. News UK & Ireland (headed by Murdoch) invested £1m and also plans to provide office space, support and management time to the start-up. Investors now have the opportunity to stake up to a further £2.5m at the same valuation as struck by News UK & Ireland. A Spokesman Said began generating revenue in September, but is currently focusing on driving visitor traffic to its site which currently stands at over 200,000 visitors per month. Backers of the company point to three main attractions to A Spokesman Said: it fulfills a unique role within the profitable price comparison website industry; the founder is a high profile former national newspaper editor; and, early investors included Rupert Murdoch and Jim Mellon. A Spokesman Said is being advised by Beaufort Securities. May 2016 · www.eismagazine.com

How to use EIS for long-term income planning EIS isn’t a one-and-done investment - it can help provide income in later life, says Dermot Campbell, Managing Director of Kuber Ventures Since the so-called ‘A-day’ pensions simplification legislation was introduced, more pensions legislation has been introduced than we ever had before, leaving advisers with the challenge of keeping on top of the new rules and retrospective changes. There are ongoing discussions of further restrictions to the lifetime allowance, reductions in tax relief and even talk of the UK moving to an American style 401k-type pension. We all know that the 20-times calculation for final salary scheme valuations is far removed from current transfer values and, were the government to change this calculation basis, then a significant number of

EIS Magazine · May 2016

clients would be pushed over the lifetime allowance. Pension freedom has also given a number of clients the option to diversify their pension pots into other investments and this has had the unintended consequence of boosting investment in buy-to-let properties. Now, the government is scrambling to constrain this by increasing the tax and compliance burden on property investors.

Pension freedom has also given a number of clients the option to diversify their pension pots into other investments

With increased access to pension pots and the certainty of annuities being slowly removed from the market and thereby leaving less competition, it seems that as far as retirement planning goes, cash is becoming king – so what other retirement planning options are open to the high-networth investor? What the government has really tried to achieve in constraining the benefits of pensions is to encourage people to invest in a way that will help to boost the economy. This is why there has been so much rhetoric about stakeholder ownership and venture capital investing using VCTs, EIS or SEIS.

Initial investment

Initial tax relief

EIS

£1,000

£300

PENSION

£1,000

£400

The starting point Pensions should always be the starting point for retirement planning. The reason is that pensions are specifically designed for retirement planning thanks to tax relief on contributions, the pension commencement lump sum, bankruptcy protection and restrictions on when you can access the capital. The issue is that you just can’t put enough into a pension anymore. Pension freedoms, along with the restrictions on both lifetime allowances and contribution levels, are sterilising many of the key benefits that pensions previously came with. Many advisers are looking to other investment media to help with their clients’ retirement solutions. EIS and SEIS provide a great example of such alternative solutions, offering both up-front tax relief and tax free returns at maturity together with inheritance tax efficiency. Because of the high-risk nature of these investments (like the AIM market they are unlisted shares), many IFAs have been put off considering this route in the past even though they regularly recommend clients to invest in fairly risky AIM ISA arrangements. In addition, many IFAs consider the EIS/ SEIS market to be a lump sum solution which is not suited to those clients who want to make regular contributions. What many may not be aware of is that there is, in fact, a regular premium route into this market.

Regular premiums: the alternative way forward The EIS market is a contract which gives the investor 30% income tax refund, IHT free status after two qualifying years and returns free of income and capital gains tax. In addition to this, there are very generous investment limits (£1 million per annum for income tax relief with the ability to go back a year for both contribution and income tax refund) and the ability to defer capital gains.

Many advisers are looking to other investment media to help with their clients’ retirement solutions

Let’s look at some of those reliefs in greater detail: If you invest into an EIS arrangement and if you haven’t invested into an EIS the year before, then you can carry forward the previous year’s £1 million premium allowance for income tax refund and use it on top of the current year’s one, therefore potentially giving you a £2 million investment in the current year - just try putting £2 million into a Sipp! The income tax reducer is at 30% and this is a reduction against all sources of income tax. As this is a reducer, you will want to maximise its effect to its full extent by using contribution levels that should ideally

Further tax relief

Net investment

Eventual post tax lump-sum on maturity/vesting

£400

£300

£1,440

£0

£600

£1,008

be targeted to a level where the 30% tax reducer does not exceed the income tax paid. An interesting side note is that a typical EIS arrangement runs for about five years and when it matures it can be reinvested in another tax efficient investment, potentially giving further tax relief. Given that the EIS tax reducer stands at 30% and a higher rate taxpayer could be receiving 40% tax relief on his pension contributions, using an EIS may prove to deliver greater tax benefits. Let’s suppose Mrs X invests £1,000 in an EIS. She receives an initial £300 tax rebate and holds the investment for five years until it matures, delivering £1,200 tax free, assuming there has been a 20% growth. Mrs X then reinvests the maturing EIS arrangements back into another EIS and receives a further £400 in tax relief. The investment matures in a further five years at which point she can decide to spend the benefits, or re-invest. The final proceeds, assuming a repeated 20% growth, would amount to £1,440. Effectively, an investment of £300 grows to £1,440 after tax. In contrast, were she to invest this £1,000 in a pension, assuming the same growth rates, she will receive £400 in tax relief upfront making the initial investment a net £600, and the investment proceeds will be £360 as a pension commencement lump sum, and £648 as a post-tax remaining fund.

May 2016 · www.eismagazine.com

In this case, £600 net investment has grown to £1,008 after tax. What to look out for From an IHT point of view, funds invested into an EIS are free of IHT after they have been under qualified investments for a two year period. Although this is good IHT relief, care should be taken if the client is not utilising the income tax reducer, CGT deferment or both.

EIS arrangements do not have a secondary market and, once you’ve invested, you have no access to those funds until they mature

Caution also needs to be taken on maturing EIS arrangements as, from the time they leave an EIS arrangement until they return to another qualifying business property relief (BPR) under the replacement property relief rules, they fall back into the individual’s

EIS Magazine · May 2016

estate for IHT purposes. That said, there are a number of different BPR qualifying investments including the likes of EIS, SEIS, most AIM investments and BPR (both portfolio and individual arrangements) available for you to reinvest back into. An EIS can also be used to defer a capital gain and therefore defer the payment of capital gains tax (CGT) to a later point. When you are deferring a tax bill of up to 28% and receiving a 30% income tax reduction then you can see how valuable this tax incentive is. Combine this with IHT relief and it looks to be overall a very good package solution. EIS arrangements do not have a secondary market and, once you’ve invested, you have no access to those funds until they mature. Again, for retirement planning this disadvantage can be covered by creating multiple arrangements through a regular premium which would mature at differing time points, giving the clients the option to take tax free funds or roll them on as a tax reducing investment.

Diversification is key So, this all sounds too good to be true - surely there must be some drawbacks? As these types of investments generally involve unlisted shares, they are high-risk and so care needs to be taken when looking at this market. One of the key ways to lessen risk is, of course, to diversify - a lot. Investing in funds via a platform and thereby using a selection of fund managers is one of the best ways to achieve this. Another method is to use regular premiums as when each investment is made most EIS managers are investing into new projects when existing projects close and therefore you get multiple investments even with the same manager. Are pensions dying? No – but they may take a different form.

