Eis yearbook lr (1) by Alex Sullivan

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A DIVERSITY OF GROWTH EIS / SEIS FUNDS – BROUGHT TO YOU BY INNVOTEC AND ITS STRATEGIC PARTNERS

By Sarah Wadham, EIS Association Director General

Anglo Scientific EIS 6.

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.

IFA Magazine Publications Limited, The Old Wheelwrights, Ham, Berkley, Gloucestershire GL13 9QH Full subscription details and eligibility criteria are available at www.eismagazine.com ©2015. All rights reserved.

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.

Telephone: +44 (0)117 9089 686

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.

Editor: Michael Wilson editor@ifamagazine.com

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.

Publishing director: Alex Sullivan

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.

Design: Fanatic

Renewable Energy Remains Priority By Josh Knight, partner at Mariana Capital

12. Evaluating Risk And Maximizing Opportunity Using EIS 17. Growing Number of Advisers Recommending EIS To Clients 22. Inheritance Tax – The Second Most Resented Tax In The UK’

alex.sullivan@ifamagazine.com www.fanaticdesign.co.uk

Odyssey Mission SEIS

EIS Magazine is for professional advisors only. Full subscription details and eligibility criteria are available at www.eismagazine.com

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.

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 without 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.

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.

27. Interview: Rockpool Key To Success Lies In Network Of Investors

29. Interview: Jenson Investing In Companies At Earlier Stage

31. Interview: MMC Ventures Looking For Fast-Moving Companies

34. Interview: Octopus Octopus Investments: An investment company with a difference

37. Interview: Amati We Should AIM Higher

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.

Upcoming Events ETF Masterclass for Advisers

FinTech SEIS 2016

An Adviser Seminar on ETFs from IFA Magazine and EIS Magazine. Opportunity for advisers to get face-to-face access with some of the leading tax efficient investment managers in ETFs.

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.

5th November 2015 The Capital Club, London

Companies within the FinTech SEIS Fund will benefit from the complimentary knowledge and expertise of the parties involved.

Registration is free Full details at www.ifa-events.com

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

Email: info@innvotec.co.uk

Welcome By Michael Wilson, Editor

EIS Magazine is published by

C R E A TING SOLU TIONS

Tel: +44 (0) 20 7630 6990

Foreword

Web: www.innvotec.co.uk

39. Interview: Mariana Capital Blue-Chip Investment Banking Team Take-On EIS Space

42. BPR & Tax Planning Tony Müud, Tax & Trusts specialist at St. James’s Place, explores an option that’s often overlooked

46. EIS Guide A comprehensive listing of EIS, SEIS, VCT, BPR, SITR providers and schemes

42. Open Offers

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

Opportunity for advisers to get face-to-face access to some of the leading tax efficient investment managers, operating in a variety of different tax efficient structures (VCT, EIS, SEIS, BPR).

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.

www.eismagazine.com · Yearbook 2015/16 VA0815

Foreword By Sarah Wadham, EIS Association Director General

In 2013/14, the latest years for which statistics are available, nearly £1.5 billion was raised for 2,710 companies under EIS and £164 million was raised for 2,000 companies under SEIS

Invest in energy companies through an EIS. Another bright idea from Octopus. At Octopus we’re a big admirer of bright ideas. That’s why we love the Enterprise Investment Scheme (EIS), a government-backed initiative which offers investors a number of ways to reduce their tax bills. We also love the investment potential of the energy sector which is undergoing a huge transformation. So why not combine these two bright ideas into one? We have. It’s called Octopus EIS.

To find out more, talk to your Business Development Manager on 0800 316 2067 or visit octopusinvestments.com.

Important information For professional advisers only. Not to be relied upon by retail investors. The value of your investment, and any income from it, could fall or rise. You may not get back the full amount you invest. Tax treatment depends on your circumstances and may change in the future. The tax reliefs you can claim will depend on the companies we invest in maintaining their EIS-qualifying status. Issued by Octopus Investments Limited, which is authorised and regulated by the Financial Conduct Authority. Registered office: 33 Holborn, London, EC1N 2HT. Registered in England and Wales No. 3942880. We may record calls to help improve our customer service. Issued: 15/08. CAM02520-1508

I am so pleased to have been asked by IFA Magazine to write the foreword to the EIS Yearbook 2015. It is now two years since I was appointed as Director General of the EIS Association. During this time we have seen an unprecedented growth and wider interest in EIS and SEIS investing. This has been driven by the increasing recognition among Financial Planners and Wealth Mangers that EIS and SEIS investments are legitimate tax planning tools which have the full support of the UK government. There is also an increasing understanding that EIS and SEIS contribute hugely, in fact are vital, to the growth of the SME sector in the UK. Reflecting this, many investors are pleased to be able to support

some of the most vibrant early stage companies with exciting new products and technologies. In 2013/14, the latest years for which statistics are available, nearly £1.5 billion was raised for 2,710 companies under EIS and £164 million was raised for 2,000 companies under SEIS. Thanks to the advent of wellregulated and well organised crowd funding platforms, we are seeing a growth in investment from sectors of the community that traditionally have not invested in this space, in particular from younger people, more women and people from ethnic minorities. EIS and SEIS investments into early stage companies have been responsible for a huge growth in jobs and the EIS industry believes that the growth

of these companies, which go on to pay payroll taxes, VAT and eventually corporation tax, contribute far more back to the exchequer than is initially given out in tax reliefs. Furthermore, the UK EIS and SEIS schemes are recognised in Europe as the gold standard for this type of government support for the SME sector and we are seeing interest from other European countries who want to study our model. As the EIS industry matures, it is becoming more and more professional. We have seen the emergence of many first class EIS and SEIS fund managers, which invest at all stages of the development process of SME companies. This allows investors and their advisors to decide what sort of investment and stage of company they would like to focus on. It is good to see so many of these fund managers featured in this year book. As part of its drive to de-mystify EIS and SEIS, the EISA has launched an online Diploma for IFAs and Wealth Managers. The course gives an overview of the tax benefits and the regulatory and funds frameworks. EISA also has an active Financial Planning Committee. For more information go to www.eisa.org,uk.

www.eismagazine.com · Yearbook 2015/16

Welcome

EIS Diploma By Mary Rodgers, EISA Membership Manager

I’ve got this problem that’s been bothering me for weeks, so bear with me. I’m trying to find out what the opposite of the phrase ‘Perfect Storm’ might be? Perfect Calm? No, I don’t think so. Perfect Convergence? Sounds too scientific, somehow. Perfect Circumstance? No, too vague. And the dictionary’s no help. I suppose I’ll have to keep on looking. Whatever it is, though, that’s what we’ve got right now. It’s a convergence of totally disparate factors that range from last year’s reduction of the lifetime pension contributions limit and the general search for better risk rewards, right through to a desperate shortage of bank lending for small and early-stage companies – and, finally, on to the popular-culture focus on early-stage investment through Dragons’ Den, crowdfunding and all the rest of it. All of it gift-wrapped in a government commitment to making alternative investments as tax-friendly and attractive as possible. (Thus neatly sidestepping the awkward issues about the banks’ reluctance to lend, but that’s another story.) Was there ever such a meeting of needs? A Record Year Is it any surprise that the 2014/15 tax year that’s now ending has seen EIS investment topping £1.5 billion for the first time, or that many VCT funds look set to close well ahead of April because of an extraordinary level of demand? Should we be impressed that well over 1,100 brand new companies have now obtained seed capital through the SEIS system, and that the flow of new applications is rising by as much as 25% a year? Make no mistake, early stage is smart right now. And the range of tax-effective options is growing all the time – from 2012’s Seed EIS regime to last year’s Social Investment Tax Relief (SITR), with more expected in due course. Specialist tax-efficient vehicles like Business Property Relief (BPR) schemes are

rapidly gaining popularity. There are funds for pubs and restaurants, stage entertainment, wine and health services. Nobody ever said early-stage had to be just about technology. An Information Hub But, advisers are still feeling uncertain about these schemes. How do the tax breaks work, they ask, and are they safe from future government meddling? What sort of clients should sensibly be looking at them, and what are the time horizons? How far do an adviser’s responsibilities extend? And are there any EIS-type investments that can mitigate client risk or offer greater flexibility? These are the kinds of issues we’ll be focusing on, here at EIS Magazine. No question is too simple or too complex. Just ask us. Take a look at our Open Offers section, which is already proving wildly popular as a resource for advisers. Many thanks for reading EIS Magazine, and we hope you enjoy it. EIS With Best Wishes