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How to pick an EIS winner An expert reveals what makes him take a punt on a company. By Tom Bradley, Partner at Oxford Capital Nobody, least of all an investment manager, likes to equate investing with gambling. But there are certainly some parallels. When we invest in a company, the outcome is uncertain, there are hurdles and risks further down the track, and there is always a risk of failure. But we are not choosing companies based entirely on guesswork – our approach to investing helps us pick companies that have potential to succeed. In racing, a seasoned punter will only back a horse after asking themselves four key questions: • Is the horse fast? • How good are the jockey and trainer? • Do the distance, course and conditions suit the horse? • Do the odds offer adequate reward for the likelihood of success? We ask ourselves similar questions about investing. We will not back a company until we have built a detailed understanding of its chances of becoming valuable. Sticking rigidly to this principle, and asking all the right questions, can potentially reduce risk and increase returns.

EIS Magazine · May 2016

Is the horse fast? Part of the skill of early-stage investing is assessing whether a product or service has the potential to take off. For a company to achieve stellar growth, it usually needs to be either doing something that could not be done before, or doing something 10 times better than anybody else. The taxi app Uber went from a standing start to a $50 billion valuation in a little over five years, because it developed an innovative

There are hurdles and risks further down the track, and there is always a risk of failure

product that nobody else was offering and which customers instantly warmed to. No need to stand waiting on the street. No need to carry cash. A choice between cost and comfort. Uber’s eight million users clearly find this experience a lot better than hailing a cab the old-fashioned way. We recently invested in Push Doctor, another company with a great product that is changing an old-fashioned market. They offer online video

appointments with GPs through a website and a mobile app. Patients can book an appointment within minutes, and see a doctor any time between 6am and 10pm, 7 days a week. Of course, good products don’t develop themselves and they don’t sell themselves. The company needs to have a clear purpose and a genuine desire to serve their customers by providing great experiences. We will carefully consider the execution ability of a management team – do they have the right ethos and the ability to build a successful company around their product? When a company has already started to sell its product, it becomes easier to assess product quality. Rapid revenue growth or customer acquisition is a clear indicator that the company is gaining traction. Of course, this sort of measurable success also increases the value of the business and the competition for the deal. How good are the jockey and trainer? Companies do not make things happen, solve problems or work hard. People do. The quality and credentials of chief executives, senior executives,

board members and the team around them are a crucial factor in our decision to back a business. If we really rate a chief executive, it can increase our confidence in a company. Talented chief executives are in high demand, and rarely end up in charge of companies with little chance of success. Without stretching the analogy too far, A.P. McCoy doesn’t ride many seaside donkeys. The concept of the trainer is also important. A jockey might take most of the credit on race day but the horse is prepared by a team and the jockey is advised by a team. However strong the chief executive, you should not invest in businesses where this team dynamic does not exist and where the chief executives do not listen to the team around them. It is often said in technology businesses (usually in relation to key programming staff or ‘developers’) that the difference in productivity between the A+ people and the B+ people is greater than 100%. In other words, great people are worth more than twice as much as the ones who are just good, let alone the ones who are average or poor. Our experience bears this out. Working with the best people can be totally transformational. It is also important to avoid personalities that seek conflict. There is a very high correlation between hard work and success, and huge amounts of energy are required to succeed in the early stages of growth. If energy is wasted by internal politics and conflict, then a company’s chances of succeeding are diminished. Do the distance, course and conditions suit the horse? To win, a horse needs to be not just fast but well-suited to the

conditions on race day. When we evaluate a company, we will look closely at the size, pace of growth and competitiveness of the market the company is operating in. We need to understand the company’s capabilities in the context of what others are doing in the same sector. That said, for early stage investing it doesn’t necessarily matter if the market conditions look difficult, so long as the management team has the tenacity needed to overcome the obstacles ahead. For example, our portfolio company Linkdex operates in the highly competitive and rapidly evolving

Success, they say, is what happens when preparation meets opportunity

market for Search Engine Optimisation technology. But we weren’t put off investing, because we had confidence that the company and its management team were well-suited to the challenge. Market dynamics become more crucial as a company matures, not least because they can have a bearing on the eventual sale value. Do the odds offer adequate reward for the likelihood success? Put very simply, a great company only has potential to be a great investment if the price is right. If spotting the potential for success is the first key skill of investing, then constructing a sound deal at the right valuation is surely the second. There can sometimes be an argument for paying a premium for a stake in a truly promising business.

But to have a chance of achieving a high return, the discipline of realistic valuation is every bit as important as the ability to select strong companies.

What happens when the race starts? Having identified a strong company and an attractive deal – being on the right horse with the right odds – it is also critical to have a race plan. Success, they say, is what happens when preparation meets opportunity. The characteristics that allow a company and its leaders to both stick to their values and mission but also to respond quickly to opportunity or adversity are to be highly prized. Early stage companies can prosper if they are able to move faster and more decisively and work with greater focus in the pursuit of their goals. The only thing that you know for certain when you invest is that things will not work out as forecast. The context always changes and those with the talent and flexibility to survive in that environment are the ones we try to invest in.

Spreading the risk Of course, early stage investing is not about pinning all your hopes and dreams on a single horse. We invest in a diverse portfolio of companies operating in a variety of industries. This diversification can help to mitigate the risk of this kind of investment. Some companies may fall at the first hurdle. But others have a chance of making it to the finish line in true style.

May 2016 · www.eismagazine.com

Pensions vs EIS: What’s best for the clients? As pension reliefs are cut, advisers are looking for new ways to fund retirement. By Charles Owen, Founder of Colnvestor How do savers optimise the sums they are putting aside for later life in a climate when the tax relief available on private pension plans is slowly but surely becoming less generous? EIS is likely to be one increasingly popular option. This is a debate that has been occupying investors and advisers alike through the early months of this year as speculation mounted in the period running up to the chancellor’s March Budget. Pensions tax relief has always been seen as a relatively soft target for Mr Osborne, who needs to find more cash as he works towards his budget deficit goals, and the climate for higher earners is rapidly becoming more challenging. First, in April, the lifetime allowance – the amount of pension savings an individual can build up before steep tax charges become payable – will be reduced from £1.25 million to £1 million. At the same time, the annual pensions contribution allowance – already reduced to £40,000 from

EIS Magazine · May 2016

£50,000 in previous years – will be reduced for additional-rate taxpayers, with the cap coming down on a sliding scale as income increases. Anyone with an annual income of more than £210,000 will find themselves limited to annual contributions of just £10,000 to a private pension plan. The effect of these changes – even leaving aside the threat of cuts to tax relief – will be that better-off savers rapidly find themselves running out of room to contribute to private pension plans. Those who aren’t adversely affected by the annual allowance restrictions will very often be conscious of the lifetime allowance. In which case, it makes sense to think about other tax-efficient investment opportunities. Enter EIS, which could play an increasingly important role in the long-term financial planning strategies of increasing numbers of investors. The first point to make is that EIS is a proven entity: it has a long track record of bringing in funding for smaller businesses looking to raise

growth capital. While the failure rate of such businesses - worth less than £15 million with fewer than 250 employees - is considerably higher than for the companies to which pension savers are more accustomed, the government offers a generous range of tax reliefs that compensate investors for the extra risk they’re being asked to take on. Those tax reliefs are substantially more generous than what is on offer with a private pension plan. First, while the 30% upfront tax relief that EIS offers is set at a lower rate than higher-rate and additional-rate savers get from private pensions (at least for now), the annual investment limit for EIS is £1 million. That gives the opportunity to reduce the investor’s tax bill by as much as £300,000, assuming they have the income tax liability to cover it. As for capital gains (CGT) tax treatment, EIS exempts investors from paying any tax on the profits they make – in the same way as pension savers get this relief. But given that the annual contribution allowances give

EIS investors the opportunity to build up a much larger investment portfolio, this is more valuable too. Moreover, EIS rules also allow investors to defer CGT payable on another investment by reinvesting the profits within the scheme – this isn’t an option with private pension plans. Then there is the loss relief available on EIS investments – again, something not available to private pension savers. Where an EIS investment is disposed of at a loss, this can be set against the investor’s income for the year (less the income tax relief given). The comparison between EIS and private pensions becomes even more alluring as investors move into their retirement years. There is no tax to

pay when an EIS investment is realised and cash is returned – unlike with a private pension fund, where only 25% can be taken tax-free. Critically EIS investments are also outside of the estate for inheritance tax (IHT) purposes, as long as they’ve been held for at least two years. These very favourable tax treatments make EIS a really interesting option for investors running out of pension tax reliefs. Though they offer more generous tax treatment in many regards, the higher risk profile means most investors should consider them as a way of further diversifying investment portfolio’s, rather than as a direct alternative to private pensions, but there will be exceptions to that

EIS versus private pensions John Smith, 50, earns £125,000 a year and is keen to maximise his pension contributions. This year, he is able to invest up to £40,000 in his pension fund, claiming income tax relief at 40%– so the cost of the contribution is only £24,000. In fact, John’s employer contributes £10,000 to the fund on his behalf, which also counts towards John’s annual allowance, so his own contribution is limited to £30,000 before tax relief, which costs him £18,000. John is keen to invest more than this and has the disposable income to do so. EIS theoretically allows him to put as much as £1 million a year into qualifying investments,

(just as there will be those who don’t feel comfortable with EIS investment). Investors will, however, need to think carefully about how they get EIS exposure. For some, investing via a fund structure approach will be the right approach, just as they prefer investing in managed funds within their pensions. For many people, however, a more direct investment style will be the preferred route – in the same way as self-invested personal pensions have risen to the fore – with people building diversified portfolios of individual EIS-qualifying businesses through the increasing number of platforms that offer access to these opportunities.

but he can’t claim more relief than the income tax liability he has to cover it. John also decides to invest £40,000 in EIS companies, and is able to claim a reduction in his income tax liability of 30% of this sum, or £12,000. Considering this single year in isolation, a decade later John calculates he has earned an annualised return of 5% on both his pension fund assets and his EIS holdings. At age 60, both his pension and his EIS investment are worth £65,156. While in real terms the gain in the pension is greater than that within the EIS investment as a result of the lower investment cost John can only take 25% of his pension fund as a tax-free lump sum, while there is no further tax to pay on the EIS money.

May 2016 · www.eismagazine.com

How tech is driving the UK The Silicon Roundabout in Shoreditch is just the start of a UK technology roadmap. By Kenny Kemp, Consultant at The City Partnership The intense hype about Silicon Roundabout and the coding hipsters of Shoreditch has spread like wildfire across the UK. Now Cardiff, Bristol, Salford, Sheffield and Leeds and Edinburgh have become regional tech-hubs where technology-intensive companies are fired up for growth. Britain has been embracing the digital revolution with gusto. Over 12% of the nation’s GDP this year is expected to come from the internet economy, more than double our closest competitor, a G20 found – South Korea, which stands at 8%, while California, with its Silicon Valley, is only 5.4%. Yet, all of these companies require investors’ funding to scale-up because the major banks are still rather shy about supporting early stage companies that are risky. This is where EIS support has played an sterling part in the UK’s success story.

HM Revenue & Customs confirmed that 2,710 companies raised nearly £1.5 billion under EIS in 2013/14 and almost 2,000 companies raised £164 million under SEIS. The average investment per company under SEIS was £82,000.

Britain has been embracing the digital revolution with gusto. Over 12% of the nation’s GDP this year is expected to come from the internet economy

Since SEIS was launched in 2012/13, almost 2,900 individual companies have received investment through the scheme and over £250 million in investment has been raised. That’s big ticket cash. Par Equity, a venture capital fund manager based in Edinburgh,

has been building up a portfolio of investments in early stage EIS companies, with high growth potential. Paul Atkinson, one of its founders, says: “We’ve always been focused on technology companies, which is within the spirit of why EIS works best. These can be high risk but the rewards for success can be worthwhile. We’ve had several successful exits. It is about a having a track record for picking winners.’ One of Par Equity’s hot ticket investments is PureLifi, a spin-out from the University of Edinburgh, set up by Professor Harald Hass, who spent his career in wireless communications research and is transmitting data through LED light bulbs. The term LiFi was coined by the professor at TEDGlobal in 2011, and solar cells using LiFi were demonstrated at the same event in November 2015. Other Par

HM REVENUE & CUSTOMS 1.5 BILLION

GDP

Tech 12%

2,710 COMPANIES UNDER EIS

2013

EIS Magazine · May 2016

2014

investments include MiiCard, an internet identity business attracting attention, and Mallzee, an online shopping app which turned down an offer from Dragon’s Den. It recently secured £2.5 million of growth funding. Par Equity has had number of successful exits with Simple Audio, bought in 2013 by US hardware firm Corsair, and Aircraft Medical, a high-quality medical device company, bought by Medtronic in November 2015. However, there is still a task to bring more advisers around to the value of EIS. ‘I think there is an educational job to be done to persuade more of the significant independent financial advisers – especially those looking after funds – that a basket of EIS funds can bring in decent returns,’ says Atkinson. ‘By their nature, there will be failures, but an astute adviser will be examining the track record on

successful exits and the investment model more broadly.” Juno Capital, based off Regent Street in London, is another of the new breed of specialist alternative asset managers purring over British technology. One of Juno’s businesses in Purple Wi-Fi, which provides the wi-fi infrastructure hardware for retailers. It helps the cause that Sir Terry Leahy, former head of Tesco, is a director.