Michael Wilson, Editor

Given that we are seeing increasing levels of interest and investment into EIS qualifying companies and funds, it is vital that financial advisers and wealth managers are fully aware of how the Enterprise Investment Scheme operates, including the ways to invest in EIS companies and funds and which investors these investments are appropriate for. As such, Tolley® Exam Training, in conjunction with the Enterprise Investment Scheme Association (EISA) have launched the Enterprise Investment Scheme Diploma, a comprehensive, self-study diploma covering all aspects of EIS, including the tax implications, regulatory aspects and the wider funds and schemes landscape. It demonstrates effective ways to utilise investments efficiently to maximise the benefits in an easy to understand manner.

Anyone studying for the EIS Diploma with Tolley® Exam Training will receive:

• A comprehensive study manual with useful summaries to aid understanding and practice examples, many of which are in the multiple choice format that will be seen in the final Diploma exam • Access to the Tolley® Online Academy, also available as an app, where you can access all study material either online or offline, and ask queries on the Student Forums

• Full support from the experienced tutor team

• Access to the Tolley® Online Exam Centre for all the Diploma and mock exams. The mock is representative of the final exam testing environment providing ample familiarity and practice to aid a first time pass • A Diploma certificate on passing, accredited by the EISA • 15 hours of CPD

The final Diploma exam is a 60 minute online test and covers the full syllabus. There is also a full syllabus mock in preparation for the final Diploma exam. Both

are multiple choice exams available from the Tolley® Online Exam Centre so have complete flexibility to be sat at any time. For more information on studying for the EIS Diploma please visit tolley.co.uk/eisdiploma, email examtraining@lexisnexis.co.uk or call 020 3364 4500

BE FIRST OVER THE LINE

www.eismagazine.com · Yearbook 2015/16

62% of EIS funds raised in the 2013/14 tax year went into renewable energy projects

Renewable Energy Remains Priority By Josh Knight, partner at Mariana Capital

EIS Magazine · Yearbook 2015/16

Budget changes in the last twelve months have shaken up the EIS industry following a relatively stable period. The EIS market is growing rapidly with over £1 billion raised during the last tax year, with the most popular strategy being capital preservation: one designed for more risk-averse EIS investors. To achieve a capital preservation mandate, renewable energy has been the most widely used trade; 62% of EIS funds raised in the 2013/14 tax year went into renewable energy projects. The government had long offered favourable subsidies for the production of renewable energy, which provided EIS companies with strong visibility over future revenues and helped to comply with a more cautious trading strategy. However, following Budget changes, any company benefiting from these subsidies will no longer qualify for investment under the EIS rules.

Why was renewable energy so popular? • Known cost base The installation and operational costs are fairly well known from the outset • Proven technology Renewable energy projects often involve well-established technology

• Predictable revenue streams The government subsidies allowed the EIS company to earn a long-term, RPIlinked, predictable revenue stream, improving:

A) Valuations: Most providers valued these EIS companies on a discounted cash flow basis. The fact that there was strong visibility over future returns contributed to stable valuations. B) Exit: Investors can exit their EIS investment after three years. To provide liquidity, the renewable energy assets have to be sold to a third party. Banks, pension funds and renewable energy companies, for example, were attracted to these assets because of the long-term predictable revenue streams that they generate.

What’s next? Change is nothing new within the EIS market, but given the reliance many providers had on renewable energy investments benefiting from government subsidies, most are now forced to look for new trades to satisfy a capital preservation strategy. The government has not attacked renewables. In fact, renewable energy still remains a priority: by 2030 the EU must produce 27% of all its energy via renewable means, which is likely to increase the UK’s target. While companies benefiting from government subsidies have ceased to qualify, renewables and energy investments will continue to be viable EIS trades. The Budget changes simply force providers to innovate; to find new ways of achieving these predictable revenue streams without the need for a subsidy. The energy sector will remain popular for conservative EIS strategies, despite Budget changes. The following alternative energy strategies do no depend on government subsidies:

www.eismagazine.com · Yearbook 2015/16

What to consider when reviewing an EIS trading strategy The key factors to consider when choosing a capital preservation focused EIS include: • Is the trade likely to generate a long-term, stable and predictable revenue stream? • Does the trade involved have a known cost base? • Is the technology involved proven? • Will the assets be attractive to a third party buyer in three to four years’ time? • Has the provider received advanced assurances from HM Revenue & Customs that the trade qualifies under current legislation?

EIS Magazine · Yearbook 2015/16

Client scenarios where EIS planning could be suitable There are a number of scenarios where EIS planning could be beneficial to a client’s financial plan. As a reminder, the key tax benefits are: • 30% income tax relief • Capital gains tax (CGT) deferral • Inheritance tax exemption after two years • Loss Relief

S S S S

As the strain on the National Grid increases, so does the need for reserve power plants. These are small-scale power plants that can generate electricity, by traditional means, at short-notice. Since the energy produced is not from a renewable source, the government subsidies have never applied. Instead, the energy is sold to the National Grid and the EIS company earns a number of revenue streams as a result. That said, some of the contracts in place, most notably the STOR (Short Term Operating Reserve) are by definition short term, with these contracts only being up to two years long.

a cen ri

Encashment of an investment bond Unlike selling a property, the encashment of an investment bond will create an income tax liability on the growth in the value of the bond. An investor can surrender their investment bond, and wipe out their additional income tax liability, by investing the relevant amount into an EIS and utilising the 30% income tax relief available. Having held their investment for three years, pending liquidity, the investor can exit their EIS investment with no tax charge. Profit extraction for business owners: Many business owners are frustrated with paying tax on profits made by their company twice; once as a corporation and again when they decide to pay themselves a dividend. The 30% income tax relief available through EIS investments allows the business owner to pay themselves a dividend, invest in an EIS, and wipe out the additional income tax liability due on the dividend. As above, an investor can sell their EIS shares after three years, pending liquidity, with no tax charge.

Recycling EIS investments The 30% income tax relief available through EIS investments could be put towards covering a cost the client is faced with, for example school fees. Once held for three years, subject to liquidity, the client could encash their EIS investment and use the proceeds to purchase new EIS shares. Assuming the original investment has preserved its value, and the EIS legislation remains unchanged, the client can attain the same level of tax relief on the subsequent investment without any additional contributions. The client is simply recycling old monies, but continuing to benefit from the tax relief that each investment makes them eligible for. EIS

Image: www.flickr.com/photos/nait/6915219490

Renewable energy projects overseas, for example solar sites, can produce a stable revenue stream without the need for government subsidies. There are no UK government subsidies in place meaning this is likely to qualify under the EIS rules. In light of the lack of a subsidy, the assets rely on energy prices within the countries in which they are placed. For clients comfortable with geopolitical and exchange rate risk, this could prove a suitable strategy.

a cen ri

Energy infrastructure

One way of achieving a stable revenue stream is to sell the renewable energy produced to a third party via a power purchase agreement (PPA). PPAs can often be 30 years or more and, as long as the counterparty purchasing the energy is of high credit quality, this can provide strong visibility over future revenues. Essentially the government subsidy is replaced with a long-term contract with a large corporate. One example of this in practice could be the installation of hydro-electric water turbines within the UK’s water pipe network. The energy produced could be sold to the host utility company, via a PPA, providing the EIS companies with a long-term, inflation linked, predictable revenue stream.