There is still an appetite for technology from highnet-worth private investors

“Most of us expect to walk into a store and have wi-fi available, but the organisation offering this wants something in return and this is customer information. What the wi-fi does is provide the system for the retailers to share data on customers. It is the application of technology to

personalise the shopping experience,’ says Julian Hickman, a partner at Juno. It is obviously the kind of business that excites investors. ‘EIS is a double-sided thing. It is as much about finding the companies to invest in, as it is to find investors for whom EIS is an attraction for making an investment,’ says Hickman. ‘There are lots of exciting technology companies that the UK government’s EIS scheme needs to support However, you can’t make any technology investment unless you have the investors to do it.’ Fortunately, Hickman says there is still an appetite for technology from high-net-worth private investors. ‘Many investors have entered the investment arena through lower risk, capital-protection EIS investment. This has been in renewable energy, anaerobic digestion, wind or solar and that has helped them understand the benefits of EIS. They’ve said: ‘Wow, this is exciting, I can see the benefit of

OVER 250 MILLION IN INVESTMENTS HAS BEEN RAISED

82,000

2,900 INDIVIDUAL COMPANIES RECEIVED INVESTMENT

SEIS LAUNCHED

AVERAGE INVESTMENT PER COMPANY UNDER SEIS 2012

2013

May 2016 · www.eismagazine.com

this, but now I want to take a bit more risk’, he says. Hickman says that high-net-worth investors became more comfortable with the concepts of putting in 100% and getting back a net 70%, rather than paying higher rates of tax. ‘If it all goes wrong, they also have the loss relief,’ he adds. More people, maintains Hickman, are saying they want to take a bit more risk. ‘We have a lot of investors who have ended up doing technology and riskier investments after coming through it by a lower risk route. I am very disappointed that this nature of contingent investing has almost completely been such down by the government.’ He says it is not impossible to find a way of balancing lower-risk investing with higher-risk investing. ‘What the government has done has been to shut down the financial adviser in the IFA world. The IFAs are the gate-keepers to most high-net-worth investors and if you shut them down from marketing EIS we will not see the same levels of venture investing in this country.’ The UK has to keep investing to stay ahead of its competitors, such as Germany, the United States and Japan. ‘We have been a world leader in life science, pharmaceuticals, in technology, in air and space. If we are to continue to support SMEs in these

environments, we need to ensure that the high-net-worth community is engaged effectively to invest in it. If you are going to do this, you need to engage their financial advisers,’ says Hickman.

Juno focuses on companies that have a value between £6.5 million and £20 million, with revenues of more than £1 million

Juno Capital also see exits as the oil to keep the machinery moving. ‘We are looking to invest in venture businesses that are going to demonstrate a strong multiple of return in a reasonably short time frame of three to four years. When you apply that parameter you end up time and again investing in UK technology,’ says Hickman, adding that his duty to investors is to find companies that can deliver a reasonable return. There is no shortage of seed and start-up funding in the UK, with CDIS and crowdfunding, but the challenge is with businesses that are scaling up. ‘For these scale-ups to commercialise their technology then need to get into the United States, the need to scaleup across Europe and deliver on the opportunities that they have bought for themselves – and they need funding

to achieve that. That’s where there is a problem,’ says Hickman. Juno focuses on companies that have a value between £6.5 million and £20 million, with revenues of more than £1 million. ‘I describe seed and start-up as a triumph of hope over reality. What we invest in is reality. This is businesses that have seen, encountered and overcome the unforeseen problems that a growing business will face.’ Although Hickman says ‘there can never be enough technology businesses driving forward’, not all of them deserve to grow. ‘There has to be natural selection because a lot of start-up businesses don’t deserve to grow because they haven’t got the basic business right,’ he says. ‘They are not fast enough to market, they don’t have a team that grows the business correctly, they don’t see the opportunity where it is, and they will fail.” EIS investors still walk away with their loss relief, and most investor accept this as part of the possible outcome when investing in early stage ventures. But the wider UK public must start to appreciate that this is more than simply the rich person’s game, but a fundamental driver of the tech economy.

The wider UK public must start to appreciate that this is more than simply the rich person’s game, but a fundamental driver of the tech economy

EIS Magazine · May 2016

Security and resilience: Investing in a dangerous world The world isn’t getting safer, and the science of safety is becoming an investment opportunity. By Douglas Dundonald, Will Addison and Tristram Riley-Smith of Anglo Scientific “Human kind cannot bear very much reality”, Britain’s security minister said (quoting T.S. Eliot) in a recent speech at London’s Policy Exchange, “but the reality is the terrorist threat we are facing in this country is unprecedented.” These words encapsulate the reason this is a good time to invest in innovative security solutions, through vehicles like EIS. The world is not getting any safer: • Geopolitical tensions are brewing: China in the Pacific, Russia in its near abroad, Pakistan against India, Saudi Arabia against Iran (with proxy wars between Sunni and Shi’a communities raging in the Middle East and North Africa); • Islamic extremists are attacking heretics and infidels around the world, with thousands inspired by the

propaganda campaigns of Al Q’aeda and the so-called Islamic State.

Markets sub-divide into different sectors: law enforcement and blue-light operations; safe cities and disaster resilience; aviation, cross-border and cyber security

• Further instability will be caused by growing pressure on the world’s resources (through global warming, the demands of burgeoning middleclasses in India and China; growing populations in Africa and Asia). The movements of people displaced by war, famine and drought, will intensify. The UK security sector has grown five times faster than the rest of the economy in recent years; and the global market will be worth $546 billion in 2022 (up from $305 billion in 2011). But with this growth comes great diversity. Markets sub-divide into different sectors: law enforcement and blue-light operations; safe cities and disaster resilience; aviation, crossborder and cyber security There is also great variety in solutions, including big data and forensics, sensors and imaging

May 2016 · www.eismagazine.com

systems, identity management and physical security tools. The security and resilience market brings great opportunities but also great challenges. The successful entrepreneur must understand the complex needs of those different subsectors and be capable of penetrating the dense undergrowth of research programmes out of which groundbreaking, innovative solutions could emerge. Once a good match has been made, between supply-base and market, the hard work of delivery has to be done. Anglo Scientific has established a track record here, progressing beyond the discovery phase to raise funds, build project teams skilled in design and developing, and work with teachercustomers to grow value from security sector investments. Anglo Scientific has embraced EIS as a way of attracting investors. The use of EIS is a good example of how to encourage investment into British companies and also help improve the security and resilience of the country. Investors are able to invest in the Anglo Scientific companies through the Anglo Scientific EIS Fund that is managed by Innvotec. Two example companies the fund is investing in are SeeQuestor and Radio Physics Solutions. SeeQuestor – founded by Anglo Scientific in July 2014: Video data is a large untapped forensic and security resource. Trillions of hours of CCTV is generated worldwide each year (200,000 hours of footage for the London riots alone, in 2011). But only a fraction of 1% is ever looked at because current practice involves one hour of ‘eyeballing’ by a CCTV analyst for one hour of data. Whilse video is regarded as ‘the third forensic’ (after finger-prints and DNA), there are severe challenges to using it productively. SeeQuestor is developing a product, based on patent-pending video analytics and a user-centred data management system that will transform the way police and security personnel deal with video. To solve more crimes and save more lives, by

EIS Magazine · May 2016

providing significant efficiency gains for those tasked with viewing video. SeeQuestor is collaborating with some of the largest forensic analysts of video in the UK (such as Scotland Yard and the British Transport Police) as well as international police forces to design, develop and trial this new capability, which meets some of the most pressing requirements of the Home Office’s VALE programme (video analytics for law enforcement). The product is currently undergoing testing and trials with version 1.0 scheduled to be rolled out in 2016.

Trillions of hours of CCTV is generated worldwide each year (200,000 hours of footage for the London riots alone, in 2011). But only a fraction of 1% is ever looked at

Market Overview The Intelligent Video Analytics (IVA) market is forecast to grow from $7.5 billion in 2012 to $21.5 billion in 2020. SeeQuestor aims to secure a subset of this market. It will sell software licences and hardware to law enforcement agencies (LEAs) at home and abroad; it also plans to use its system to run a bureau offering video analysis as a service. With 43 police forces alone in the UK (each potentially requiring more than one system) and with 4,000 LEAs identified in other geographies, the market is estimated at over $1 billion. Radio Physics Solutions (RP) – founded by Anglo Scientific in Dec 2009: The global markets for CCTV video cameras and night vision surveillance equipment were worth £10 billion and £4.6 billion respectively in 2015. Now, RP aims to add a new layer to the capabilities of the security industry. RP’s products will assist law enforcement agencies and the military in saving lives by detecting bombs, guns and knives from distance in environments where they could not be detected before.

RP’s products go beyond thermal imaging. The first product, MiRTLE, aims to deliver a further layer of security by providing early warning of threats concealed under peoples’ clothes, and so reduce the number of casualties caused by terrorists and criminals globally at schools, train stations, airports, government and military installations and entertainment venues. In the thermal imaging systems sector, Flir Systems Inc, a market leader, has generated revenues of £1 billion and is valued at £2.6 billion. In a similar manner, RP aims to become the leader in standoff concealed threat detection.

A changing pattern of threat The standoff threat detection market is growing rapidly. Homeland Security Research, based in Washington DC, estimates that cumulative 2015-2020 revenues in standoff IED, person-borne (PBIED) and vehicle-borne (VBIED) explosives and weapon detection across the globe will reach £5.6 billion, with a historical estimated compound annual growth rate (CAGR) of 47% in 2011-2014. Market growth is driven by the rising incidence of gun crime and terrorist attacks. Yet market size is limited by current technologies. Gun crime and terrorist acts cause loss of life daily. Currently there is no way to determine, at a safe distance, if a human subject or a vehicle is carrying concealed explosives or weapons. Two major trends are driving the increasing threat: one, wars are no longer conducted in a battlefield area but anywhere in the world, in rural and urban areas; and two, as urban areas grow, so too does the problem of urban armed violence. While urban areas are not necessarily more violent or less safe than rural areas, their size concentrates both the perpetrators and the victims of violence. Products and Services MiRTLE – Millimeter wave Radar Threat Level Evaluation Both MiRTLE 10 and 30 systems use the same learning neural network algorithm to detect PBIEDs, bombs, guns and knives. Each can be used

as a stand-alone solution, or used in tandem for initial long-range screening and short-range scanning. They can also be networked into an integrated security solution. One of the key advantages of MiRTLE is its ability to detect a person carrying a threat and provide a real-time video image of an individual that a security network operator might wish to follow or detain. During 2016, RP is optimising MiRTLE’s capability to be operated in auto-scan mode, removing the operator from the process. This reduces the operational manpower

requirement, and also prevents missed detections caused by human error due to fatigue. When a threat is detected, MiRTLE can provide audible alarm and visual indicators, eliminating the need to have a human operator staring at a monitor for long periods. Human intervention is only required once a threat has been identified. In its current version, MiRTLE offers a probability of detection of over 96% for PBIEDs with a low rate (5%) of false positives, based on independent tests conducted by the US Army Maneuver Support Center of Excellence

at Fort Leonard Wood, Missouri. Probabilities of detection of guns and knives are lower; currently less than 50%. Detection rates are forecast to improve over time as the product and the neural network algorithms evolve. Radio Physics is revenue producing (having sold beta products) and expects to start shipping products to customers in the second half of 2016; it has demonstrated product in over 16 Countries and is building a network of channel partners to support customers World Wide.

May 2016 · www.eismagazine.com

INFORMATION

MEMORANDUM For further information, please contact

Nicola Johnston Head of Finance nicolajohnston@chfmedia.com +44 (0)845 512 1000

www.chfenterprises.co.uk i

EIS Magazine 路 May 2016

Open Offers Highlighting some of the key offerings currently available to IFAs

Investment Key:

EIS

EIS Open

January 2014

Open-ended

Amount to be Raised: Unlimited

T. 020 7408 4070 E. info@pumainvestments.co.uk www.pumainvestments.co.uk

EIS Open

December 2015

At Capacity

Amount to be Raised: £20m

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

SEIS

VCT

SITR

IHT

BPR

PUMA INVESTMENTS - PUMA EIS Puma EIS employs an investment strategy similar to that successfully deployed by the Puma VCTs and aims to provide investors with downside protection in a carefully managed portfolio. Building on Puma’s established track record in tax efficient investments, Puma EIS targets asset-backed businesses aiming to provide downside protection for investors through a portfolio exposure to HMRC pre-approved companies. Successful Deployment: Puma EIS was the largest fundraise of any new EIS with a capital preservation strategy launched in 2013/14 tax year. All funds raised were successfully deployed into companies with HMRC Advanced Assurance before the end of the tax year end. Allotment Dates: The discretionary management service has no fixed closing date. Puma EIS intends to make quarterly allotments with an allotment shortly in advance of the tax year-end each year. Strong Track Record: Building on the market leading track record of the Puma VCTs which operate a similar asset-backed investment strategy. Realisations: It is envisaged that investments in Qualifying Companies will be realised within 3 to 5 years. Investment Size: Minimum subscription is £25,000 with no upper limit.

TIME:EIS TIME:EIS invests in shipping, offering investors an asset backed opportunity in a global industry that has been established for thousands of years. Shipping is a sector recently identified by the Government as vital to the UK economy and one it is keen to support. Targeting a base case return of £1.27 for each net 70p invested, this noncontentious business model makes TIME:EIS an excellent fit within the EIS regulations – which is why advance assurance from HMRC has already been granted. TIME:EIS has an initial capacity of £20 million which will be split across four tranches. Alongside our specialist EIS team, support is provided by third parties with substantial experience in shipping. Key information for TIME:EIS • Asset backed, with investment realisation expected within 4-5 years • Market is currently at a historic low point, creating potential for significant upside • Each vessel purchased without use of debt, thereby reducing the overall risk profile • No Annual Management Fee • Highly rated by independent researchers • Minimum investment £10,000 May 2016 · www.eismagazine.com

EIS Open

Now

Evergreen

Amount to be Raised: N/A

Par Syndicate EIS Fund The Par Syndicate EIS Fund is an evergreen EIS fund, unapproved by HMRC, investing in innovative high growth potential companies with a view to generating capital gains. The fund, managed by Par Fund Management Limited, made its first investment in December 2012. The fund’s mandate is to invest alongside (and on the same terms as) business angel syndicates, and usually, but not exclusively, co-invests with the Par Syndicate, a leading business angel syndicate that has been investing since 2009. The fund may be promoted to retail investors under COBS 4.7. Independent research reports have been published by Hardman & Co. and MICAP.

T. 0131 556 0044 E. info@parequity.com www.parequity.com

EIS Open

Now

N/A

Amount to be Raised: £5m

T. 020 3011 5095/5096 E. info@symvancapital.com www.symvancapital.com

EIS Open

04/06/2015

24/06/2016

Amount to be Raised: £25m Minimum Investment: £50,000

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

EIS Magazine · May 2016

Symvan Technology EIS Fund Symvan’s funding strategy embodies the continuity of our philosophy: The greatest potential gains in venture capital investing rest with the successful earlystage investor. Symvan Capital is currently marketing the Symvan Technology EIS Fund. The aim of the Fund is to focus investment in businesses which have established plans and management teams, have demonstrated growth potential with strong commercial opportunities, and are planning to exit within five years. Symvan’s ‘life-cycle’ approach to EIS investing mitigates early-stage risk of the investment proposition. The Fund is focussed on ‘post-seed’ financing, where companies may have already raised early-stage funding, some possibly under SEIS and having achieved milestone developments since then. Symvan has seeded the investee company and raised money through our angel investor network, thus ensuring that the Fund invests in companies that Symvan knows well through board representation, have reliable corporate governance and are exposed to a broad range of sectors. Investors are able to claim relief on the full amount of their subscription as there are no investor fees at the time of investment.