International renewable projects

Power purchase agreements

a cen ri

The government has not attacked renewables. In fact, renewable energy still remains a priority

a cen ri

Sale of a second property By investing the chargeable gain from the sale of an asset, for example a holiday home or a buy-to-let property, the collection of the CGT bill is deferred for as long as the investor holds their EIS shares. The liability is eliminated if the investment is held at death. EIS companies also qualify for Business Property Relief (BPR), meaning if the investment is held for two years and at the time of death, the value of the investment will not attract an inheritance tax charge.

www.eismagazine.com · Yearbook 2015/16

Evaluating Risk And Maximizing Opportunity Using EIS

EIS was designed to reward those willing to support innovation and entrepreneurship by offering tax incentives to investors who purchase equity in higher-risk trading companies. In return, the scheme creates access to capital for some of the most exciting businesses in the UK. At the heart of this lie EIS funds that feed investors’ capital into highgrowth, early-stage companies with the potential to expand rapidly and deliver high returns. Lower risk, lower return EIS funds do exist but they focus on capital preservation rather than maximising the investment opportunity that the scheme can deliver. There are also far fewer of these funds, as HM Treasury seeks to limit the availability of EIS to riskbased investments.

Expert deal sifting Managing and evaluating the risk profile of investments is the top of any manager’s agenda. Experienced managers have detailed processes in place for ensuring that each investment is a balance between significant upside potential and genuine downside protection. The tax breaks assist greatly at both ends but they do not obviate the essential need to evaluate the commercial risks of any investment proposition. This requires structured processes and I would suggest that the first is the stimulation of a high quality deal flow combined with expert deal sifting. It sounds obvious, but the higher the quality of the deals you see the easier it is to put capital to work effectively and responsibly. MMC Ventures builds relationships with entrepreneurs and founders at an early stage, and often these are cultivated for several years before making an investment. These relationships are built at the many pitch and social events happening throughout London’s various tech hubs. Add to this a strong external network of advisers and investors

recommending companies, and the overall quality of the deal-flow is high. This network can take a number of forms and is essential if an EIS manager wants to source, screen and shape prospective deals. Different managers have different tools for building and maintaining these networks. In addition to the managed EIS funds MMC has the benefit of a small syndicate of highly experienced business angels who choose their deals after seeing the extensive financial, technical and commercial due diligence conducted by the investment team. These individuals act as a further screening and, as they are often committing larger one-off sums, they provide a gauge of whether the riskreward ratio of the deal is appropriate. Continuing risk mitigation The assessment and management of a company does not end with due diligence and subsequent investment. Continuing risk mitigation is best delivered by fostering a positive working relationship with the company and management, including participating in the recruiting of other senior executives and board members.

By Bruce Macfarlane, managing partner at MMC Ventures

EIS Magazine · Yearbook 2015/16

www.eismagazine.com · Yearbook 2015/16

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

MMC Ventures builds relationships with entrepreneurs and founders at an early stage, and often these are cultivated for several years before making an investment.

In almost all cases managers require board seats and investor controls negotiated through the shareholders agreement. This allows us to monitor and influence the commercial decisions the company makes. Portfolio company management is a key and time consuming responsibility. Co-investment with other investors who bring specialist knowledge or industry access can be a big help. EIS managers will often invest as part of a round that includes other institutional investors or experienced business angels. In this way the risk, reward and support of the company is shared. MMC almost always invests alongside other well-respected European and international venture funds, and this as a vital element when evaluating the risk of an investment: a risk shared is a risk reduced.

Getting the best terms It is important also that managers align the interests of the team with those of their investors. In this way investors who are relying on their managers to evaluate the risk of their investments are assured that they are making the right calls, on the best terms. At MMC, the team personally invest in each deal (over £10m to date) and are incentivised through the carry structure. For EIS managers who commit to each deal in this way, it becomes important to view a deal on its commercial merits, not simply on its tax advantages. This is at the forefront of MMC’s thinking when assessing an investment: the deal must present a genuine commercial opportunity with the possibility of delivering a large exit multiple.

The upside tax benefits of EIS are well-known, but are still worth briefly summarising: • 30% income tax relief on investment; • Tax-free capital gains (where income tax relief has been given and not withdrawn, and shares have been held for three years); • Capital gains tax deferral potential; • Inheritance tax exemption.

FULL PAGE ADVERT

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.

www.eismagazine.com · Yearbook 2015/16

downside tax advantages PROVIDE significant loss mitigation The 45% loss relief (assuming an investor is paying top band tax)

the initial 30% tax credit

every £1 invested The net amount risked is

38.5p

£1

Growing Number of Advisers Recommending EIS To Clients By John Thorpe, business line manager for EIS products at Octopus

Tax breaks on top So far, I’ve deliberately ignored the tax advantages that EIS offers, as I wanted to highlight that, for genuine risk-equity EIS managers, there are a number of other key factors at play when the risk profile of an investment is evaluated. However, there can be little doubt that the tax benefits of EIS, both on the up and downside, offer a remarkably efficient investment framework. If appropriately managed, an EIS investor can enjoy the benefits and excitement of backing highgrowth, early-stage companies, combined with both protective and returns-enhancing tax subsidies.

EIS Magazine · Yearbook 2015/16

Help on the downside However, it is the downside tax advantages, sometimes overlooked, that truly complement risk-equity investing - by providing significant loss mitigation. The 45% loss relief (assuming an investor is paying top band tax), when added to the initial 30% tax credit, means that for every £1 invested the net amount risked is 38.5p. This means that even if several companies in a portfolio fail the portfolio in its entirety can still make a positive return. All venture capital models expect some companies to fail, in fact we would not be doing our jobs properly if

they did not. This is balanced however, as the opportunities of EIS on the upside are tied to the conventional venture capital model too: if just one or two companies in a portfolio do well, then the returns begin to climb. Loss-relief adds a further dimension offering crucial security to investors willing to back growth businesses. This highlights the opportunity available to EIS investors: through generous tax advantages they are given access to a potentially high-reward asset class usually reserved for institutions and the very wealthy, delivered in a framework which can offer genuine risk mitigation. EIS

www.eismagazine.com · Yearbook 2015/16

A growing number of financial advisers are recommending EIS to their clients as potential investment vehicles. A record £1.4 billion was invested into EIS in 2014/2015 and it’s easy to see why. The schemes offer generous tax benefits in return for the higher level of risk involved. Additionally, recent changes to legislation, such as greater restrictions on the annual and lifetime amounts one can save into a pension, have encouraged more people to consider alternative ways to complement existing pension arrangements. But, in my view, EIS has more to offer as a financial tool than many people are aware of. In fact, one might think of EIS as the tax-planning equivalent of a Swiss Army knife: multi-purpose, incredibly adaptable and – when used appropriately with the right clients – capable of offering a potential solution to a variety of practical problems.

Capital gains deferral While EIS provides opportunities to invest, tax-efficiently, in fast-growing, early stage companies, it is often used for other tax planning purposes such as deferring capital gains. While it may, to some, feel like deferring capital gains is merely putting off a tax problem, using an EIS in this way can open up several different tax-planning options for investors. An EIS is an investment product that allows investors to defer paying tax on a capital gain for the lifetime of the investment, by investing the gain in an EIS. This is particularly relevant for clients who have been finding it difficult to release equity from an asset that is ‘pregnant’ with gains, eg. a second property, perhaps as part of their inheritance tax (IHT) planning. Below are two examples of situations in which investors might consider investing in an EIS. Please note that these assume no loss or gain on the investment and it’s important to consider the impact of fees and charges when any investment is made.