Calculus Capital EIS Fund 16 Calculus Capital, creators of the UK’s first approved EIS Fund and three time winner of EIS Fund Manager of the Year, is proud to present its 16th EIS Fund.

Investors can benefit from over 16 years of invaluable investment experience and a strong track record of delivering excellent results to investors. EIS Fund 16 offers investors a portfolio of at least six qualifying companies (the historic average is eight) across a diverse mix of sectors. While the Fund targets capital appreciation, capital preservation is key, this is underpinned by our robust investment process, detailed investment agreements and investment strategy of focussing on established firms with the following characteristics: • The ability to achieve our target IRR of 20% • Experienced management teams • Successful sales of proven products or services • Revenue generating with a strong commercial proposition • Profits or a clear path to profitability • Clear route to exit

The 12-18 month investment programme commences after the relevant closing date. We value our reputation for personal service as much as our investment record, and are focused on providing an excellent client experience.

EIS Open

Evergreen

Amount to be Raised: No Max Min Investment: £25,000

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

EIS Open

01/08/2013

N/A

Amount to be Raised: Uncapped

Oxford Capital Growth EIS Through the Oxford Capital Growth EIS, investors can build a portfolio of shares in 6-10 small or medium-sized companies over a period of roughly 12 months. Each investment should be eligible for EIS reliefs, including 30% income tax relief and taxfree gains. Investee companies could be operating in a wide range of industries – past investments have spanned sectors from digital marketing to sustainable agriculture – but they will all be businesses that have potential to grow rapidly. Oxford Capital works closely with the investee companies, helping to accelerate commercial development with the aim of achieving a profitable exit, usually through either a trade sale or a stock market listing. The Oxford Capital Growth EIS targets a return of 2.5x the amount invested (net of applicable fees and including the impact of EIS income tax relief), aiming to return the majority of proceeds 4-6 years after initial investment.

Deepbridge - Technology Growth EIS The Deepbridge Technology Growth EIS represents an opportunity for investors to participate in a portfolio of actively-managed growth-stage technology companies, taking advantage of the potential tax benefits available under the Enterprise Investment Scheme. The Deepbridge Technology Growth EIS is a diversified portfolio of actively managed high-growth companies seeking commercialisation funding. The Deepbridge EIS invests in companies that have a proven technology, clear intellectual property and are operating in a high growth/high value market sector. Focused on investing in high growth companies that are seeking to commercialise and expand, specifically in three sectors: • Energy & resource innovation; • Medical technology • IT-based technology

T. 01244 746000 www.deepbridgecapital.com

EIS Open

Now

Evergreen

Minimum Subscription: £10,000

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

Rockpool’s EIS Portfolio Service Rockpool’s EIS Portfolio Service offers an alternative to traditional EIS funds as all investment is direct into quality private companies. Investors can choose the Managed service and build a portfolio of EIS qualifying private company investments to suit their investment strategy and required diversity through the Managed service. Alternatively, investors can choose the companies to invest in and build a bespoke portfolio through the Self-select service.

Two strategies are available: Growth and Asset-rich. Asset-rich sectors include: crematorium operation, construction project delivery, managed storage services and children’s nurseries.

T. 0207 015 2150 E. team@rockpool.uk.com www.rockpool.uk.com

Rockpool’s model offers full transparency and control with opportunities to meet the management, regular updates on the investment performance and an on-line portal for latest valuations.

∞ Managed service – Minimum application of £10,000 with a minimum investment of £2,500 per company. ∞ Self-select - Minimum investment of £10,000 per company.

May 2016 · www.eismagazine.com

EIS Open

Now

N/A

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

T. 020 7416 7780 E. contact@downing.co.uk www.downing.co.uk

EIS

SEIS

Open

January 2015

N/A

Amount to be Raised: £5m

T. 020 7873 2122 E. seis@jensonsolutions.com www.jensonfundingpartners.com

EIS

SEIS

Open

Now

Evergreen

Minimum Subscription: £20,000

T. 020 7952 6685 E. info@kuber.uk.com www.kuberventures.co.uk

EIS Magazine · May 2016

Downing Ventures EIS - High risk, high potential return Our Downing Ventures EIS focuses on early-stage UK technology companies, offering our investors a high risk, high potential return investment opportunity with attractive EIS tax reliefs. We believe that our portfolio is one of the most diversified in the UK venture capital market, with 21 investee companies as at 1 April 2016, spread across a range of sectors including life sciences, education technologies and consumer internet. We aim to allocate a portfolio of between 8 to 10 of these companies to each subscriber in order to spread risk. We have built strong relationships with major partners such as the LCIF (London CoInvestment Fund), the MoD (Ministry of Defence) and the incubator Webstart Bristol. We are always looking for talented management teams and new investment opportunities. Our Ventures team receives and analyses on average 40 new investment opportunities each month (based on the average number of investments opportunities reviewed from 01/10/2014 to 30/09/2015). This financial promotion has been approved by Downing LLP, authorised and regulated by the Financial Conduct Authority (FCA). This promotion is directed only at FCA authorised advisers. For more information, including the risks, please visit www.downing.co.uk.

Jenson Funding Partners - SEIS & EIS Fund 3 We are pleased to follow-up our first two funds with a combined SEIS and EIS Fund (‘Fund 3’). Our offering allows investors to choose whether they want to invest solely via SEIS or EIS or to split their funds across SEIS and EIS investments. The Fund aims to target exciting new innovative and disruptive technologies to be nurtured alongside existing investment opportunities that require follow-on investment to fully exploit commercialization of a proven business model. At Jenson we aim to offer these businesses far more than just funding. To date, we have actively advised entrepreneurs to re-evaluate business models, reduced projected costs and introduced potential executives, partners, customers and suppliers as part of the value added service we provide. Further we believe the addition of an experienced finance director to the management team of Investee Companies, even on a part-time basis, will enhance returns. This is why each investment is allocated a Jenson finance director a key differentiation between ourselves and other SEIS and EIS providers. The combined SEIS and EIS structure is designed to provide increased diversification as a portfolio investment. The balance between capital growth, portfolio risk and time horizon is maximised, whilst enhancing the tax advantages available.

Kuber Ventures Multi Manager Platform Kuber Ventures Alternative Investment Platform allows investors to create a portfolio across different Fund Managers for EIS/SEIS/BPR investments. Through a single application and depending on the scheme selected, investors can create a diversified spread of qualifying investments. Investors may select individual funds or choose to achieve further diversification by investing in one of the Kuber strategies available. Our strategy choices include: • Business Property Relief (Minimum Subscription £50,000) • Generalist asset focused strategy • Media asset focused strategy • Long term investment strategy • Seed EIS strategy • Seed and early stage growth strategy • Seed EIS media strategy • Mature growth strategy • Diversified growth strategy

EIS

SEIS

Open

01/10/2015

Evergreen

Amount to be Raised: N/A

T. 020 7060 3773 E. chris@boundarycapital.com www.boundarycapital.com

VCT Open

November 2015

31/05/2016

Amount to be Raised: £30m

T. 020 7408 4070 E. info@pumainvestments.co.uk www.pumainvestments.co.uk

VCT Open

26/10/15

Multiple

Minimum Investment: £5,000

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

Boundary Capital AngelPlus Fund AngelPlus Fund from Boundary Capital is an early stage technology fund with unique features and blended EIS and SEIS benefits. Its main advantage is that it only invests alongside ‘Venturers’ who are experienced entrepreneurs and executives who invest their own money alongside Boundary and take an active board seat alongside Boundary’s investment director. This helps to derisk the investment and adds value to the founders. Boundary nurtures a network of 300+ Venturers. There are also coinvestment opportunities for investors in AngelPlus, who get private access to Boundary’s private dealflow and briefing notes. The Team at Boundary Capital are experienced entrepreneurs and investors themselves and have over 60 year’s collective venture capital experience and between them have led 14 funds with over £200m under management and achieved over 60 exits with aggregate returns ranging from 1.4 to 3.0x. There are no fees to pay by investors so 100% of the fund is invested. Rebates are available to introducers.

PUMA INVESTMENTS - PUMA VCT 12 Puma VCT 12 builds on the market-leading track record of previous Puma VCTs. Puma VCT 12 will adopt the same, proven investment strategy primarily investing in established businesses in the form of ordinary equity together with senior secured loans. Strong Track Record: Puma VCTs I to V head their peer group for total return. Puma VCT V, the latest VCT to close, delivered a total return of 106.3p per share, (equivalent to a 9.4% annual return) making it the highest return to date for a limited life VCT. Dividends: Target average annual tax-free dividend equivalent to 5p per share over the life of the fund, commencing from April 2018. Five Year Life: It is envisaged that after 5 years, the Directors will propose a resolution for shareholders to vote on winding-up the Company. Investment Size: Minimum subscription level is £5,000.

Calculus VCT plc D Share Offer is OPEN for Subscription Calculus Capital are best known in the market for their skills and experience as an investor in established, unquoted SMEs. The awards we regularly win are evidence of that. Our long standing investment team and diligent investment process have led to an exceptionally strong track record of investment success. The key points of the D Share offer are: • Calculus VCT plc aims to pay an annual dividend of 4.5% of NAV from the first year (6.1% tax free on net cost after 30% tax relief), the company has a successful track record of delivering dividends to 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. • Our experienced investment team and thorough investment process have produced impressive dividend performance and exit returns for investors. • Early bird discounts: 1.0% discount for subscriptions received by December 18th 0.5% discount for subscriptions received from December 19th to January 29th 0.5% additional discount for existing Calculus VCT plc investors The full Prospectus is available on our website: www.calculuscapital.com May 2016 · www.eismagazine.com

VCT Open

Now

15/07/2016

Minimum Subscription: £3,000

T. 0131 503 9100 E. info@amatiglobal.com www.amatiglobal.com

IHT Open

October 2014

Open-ended

Amount to be Raised: Unlimited

T. 020 7408 4070 E. info@pumainvestments.co.uk www.pumainvestments.co.uk

IHT Open

June 2013

Open-ended

Amount to be Raised: Unlimited

T. 020 7408 4070 E. info@pumainvestments.co.uk www.pumainvestments.co.uk

EIS Magazine · May 2016

Amati VCTs Top Up Offers 2016/2017 Amati Global Investors is a well-established manager of AIM-based VCTs. The Offers provide existing and new investors the opportunity to invest in one or both of Amati VCT plc and Amati VCT 2 plc: •Investment into an existing portfolio of more than 60 companies in each VCT, covering both high-growth and maturing businesses. •Tax free dividends, targeted at 5-6% of year-end NAV (although there is no guarantee the targets will be met). •AIM based VCTs typically have a more diversified portfolio than other types of VCT, and are likely to be invested in larger, more established companies, with transparent market pricing and reasonable liquidity. • Minimum subscription £3,000 or £2,500 per VCT if applying for both Offers. Should you wish to receive monthly Amati fund factsheets, please request from info@amatiglobal.com To view remaining capacity for 2016/2017, please visit: http://amatiglobal.com/avct_share_offer.php

PUMA INVESTMENTS - PUMA AIM INHERITANCE TAX SERVICE Puma AIM Inheritance Tax Service is a discretionary service that seeks to mitigate Inheritance Tax by investing in a carefully selected portfolio of AIM shares. The Puma AIM Inheritance Tax Service is also available in ISAs. Portfolio Service: A discretionary portfolio service that seeks to deliver long term growth focusing on quality companies listed on AIM. Inheritance Tax: It is intended that investors will benefit from relief from Inheritance Tax provided investments are held for at least 2 years prior to and at the point of death. Minimum subscription of £15,000 with no maximum. Available in ISAs: Whilst ISAs are extremely tax efficient during the holder’s lifetime, upon death ISA balances may be subject to a 40% IHT liability. Investing in a portfolio of qualifying AIM stocks allows holders to mitigate Inheritance Tax while still retaining the benefits of an ISA. ISA Transfers can be accepted from existing providers as well as new investments.

PUMA INVESTMENTS - PUMA HERITAGE Puma Heritage’s core focus is on secured lending. Its primary objectives are to preserve capital and mitigate risk. Strategy: Conservative trading strategy focused on secured lending. Flexibility: Choice of income or growth shares and ability to switch between them. Experienced Adviser: Puma Heritage has appointed Puma Investments as its trading adviser. Aligned Interests: The interests of Puma Investments (the trading adviser) and Shareholders are entirely aligned: Puma Investments will not receive any performance fees and its annual advisory fees are only paid in full if the minimum target annual return is paid in full. Liquidity: Twice yearly opportunity to access capital (subject to terms set out in the Prospectus). Subscription Amount: Minimum subscription of £25,000 with no maximum. Inheritance Tax: It is intended that a subscription for shares in Puma Heritage will benefit from relief from Inheritance Tax provided the shares have been held for at least 2 years prior to and at the point of death.

IHT Open

Now

Evergreen

Minimum Subscription: £50,000

T. 0207 015 2150 E. team@rockpool.uk.com www.rockpool.uk.com

IHT

BPR

Open

Now

Evergreen

Minimum Investment: £50,000 Amount to be Raised: Unlimited

T. 020 7201 8989 E. contact@triplepoint.co.uk www.triplepoint.co.uk

Rockpool’s Managed Inheritance Service Rockpool’s Managed Inheritance Service is designed to deliver 100% exemption from inheritance tax after two years. Investment through Rockpool’s Managed Inheritance Service will be made in unquoted shares in specialist lending companies who provide loans to corporate borrowers. Our objective is to deliver a 5% net annual return with low risk to capital and the flexibility to take income or accumulate gains. The service has a simple, low cost transparent structure. Rockpool’s Managed Inheritance Service facilitates adviser charges or introducer fees.