THE EIS RULE

3 years

The minimum holding period set by HMRC for EIS-qualifying investments Once you have the opportunity you can sell up to £11,100 of your EIS INVESMTENT shares (i.e. YOUR annual CGT allowance) in years four, five and six, You’ll have realised all of your original investment after year six, without incurring any CGT liability on the deferred gain because you have used four years’ annual allowances.

EIS Magazine · Yearbook 2015/16

Selling a second home Tim purchased a buy-to-let flat for £100,000 some 15 years ago. Since then, he’s managed to pay off the mortgage. He’d like to sell the property, now valued at £144,400, but knows that as a higher rate taxpayer, the sale would trigger a capital gains tax (CGT) bill of 28% on the £44,400 profit. Tim is comfortable with taking risks with his money, but wants to know how to unlock his capital. Here’s where an EIS can help. Using EIS, Tim can keep the first £11,100 of his gain, which will be covered by this year’s annual CGT allowance. The remaining £33,300 can be invested in an EIS. Here the capital gain will be deferred for as long as he continues to hold the investment. Tim’s other earnings mean he can benefit from upfront income tax relief of up to 30% of the value of his EIS investment (which works out as £9,990). A quick reminder of EIS rules The minimum holding period set by HMRC for EIS-qualifying investments is three years. And because the money is invested in unquoted companies, which can take longer to sell, it’s sensible to assume the investment will be held for around four years. Once Tim has the opportunity, he can choose to sell all – or part – of his EIS investment. If he chooses to sell up to £11,100 of his shares (i.e. his annual CGT allowance) in years four, five and six, he’ll have realised all of his original investment after year six, without incurring any CGT liability on the deferred gain because he has used four years’ annual allowances.

A number of clients are likely to be disappointed with the new legislation announced in the Summer Budget. The additional main residence nil-rateband will only apply to homes left to children or grandchildren, will only be phased in starting from April 2017, and estates could still have an IHT liability on other assets. Inheritance tax exemption Andrew and Helen own a seaside cottage – held in Andrew’s name – as well as their own home. They’ve spent many happy holidays in the cottage, but the drive to the coast is getting increasingly arduous as they get older. They know that the value of the cottage, combined with the value of their home and substantial savings, puts them well over the combined inheritance tax nil-rate-band. It’s likely that in order to pay the 40% inheritance tax bill due on the whole of their estate, Andrew and Helen’s children would be forced to sell the cottage. After careful thought they have decided they would be better off selling the cottage now.

Without any other tax planning in place, selling the cottage would still leave Andrew and Helen with a large tax bill. Selling the cottage will crystallise a capital gain of £100,000, which would result in a CGT liability of £28,000. But here’s where an EIS investment can again be considered as a sophisticated tax-planning tool. If Andrew invests the £100,000 capital gain from the sale of the cottage in an EIS, his CGT liability can be deferred and, provided he still holds the investment at the time of his death, eliminated. In addition, the investment is expected to become IHT-free after two years (saving his estate a further £40,000) and he can expect to receive £30,000 income tax relief to offset against any pension or other income. In both of the above case studies, the investors will need to bear in mind, that the value of their investment may go down as well as up and they may not get back what they initially invested. EIS are high risk investments and there is no guarantee that the companies they invest in will

SEASIDE COTTAGE + HOME VALUE & SAVINGS OVER COMBINED INHERITANCE TAX BILL likely that in order to pay the 40% TAX bill due, THE children would be forced to sell the cottage.

Selling the cottage NOW will crystallise a capital gain of £100,000, which would result in a CGT liability of £28,000. AND here’s where an EIS investment can again be considered as a sophisticated taxplanning tool.

Another benefit It’s also worth noting that Tim could elect to transfer half of his EIS shares to his wife, Susan. They could each sell shares annually to their combined annual CGT allowance of £22,200 without paying any CGT. So, together, Tim and Susan would be able to mitigate any tax on the gains even sooner, within two years of the minimum holding period for EIS investment. But what about clients who are also starting to worry about inheritance tax, as well as capital gains tax?

www.eismagazine.com · Yearbook 2015/16

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.

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

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

We focus on capital preservation throughout our investment solutions

continue to qualify for tax reliefs. Tax treatment will depend on individual circumstances and may be subject to change

Opportunity to remain invested If you’re considering an EIS for a client in this particular situation, it’s well worth checking with the EIS provider whether they offer investors the opportunity to remain in the EIS product for their entire lifetime, or whether they will ask investors to ‘exit’ the EIS and reinvest in another EIS product after a certain period. This could potentially cause problems with a tax liability becoming due when you and your client thought it had been managed appropriately. In our view, the ability to remain invested in the same EIS until death gives investors peace of mind that, once they have made their investment, they won’t have to risk being ‘moved out’ at a later date. 20

EIS Magazine · Yearbook 2015/16

Recommending EIS to clients As these hypothetical tax-planning scenarios demonstrate, an EIS can be used to solve more complex tax issues experienced by clients. But it’s also worth noting that both offer a way for the adviser to ‘bring in’ assets (the buy-to-let property and the holiday cottage) that were not previously under the remit of the adviser and were effectively outside of the adviser/client relationship. In this way, recommending an EIS investment is a way to deepen the relationship between the adviser and the client, and possibly also their heirs. Advisers, of course, need to make sure their clients understand that these product offers compelling tax benefits to compensate for their high risk nature. EIS invest in smaller companies which have a higher failure rate than more established businesses, so they can be more volatile.

EIS are high risk investments and there is no guarantee that the companies they invest in will continue to qualify for tax reliefs

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 It’s true to say that the importance of different incentives available through an EIS investment will vary from client to client, and according to age. But tax incentives are not the only consideration. Investors often tell us that, in spite of the high risk nature of EIS investments, the corresponding tax advantages are a great way to encourage their initial investment. However they also want to know that there is a compelling investment case for the sectors and companies they will be investing in through their EIS. EIS

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

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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.

A survey by adviser search engine Unbiased.co.uk found that inheritance tax (IHT) was the second most resented tax in the UK, second only to council tax. However, at the same time, more of us than ever are becoming liable for IHT and stand to suffer a 40% charge on our wealth at death.

Inheritance Tax – The Second Most Resented Tax In The UK By Hugh Rogers, business development director at Puma Investments

EIS Magazine · Yearbook 2015/16

Each person has a nil-rate-band of £325,000 and IHT of 40% is paid on everything above this (36% if at least 10% is left to charity). For married couples, HM Revenue and Customs (HMRC) only charges IHT after the second partner dies, giving a combined nil-rate-band of £650,000. When someone dies, the government assesses how much their estate is worth. The value of an estate includes; cash, businesses, personal possessions, gifts, trusts and property. However, there are changes which have been announced recently which will increase this nil rate band to £500,000 for individuals, and £1 million for married couples and civil partners. The government is adding a ‘family home allowance’ which will eventually be worth £175,000 per person on top of the £325,000 nil-rateband. This will start off at £100,000 in 2017/18, and will then increase in £25,000 increments over the following three years. So from 2020 onwards, individuals can pass on up to £500,000 (which can include the value of a family home) to beneficiaries without incurring IHT. For married couples and civil partnerships, the total is £1 million. Consider a married couple with a family home valued at £750,000, and assets worth £750,000, so the estate totals £1.5 million. At present the nil-rate-band for the married couple is £650,000, so the taxable estate would be £850,000. A 40% charge on this means the beneficiaries paying at present £340,000 in IHT on this estate. But if the same example is applied in 2020, then the nil-rate-band for the

married couple would be £1 million, and the resultant IHT bill would drop to £200,000; a saving of £140,000. But IHT advice would still be required from experienced financial advisers if the remaining £200,000 IHT bill is to be mitigated. Investors and advisers should also be warned the wealthiest estates will not qualify for this additional allowance. It will taper away for estates which are valued at over £2 million, and above £2.35 million the additional allowance no longer qualifies. Furthermore, the additional allowance of £175,000 only applies to passing on family homes to children (including foster and step children) after death. If there is no home, the additional allowance is not available, and nor is it available if an estate is being passed onto beneficiaries who are not children i.e. passing on an estate to nephews and nieces would not qualify.

This means that an increasing number of people are being pushed above the IHT threshold for the first time, many of whom will understandably be unfamiliar with the different options for estate planning and IHT mitigation. In fact, more than £3.5 billion was raised from IHT receipts for the 2013/14 tax year, according to the Office for Budget Responsibility, up from £3.1 billion the previous year. This is a staggeringly high amount, especially considering that individuals can legitimately mitigate IHT liabilities by planning ahead.

From 2020 onwards, individuals can pass on up to £500,000 (which can include the value of a family home) to beneficiaries without incurring IHT

IHT is a growing problem But for now, the nil-rate-band for IHT was frozen in 2010 at £325,000 and will remain in place until 2018/19. If the threshold had alternatively been linked to inflation, it would stand at over £389,000 today. In the year to November 2014 the average property price in the UK rose by 8.5% (source: Nationwide), with the average value for a home in London is now just under £430,000. Experts anticipate that this growth will continue, albeit at a slightly slower rate. www.eismagazine.com · Yearbook 2015/16

3 Traditional methods of mitigating IHT There are many methods available to help reduce IHT liabilities. Two of the most common forms are:

Gifts Gifting is essentially giving your money or assets away to an individual of your choice. Each parent is entitled to gift up to £3,000 a year per child which is entirely exempt from IHT. However, as with many of the options used to mitigate IHT, gifting can prove both restrictive and time consuming. The gift itself must be absolute. Time can also prove an issue, as gifts over the value of £3,000 require the gifting person to survive for seven years after making the gift, to render it exempt from IHT. This timeframe may not be attractive, particularly for elderly clients. Trusts Trusts are another traditional method of mitigating IHT. However, over the years trusts have also become

ways to invest in BPR qualifying companies There are a number of different routes that can be taken to access BPR qualifying companies. Each offers its own unique benefits but, as with any investment, there are a number of things to watch out for and investors should be aware of the inherent risks involved.

more restrictive. Some would argue that trusts are also more expensive with clients having to seek legal guidance, in addition to financial advice, in order to create and maintain a trust. Similar to gifts, it will take seven years for the trust to become fully exempt from IHT and placing assets in trust may also mean a loss of control over assets. BPR qualifying companies provides an alternative to gifts and trusts Business Property Relief (BPR) is available to investors in companies where the activities of the company are not wholly or mainly dealing in securities, stocks or shares, land or buildings or making or holding investments. In essence, BPR therefore is available in respect of shares in trading businesses.

Key Benefits

Key risks

1. Faster IHT exemption: unlike gifts and trusts, which generally take seven years before they’re fully exempt from IHT, BPR-qualifying investments are IHT exempt after just two years (provided the investments are held at the time of death).

1. Investor capital will be at risk and clients may get back less than originally invested

3. Income options: Many BPR solutions allow the investor to take an income from their investment.

Before making a decision to invest in a BPR solution investors should speak to a financial adviser and refer to the relevant product literature for full details of the risks to make sure they’re comfortable with them.

2. Greater access and control: unlike with a gift, the investor retains control over the investment, and can get their money back, if they need to. However, money taken out of the investment may not be shielded from IHT. 4. Simplicity: BPR investments are relatively simple and straightforward to invest into. Generally there are no complex legal structures, and there may not be a requirement for client underwriting or medical surveys. 24

Although first designed to benefit unquoted companies, BPR has been extended over the years to cover firms quoted on the Alternative Investment Market (AIM) and businesses which qualify for the Enterprise Investment Scheme (EIS). To qualify for BPR, the company must be considered ‘wholly or mainly’ a trading business. This is not always easy to identify as it covers a broad area including the company’s main activities, assets, and sources of income. Each business must therefore be assessed on a case by case basis. Other assets that may be owned by a business but are not used as part of its trade, will also have to be reviewed.

EIS Magazine · Yearbook 2015/16

2. Tax rules relate to the individual and could change

3. Tax reliefs depend on investee companies maintaining their qualifying status

4. Investments in AIM-listed and unquoted companies are likely to have higher volatility and liquidity risk than shares quoted on the London Stock Exchange Official List.

Unquoted BPR qualifying companies Over the last few years a market has developed offering investors the opportunity to invest in unquoted BPR-qualifying companies. Some investment management companies offer discretionary investment services to identify such companies. The types of trades these companies engage in vary, although in our experience a common theme is asset-backed lending and asset leasing. These trades benefit from downside protection as the companies will often take security over assets when advancing loans to customers.

AIM-listed businesses To date over £87.8 billion has been raised through IPOs and capital raising on AIM, and more than 3,524 companies have been admitted to the market. As listed securities, AIM stocks can offer a higher degree of liquidity than private companies. Many AIM-listed companies have long-histories, established business models and strong management teams. These are often companies with significant family shareholdings that have chosen to move from the main market to AIM in part to benefit from BPR. However, investors in AIM-listed securities are taking equity risk. BPR qualifying AIM-listed equities can be targeted through direct investment, although it is important to remember that not all AIM stocks will be eligible for BPR (e.g. pure property investment companies) and there is no way to access a definitive list of qualifying companies. Even if you do invest in a company that is currently eligible for BPR, this status could change while an individual is still invested, making it necessary for investors to check-in with the business occasionally to ensure that it is still compliant with the rules. A relatively recent change has also enabled AIM stocks to be held as part of an ISA. When combined with the existing tax relief on income and growth already offered by an ISA wrapper, this effectively means that investors can keep the benefits of an ISA during their lifetime while also mitigating IHT on death. Collective portfolios of AIM stocks are available through many product providers, run by specialist managers who are able to mitigate some of the risk involved with AIM investing by selecting and monitoring stocks from the wide range of AIM-listed companies. Initial investment starts from as little as £15,000 and many providers offer ISA and non-ISA wrappers.

EIS qualifying companies For more sophisticated investors, a qualifying EIS investment may be an attractive option when taking into account their initial tax advantages, which offer 30% income tax relief. This could prove a particularly relevant benefit now that clients can make large withdrawals from their pension pots under flexible drawdown, triggering a substantial income tax bill – something which the 30% income tax relief in an EIS investment would help to cushion. The same two year qualifying period stands for IHT relief to kick-in and EIS investments must be held for a minimum of three years to qualify for income tax relief. Some managers will also specifically target businesses with asset backing that can protect on the downside and ensure the investment is less risky. The scale of the portfolio held by each of your clients, as well as their age, lifestyle and attitude towards risk will determine if and how to use BPR as a way of mitigating IHT. Each of these options has its pros and cons and, provided that the client’s portfolio size allows it, diversifying across two or more of the above strategies may be a sensible route. In the end, these are all still investments and any tax relief, while being a key focus of estate planning, should not be the only motivation. It is crucial to always look at the quality of the company your client will be investing in and focus on track record and overall experience of the fund management team, where it applies. EIS

www.eismagazine.com · Yearbook 2015/16

Image: www.flickr.com/photos/karen_roe/4457531355

Key To Success Lies In Network Of Investors

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INTERVIEW

Matt Taylor, founder of Rockpool

The key to Rockpool Investments’ success lies in its network of investors, who are typically successful entrepreneurs in their own right who know what they want from an investment. Matt Taylor, founder of Rockpool, said the company set out to be a ‘flexible source of investment opportunities in the private company sphere’ and stressed that its unique selling point is its network. ‘We started arranging direct investments in companies for highnet-worth clients,’ he said. ‘We have 1,300 clients and half are very

hands on. Almost all are successful entrepreneurs and retired investment bankers and they are very important in terms of due diligence and sourcing opportunities.’ Some investors also become nonexecutive directors of the firms which Rockpool backs. While EIS and VCTs offer generous tax breaks for investors, Taylor said the investment opportunities are more important. He said Rockpool is a ‘generalist’ company that focuses on ‘asset rich situations and profitable companies’.