Triple Point Estate Planning Service Triple Point Estate Planning Service is designed to meet investors’ requirements for an inheritance tax mitigation solution that is clear and straightforward. This allows them to remain in control of their assets with ongoing access to funds and a rapid IHT Qualification after two years. This service gives investors access to our two established strategies, built and managed by a team with a proven and profitable 10 year track record. Navigator Strategy • Lending and leasing to a large and diverse range of UK-based small and medium sized businesses • 4.0%-6.0% per annum targeted returns, net of fees • £5,000 average contract value of underlying investments • £176m of funding provided to date Generations Strategy • Leasing, lending and infrastructure funding to the public sector (Local Authorities, NHS) and to good quality companies, • 1.5%-2.5% per annum targeted returns, net of fees • £250,000 average contract value of underlying investments • £275m of funding for leasing and infrastructure provided to date Please contact the sales team for more information on this offer or Triple Point’s EIS and VCT products. Investments can be illiquid and the value of your investment is not guaranteed.

May 2016 · www.eismagazine.com

BPR Open

Evergreen

Amount to be Raised: No Max

T. 020 7065 6699 E. enquiries@marianainvestments.com www.marianainvestments.com

BPR Open

Evergreen

Amount to be Raised: Unlimited

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

EIS Magazine · May 2016

Mariana Estate Planning Solution Mariana Estate Planning Solution (Mariana EPS) is an evergreen BPR portfolio service managed by Enterprise Investment Partners LLP (Enterprise) with Mariana Capital Markets LLP (Mariana) as the Investment Adviser. The service is designed to be an investment which, if held for at least two years and at the time of death, can be used to shelter part of an individual’s estate from Inheritance Tax. The service is run under a strict capital preservation mandate; it is seeking to invest in a separately operating BPR qualifying company whose primary trade is anaerobic digestion (AD). Mariana has partnered with a major subsidiary of a FTSE 100 company – the company has been in business for over 100 years and are the world’s second largest producer of sugar. This company wish to strengthen the relationship with its farming supply chain, through the delivery of a program of farm-based AD plants. In return for a fully funded solution, this company will help to operationally de-risk the project via the provision of deal flow, robust feedstock and maintenance contracts and long-term operational supervision. Mariana aim to provide regular liquidity to Mariana EPS investors; exit opportunities are available on a monthly and quarterly basis. Enterprise, the Investment Manager, has a strong track record, has raised over £200 million in tax efficient investments in the last four years and has substantial experience in the sectors in which this products sit.

TIME: CTC (Corporate Trading Companies) TIME:CTC is our bespoke Inheritance Tax (IHT) solution for corporate investors, which boasts an impressive 20 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 Property Relief (BPR). The focus of TIME:CTC is on capital preservation by investing in asset backed businesses which qualify for BPR. These businesses include secured lending, renewable energy 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 BPR qualifying assets. To date more than 500 of our clients have already achieved BPR on their investments.

BPR Open

Evergreen

Amount to be Raised: Unlimited

T. 020 7391 4747

TIME:Advance TIME:Advance is a discretionary management service that allows investors to access Business Property Relief (BPR) 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 with no debt which qualify for BPR. These businesses include secured lending, renewable energy and self-storage. The product is managed by an expert team, with a proven 20 year track record of success in achieving BPR for investors.

E. questions@time-investments.com www.time-investments.com

BPR Open

01/07/2015

N/A

Amount to be Raised: Uncapped

T. 01244 746000 www.deepbridgecapital.com

BPR Open

Evergreen

Amount to be Raised: No Max Min Investment: £50,000

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

Deepbridge IHT Service The Deepbridge IHT Service is designed to deliver capital preservation from a portfolio of Business Relief qualifying renewable energy companies that seek to have a high degree of asset-backing and a business model based on the Renewables Obligation, the UK Government subsidies for the generation of renewable energy. Utilising Business Relief, subscriptions may be eligible for exemption from IHT after a minimum of two years. The Deepbridge IHT Service has a target priority return of 6% per annum after the second year. Investment criteria: • Attractive subsidies: The UK Government offers subsidies to the renewable energy sector, including Renewable Obligation Certiﬁcates and Feed-in-Tariffs. • No planning risk: Investments will be made in projects with all the necessary permissions in place, providing a known cost base for the investment.

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

Oxford Capital Estate Planning Service The Oxford Capital Estate Planning Service is an investment which, if held for at least two years and still held at death, can be used to shelter part of an individual’s estate from Inheritance Tax. The Estate Planning Service provides a range of investment options, targeting differing levels of capital growth and dividend income. Should their circumstances change, investors can request access to part or all of their capital, by asking Oxford Capital to sell their underlying shares. Investors in the Estate Planning Service will acquire shares in unquoted trading companies. Managed by Oxford Capital’s infrastructure investment team, these trading companies will make equity investments in, and loans to, companies which in turn will own and operate revenue-generating infrastructure assets, such as renewable energy installations. The investor’s shares should qualify as ‘Business Property’, and therefore be eligible for 100% relief from Inheritance Tax through Business Property Relief, if held for the requisite period.

May 2016 · www.eismagazine.com

Market insight, as deep as the ocean At Mariana we understand what makes a great tax efficient investment and what doesn’t. A strong ethos for capital preservation, careful planning, modest but secure returns and complete transparency, you’ll soon see why we stand out from the crowd. We will soon be launching a range of estate planning and EIS solutions, for further information please call one of the team on 020 7065 6699 or visit www.marianacapital.com

Mariana Capital Markets LLP is authorised and regulated by the UK’s Financial Conduct Authority. FCA registration number is 551170. It is incorporated in England and Wales, Company No. OC363748.

EIS Magazine · May 2016

TIME to look again

Innovative solutions, defensive investments TIME provides tax efficient investment solutions and we’re proud to say we’re rather good at it with more than £500 million of assets under management and a 20 year track record of success. What stands us apart in our market is our focus on seeking consistent stable returns for our investors, which we deliver through a defensive investment strategy.

We offer the longest track record of all BPR providers (20 years and counting)

Our distribution team of 19 provides national coverage to help advisers provide solutions tailored to their clients’ needs

We focus on capital preservation throughout our investment solutions

What do we look for when investing? Predictability

We’re dedicated to the adviser market; we don’t accept direct client investments

We pride ourselves on providing genuine transparency about where and what we invest in

Asset backing Income generation

We have an in house team of 12 investment specialists, offering a real depth of experience

Find out more 020 7391 4747 questions@time-investments.com time-investments.com This notice is aimed at financial advisers only and is not intended for retail clients. TIME Investments is a trading name of Alpha Real Property Investment Advisers LLP and is authorised and regulated by the Financial Conduct Authority.

May 2016 · www.eismagazine.com

Delivering calculated excellence for your clients We offer a range of tax-efficient investments with a proven track record of delivering for our investors and the businesses we support. Our VCT, IHT, EIS and AIM investments suit a variety of tax planning needs which our expert team are happy to support you and your clients with across every step of the process. Call our Business Development Team on 0207 408 4100 or visit pumainvestments.co.uk to find out more.

This advertisement is an exempt financial promotion issued by Puma Investments. It is for the use of professional advisers only and should not to be relied upon by retail clients. Puma Investments is a trading name of Puma Investment Management Limited which is authorised and regulated by the Financial Conduct Authority. Our offerings place your clientsâ&#x20AC;&#x2122; capital at risk and investors may not get back the full amount invested. The tax treatment of our offerings depends on individual circumstances and may be subject to change. Past performance is not a reliable indicator of future results.

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