www.eismagazine.com · Yearbook 2015/16

‘[Peak power] will be important this year and next year but the band wagon is beginning to roll and we know what happened to solar,’

For Taylor, investments that are asset rich are attractive but he refuses to go as far as saying they offer ‘capital preservation’. ‘We are always asking “what is the risk for investors” and what the fall back is,’ he said. In terms of the investments that have been attractive to Rockpool lately, crematoriums have been popular and the company currently invests in five. Taylor is also interested in peak power, which offers back-up or stand-by power to the National Grid. He said Rockpool moved into the sector last year and now a number of other companies have followed into peak power this year. However, he said that some companies may have left it too late to get involved and that the clampdown on tax breaks for solar energy should serve as a warning. ‘[Peak power] will be important this year and next year but the band wagon is beginning to roll and we know what happened to solar,’ said Taylor. ‘I think the same will happen to peak power.’ Rockpool also has money invested in nursery schools, which is a good

example of the asset rich investment that Taylor favours. The freehold building which houses the nursery represents a store of value which could help investors recover their capital if the business underperforms. The focus on assets chimes with the risk profile of the investors. ‘Risk profile is really important to investors,’ he said. ‘At one end of the scale is high-risk tech start-ups with no assets and high start-up costs, which is very risky. [The companies] we invest in have lots of assets and low operating expenditure.’ Taylor said Rockpool, with 16 members of staff, was ‘small but beautifully formed’ and in the past four years since the company launched it has ‘grown very nicely’ and last year attracted more generalist EIS investment than any other firm. ‘I am excited about investing in private companies and it’s not just EIS. In fact a lot of the deals we do include loans and people are interested in that just as much as EIS, particularly for SIPPs and inheritance tax mitigation’ he said. EIS

Investing In Companies At Earlier Stage

Rockpool also has money invested in nursery schools, which is a good example of the asset rich investment that Taylor favours.

EIS Magazine · Yearbook 2015/16

INTERVIEW

Paul Jenkinson, founder of Jenson Solutions

Jenson Solutions prides itself on investing in companies at an earlier stage than many other managers are willing to do. Now investing out of their third combined SEIS and EIS fund, 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 commercialisation of a proven business model. Paul Jenkinson, founder of Jenson Solutions, said the company looks across the whole of the UK and across sectors in search of exciting growth stories backed by a passionate management team.

‘The big difference [between Jenson Solutions and other companies] is we invest in a company at an earlier stage than other managers are willing to,’ he said. ‘We have an agnostic approach, we therefore do not focus on geography or specific verticals or sectors. We look for early stage investment in highgrowth companies based anywhere in the UK, in any sector but they have to have an exciting growth story and build something that we feel has value.’ Jenkinson’s passion and enthusiasm is truly infectious.

www.eismagazine.com · Yearbook 2015/16

The Fund aims to target exciting new innovative and disruptive technologies to be nurtured alongside existing investment opportunities ‘We roll our sleeves up and help [the companies we invest in] to grow and expand,’ he said. ‘Often they do need more help and we give that help to them; whether it’s help to develop products, sales and marketing, or bringing in others to help, invest and become new customers.’ Jenson Solutions’ investor base is extremely broad consisting of high net worth individuals and captains of industry. ‘Some investors do get involved,’ said Jenkinson. ‘We are always keen for our investors to get involved if they have time. The investors tend to be successful in business, but they are still in business so they are not at the

retired stage or active business angel stage, they are busy working and want to invest in early stage companies but cannot sit through hundreds of business plans and meet companies.’ Jenkinson points to a number of successful businesses that Jenson Solutions has backed, including Twizoo, a start-up app which collates Twitter data for restaurant recommendations. He said ’we quickly recognised the huge potential of the Twizoo concept and quality of its management team’, which has since raised £1.2 million from later stage investors. Jenson also put capital behind Nifty, a plug in drive for Apple Macs that allows individuals to increase the available storage space on their computer, which Jenkinson said was ‘the UK’s most successful Kickstarter campaign’. However, investing so early in startups comes with risks. ‘We think when we invest in those companies that they have great potential but going into an early stage

business is always high risk,’ he said. ‘For us the best way to reduce that risk is to do extensive due diligence, negotiate good terms and support the company and monitor them,’ he said. ‘That reduces the downside but businesses fail every day of the week and the best way to deal with that is invest across a diversified portfolio and the bigger [the portfolio is] the better it is for investors. The tax breaks under SEIS and EIS are unquestionably favourable. With the increasing complexity with changes in the legislation with regards to pensions, we believe the SEIS and EIS product, with its favourable tax treatment, will become an increasingly important part of retirement planning. Jenson is in a strong position to capitalise on its experience in this market, focusing on quality businesses with huge potential upside regardless of the tax breaks on offer.’ EIS

Twizoo App

Looking For FastMoving Companies

‘We look for early stage investment in highgrowth companies based anywhere in the UK, in any sector but they have to have an exciting growth story and build something that we feel has value.’ 30

EIS Magazine · Yearbook 2015/16

INTERVIEW

Bruce Macfarlane, managing partner and Founder. MMC Ventures MMC Ventures isn’t looking for tax breaks, it’s looking for fast-moving companies that are going to grow quickly and provide attractive gains. ‘The EIS tax breaks are the cream on the cake, not the cake’, said Bruce Macfarlane, Managing Partner and Founder. ‘We are investing in an asset class of private, growth companies run by entrepreneurs with very big ambition. It is called venture capital.’ When choosing a company to invest in, MMC is looking for a team with the talent and ability to deliver on a plan that targets an interesting

business sector; where there is the opportunity to disrupt the current market approach to product or service delivery and quickly establish a strong niche position. These businesses will have taken seed or start-up capital and developed their proposition sufficiently to show that the market wants it. ‘We are typically the first institutional investor in. Companies we back will have taken seed capital and have significant business angels on board as well as growing sales and are able to prove the market wants the service or product they are providing.’

www.eismagazine.com · Yearbook 2015/16

We are investing in an asset class of private, growth companies run by entrepreneurs with very big ambitions

The MMC strategy is then to follow their initial investment if the company performs. ‘We invest between £1.5 million and £3 million in the first round and we will do that again in one or more further fund raising rounds to a total of around £5 million to £7 million per company,’ he says. MMC Ventures aims to ‘build the company to be profitable or to a stage where other large investors come on board’. The firm is a very hands-on investor and gets involved in the new business directly. ‘Good entrepreneurs want more than money,’ says Macfarlane.

‘The businesses we back are looking for business-savvy and strategic input to the growth decisions they make. We look to provide experience, draw on our network of connections for expertise and introductions, and generally assist the entrepreneurs in achieving their goals.’ The employees at MMC Ventures do not just invest their time, but also their own money. ‘We invest personally in the deals we do. Around £10 million has come from the partners and team’. Recent successes for the firm include recipe kit company Gousto, which delivers fresh ingredients for gourmet meals to your door with cooking instructions included. Many of the companies that MMC Ventures invests in are now attracting interest from major US venture capital firms and corporate investors. For example, the venture arm of consumer goods giant, Unilever invested £5 million last year into Gousto. More recently, MMC Ventures has invested in drone technology business, Sky-Futures, which has pioneered drone inspections of offshore oil and

gas rigs, and Bloom & Wild, an online gifting business with special packaging that allows flowers to be posted through letterboxes. What makes MMC Ventures investments different, according to Macfarlane, is that ‘they are innovative and exciting businesses. These are the kinds of companies that really get people’s attention and get talked about at dinner parties’ While MMC Ventures invests in companies that are early-stage and therefore arguably pose more risk, Macfarlane claims that his firm’s approach to risk is carefully calibrated. MMC is known for the quality of its due diligence. In addition, as one of the top 10 most active investors in the UK, their investors can expect a good level of diversification. Finally, as Macfarlane points out, the Government introduced the EIS scheme in order to attract investors to this vital asset class and so provide capital to companies that create employment and growth to the economy, and did so by designing EIS to mitigate the investment risks through the tax benefits. EIS

The employees at MMC Ventures do not just invest their time, but also their own money. ‘We invest personally in the deals we do. Around £10 million has come from the partners and team’.

EIS Magazine · Yearbook 2015/16

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Octopus Investments: An investment company with a difference

£150 million a year into Octopus EIS, which targets capital preservation,’ said Latham. ‘We had been doing high risk/ return EIS before but found there was growing interest in EIS from people looking for an investment strategy that sought to manage the investment risk. That was a big change for us.’ He said that while plenty of investors are ‘very comfortable’ taking a large amount of risk, the company could now cater for those whose risk appetite is lower, though he points out that, by their nature, all EIS products remain higher risk than more traditional forms of investment. ‘For some people, they will invest in 10 companies and accept that two or three of those may fail, but they don’t mind because they expect the other companies may do well and make up for it,’ said Latham. ‘But for other people, two or three failures is too much to deal with and, particularly when people are investing towards the end of their life, the focus on capital preservation is more attractive.’ Prior to the change in legislation that prevents further EIS investments in subsidised renewable energy plants – previously a key sector for Octopus

EIS – Latham said the company had switched to investing in reserve power plants and non-subsidised renewable energy projects. Reserve power comes from generation plants built at various points on the National Grid, at a typical cost of between £5 million and £10 million. The plants sit in reserve until there is a surge in power usage, at which point they are utilised for as long as they are needed, maybe an hour or two. ‘These sit under the “capital preservation” banner because there are contracts in place with the National Grid and energy buyers [about how much they will pay] that makes revenues more predictable and, given our experience in the sector, we know the set up costs,’ said Latham. He added that Octopus Investments is also looking to the healthcare sector as ‘we think there is a massive demand build up, due to an ageing UK population’. ‘We have £1.2 billion invested in healthcare, from GP surgeries to hospitals and care homes,’ he said. On the growth side of the business, Octopus Investments has had a number of successes with companies that have become household names, including travel website Secret Escapes

Property search engine Zoopla, is the first £1 billion company to be funded by EIS and healthy snack box company Graze. The largest of these is property search engine Zoopla, which is the first £1 billion company to be funded by EIS. Important information For professional advisers only. Not to be relied upon by retail investors. The value of an EIS investment, and any income from it, could fall or rise. You may not get back the full amount you invest. Tax treatment depends on individual circumstances and may change in the future. The tax reliefs that can be claimed will depend on the companies we invest in maintaining their EIS-qualifying status. The shares of the smaller companies we invest in are likely to fall and rise in value more than shares listed on the main market of the London Stock Exchange. They may also be harder to sell. EIS

Personal opinions may change and should not be seen as advice or a recommendation. Octopus does not offer investment or tax advice. Issued by Octopus Investments Limited, which is authorised and regulated by the Financial Conduct Authority. Registered office: 33 Holborn, London EC1N 2HT Registered in England and Wales No. 3942880.

INTERVIEW

Paul Latham, managing director of Octopus Investments

EIS Magazine · Yearbook 2015/16

As the architect of an Enterprise Investment Scheme (EIS) designed to target capital preservation, Octopus Investments led the way in responding to investor demand for more conservatively managed products. These attempt to mitigate some of the investment risks associated with high risk EIS vehicles by buying shares in companies with more predictable revenues and costs, e.g. in the energy sector. Paul Latham, managing director of Octopus Investments, said the company runs both Octopus Eureka

EIS, which looks for early stage companies with growth potential, and Octopus EIS which aims to preserve customers’ money and deliver a small return, while enabling clients to benefit from the associated tax reliefs. Now, across the market, four times as much investor money flows into EIS products that target capital preservation than into those investments with a higher return objective. ‘We take around £20 million a year into Octopus Eureka EIS, which targets growth, and between £100 million and

Octopus Investments is also looking to the healthcare sector as ‘we think there is a massive demand build up, due to an ageing UK population’.

www.eismagazine.com · Yearbook 2015/16

We Should AIM Higher

INTERVIEW

Says Douglas Lawson of Amati

When it comes to the AIM market, many advisers and investors take a wide berth, fearing that the Exchange’s junior market won’t offer the necessary returns, but this is a missed opportunity argues Douglas Lawson, a director at Amati Global Investors. Amati is a specialist investment management business which focusses on small and mid-sized companies in the UK. Its TB Amati UK Smaller Companies Fund is an open-ended fund which invests in companies quoted on the Alternative Investment Market (“AIM”) as well as fully listed companies including constituents of the Small Cap and Mid 250 indices.

Amati also has two Venture Capital Trusts - Amati VCT and Amati VCT 2 - which are primarily focussed on companies quoted on AIM. The firm works together with financial advisers to offer the Amati AIM IHT Portfolio Service on Transact, the online investment portfolio wrap service. Amati acts as the discretionary fund manager for clients of Advisers on the transact platform. Lawson was keen to point the firm’s detailed approach to the junior market and started by explaining their approach: “The way we look at this is quite different from how we look at our VC trusts and our small cap fund because people are putting money into

www.eismagazine.com · Yearbook 2015/16

Dividing the stocks into four categories helps the team organise in terms of their risk profile and opportunities. 38

EIS Magazine · Yearbook 2015/16

The Third categorical stocks are those which are regarded as established technology companies

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Elton James co-founded London-based Mariana in 2009

The fourth category consists of those companies which are labelled income and special situations.

INTERVIEW

The second category is similar to the first, but can be described as the owner-manager companies

Blue-Chip Investment Banking Team Take-On EIS Space ry

The first category is what Lawson described as long term family owned companies.

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So the message is clear. Don’t neglect the AIM stocks, they could just be what you’re looking for as an investment opportunity!

find a lot of the same characteristics, in terms of strong balance sheet, decent yield and prudent management, but because these businesses are a bit younger, they are usually a bit faster growing than the family business, and also tend to be run by the founder manager who still has a larger shareholding.” Third categorical stocks are those which are regarded as established technology companies, ones which are likely to grow, which are profitable and cash generative. They are not earlystage tech, not pre-revenue, or early pre-profit. What these companies have to be, said Lawson, are ones which a strong record of generating profits and strong cash-flows. The final category consists of those companies which are labelled income and special situations. “These companies don’t fall into the three other baskets. They usually have a very big yield. We also look for a reasonably well covered dividend, defensive qualities, and are non-cyclical.” So the message is clear. Don’t neglect the AIM stocks, they could just be what you’re looking for as an investment opportunity!

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this product for a very different reason. They are probably looking for capital preservation first and then growth afterwards.” “We are always hesitant to use the word capital preservation,” Lawson adds “because ultimately this is an investment into aim companies which are by definition higher up the risk spectrum, but what we’ll try to do is find the highest quality, least risky aim companies that we can.” Dividing the stocks into four categories helps the team organise in terms of their risk profile and opportunities. The first category is what Lawson described as long term family owned companies. There are probably third, or fourth generation companies where the family may still be represented on the Board, but they are probably not running the business. Lawson favours these type of companies, because: “The interest of the family members in those companies is perfectly aligned with the interest of the investors in our AIM portfolio.” For Lawson, this first category of stocks are his ‘bankers’. The second category is similar to the first, but can be described as the owner-manager companies which tend to be younger than those in the first category, but still have a significant founder interest. Lawson said: “You

Mariana Capital Markets might be a relative new player in the EIS space, but when you look at the pedigree of the founders, it’s clear that the team will soon be grabbing their fair slice of the tax-efficient action. Elton James co-founded Londonbased Mariana in 2009, and he and his partners have built a financial services firm with multiple business lines that include: asset management, structured investments, tax advisory, corporate advisory, analytical strategy and execution services in cash and equity derivatives.

The founding team has a bluechip investment house background. In James’ case, his alumni includes Lehman Brothers, Barclays Capital and also Merrill Lynch. “We all left the investment banking industry,” said James, “to take advantage of an opportunity to provide enhanced level of service to our institutional clients, including hedge funds, asset managers, investment banks and pension funds.” Since the early days of its existence – it was initially established as an innovative brokerage firm with the aim

www.eismagazine.com · Yearbook 2015/16

Finely crafted investments

Mariana Capital now has a reputation for expertise in the creation and distribution of innovative performance focused investments

Amati AIM IHT

Portfolio Service on Transact

Other Amati products: Amati VCT Amati VCT 2 TB Amati UK Smaller Companies Fund

Amati AIM IHT Model Portfolio Performance since inception 125

Amati AIM IHT Portfolio Service (after management & platform fees) FTSE AIM All Share Index TR

120 115 110 105 100 95 90 85

31/8/15

31/7/15

30/6/15

31/5/15

30/4/15

31/3/15

28/2/15

31/1/15

31/12/14

Source: Amati Global Investors

31/10/14

Amati Global Investors is an independently owned fund management company based in Edinburgh specialising in UK smaller companies, including a detailed knowledge of AIM stocks. Amati funds are managed by three managers, forming a team with deep experience of investing in UK Small cap. The Amati AIM IHT portfolio service provides a model portfolio built around mature, well managed, profitable and cash generative businesses, with a particular focus on high quality family-owned or founder-managed companies, and established technology enterprises. The Service is particularly suited to ISA Portfolios.

30/9/14

backed capital preservation products.” Capital preservation is a mantra of the Mariana team who have been influenced by their strong risk adverse management backgrounds, with over 40 years in the investment sector, where decent returns with lower risk has always been the key objective. This is where Mariana believes, together with its blue-chip contact list, that it can make its mark and set itself apart from other firms in the same sector. According to James: “There is a lack of capital preservation products in the EIS space at the moment. Post budget there is a real dearth of those products.” Given that James and his partners now work outside of the big firms they were once a part, it’s interesting to ask which they prefer. James gave an honest answer: “It was a real eye-opener, but it’s a wonderful challenge, no day is boring, that’s for sure. Everyone would agree, coming from a purely derivate background, it’s been nice to broaden our horizons into something which is very technical and specialist and into the much wider world.” Only time will tell if Mariana will carve for themselves a special place in the EIS market, but given the partner’s backgrounds and their determination, it might be unwise to bet against them. EIS

31/8/14

of providing global execution service – it has developed over the years to offer independent bespoke market analytics and trading strategies which are designed to complement existing trading models. James says that they now have a reputation for expertise in the creation and distribution of innovative performance focused investments. As James explained: “We diversified a lot, so we have a traditional asset manager that is really running a traditional strategy, so pension funds strategies and investing in the equity markets. We also began a structured product division in 2012, which was based on our derivative expertise with the background of the partners being in derivatives, and along the way we have expanded our offering to include tax services, which is tax services corporate advisory, that kind of field, and the move towards the tax efficient products has been a spin off from that.” James explained that Mariana will have two main tax efficient products, one an estate planning solution (a BPR qualifying company) and an EIS offering. “Both of them firmly target capital preservation,” said James, “and over time we may look for growth products, more traditional VC territory, but for now, we firmly focussed on our asset

Past performance isn’t a guide to future performance.

For full terms of business or to speak to one of the team, Call 0131 503 9100 Email info@amatiglobal.com Or visit: amatiglobal.com Calls are recorded and monitored.

James explained that Mariana will have two main tax efficient products, one an estate planning solution (a BPR qualifying company) and an EIS offering.

EIS Magazine · Yearbook 2015/16

Amati AIM IHT Portfolio Service is a discretionary investment management service available to clients of Advisers via the Transact Platform. Transact does not endorse or recommend the Amati AIM IHT Service. This advert is a financial promotion issued by Amati Global Investors Limited, authorised and regulated by the Financial Conduct Authority. Investors should be aware that investment in AIM-quoted companies carries a higher risk than those listed on the main market of the London Stock Exchange, mainly due to the lack of liquidity and higher volatility often found in these smaller companies, and they will generally have a wider spread between the bid and offer prices. The value of your investment may go down as well as up, and you may get back less than you invested. Past performance is not a reliable indicator of future performance. Company forecasts are subjective and should not be relied upon. Current tax rules and the available tax reliefs offered on investments into AIM-quoted stocks may change at any time, and there is a considerable risk that if the legislation changed in respect of these tax reliefs, then those portfolio companies that no longer qualified for such reliefs would be subject to heavy selling pressure, potentially leading to significant investment losses. Investors should consult their professional financial adviser to determine the suitabilty of this investment before they proceed.

BPR & Tax Planning Tony Müud, Tax & Trusts specialist at St. James’s Place, explores an option that’s often overlooked

Business property relief (BPR) solutions have, and continue, to evolve with investment options designed to cater for a variety of client requirements; including varying levels of risk and return. When it comes to tax planning however, there are a number of benefits common to the vast majority of the solutions on offer. These include: • Speed of IHT relief • Access and control • BPR falling outside of the nil rate band • Transfers between spouses do not reset the two year qualification period • Replacement rules preserve BPR qualifying status, provided proceed of qualifying investments are replaced within three years. Inheritance tax (IHT) can be a complex issue with personal, political, economic and indeed emotional implications, making it an area that many clients struggle to get to grips with.

IHT can have significant implications for clients and their families, and the variation in personal circumstances, needs and motivations can make planning a demanding area. BPR arrangements have a significant part to play and the following are examples of just how valuable such solutions can be. Elderly Clients or Those in Poor Health Many estate planning solutions either require a client to survive a period of seven years, or, rely on them being able to arrange life assurance. For the elderly, or clients in poor health, the fact that planning involving BPR is affective within two years and does not require underwriting, can be of significant value. This aspect can be further enhanced where the advisor is dealing with a couple who may both be elderly and/ or infirm. On the assumption their wills pass any BPR assets to each other on first death, and then just one of the couple survive a period of two years, the exemption will be available on the entire investment irrespective of who dies first. Finally, if a client has sold assets qualifying for BPR within the last three years - perhaps a business or qualifying AIM shares - a sum equal to the proceeds could be invested, and in this way, requalify immediately without the usual two year qualifying period. Attorneys and Deputies When an individual loses mental capacity their financial affairs will be dealt with either by an Attorney or

EIS Magazine · Yearbook 2015/16

a Court Appointed Deputy. In these circumstances significant limitations are imposed in relation to lifetime gifts (for Attorneys, Section 12 of the Mental Capacity Act 2005). Similar limitations are normally placed upon Deputies and while it is possible under a Continuing Power of Attorney in Scotland, for them to be given the power to make gifts, it is still unusual. As the individual who has lost capacity cannot therefore make gifts either out right or into trust; directly or via his Attorney/Deputy, the Mrs A is 87, has a significant estate but suffers from Vascular Dementia. She is incapable of looking after her own affairs. She qualifies for NHS continuing care, and consequently does not have to contribute to the cost of her care fees. Her son and daughter, who are her sole beneficiaries, hold a Lasting Power of Attorney. They are concerned about the IHT liability on their mother’s estate and would like to undertake some planning. They are aware that as their mother has lost capacity, their IHT options are restricted as their powers as Attorneys do not extend to making substantial gifts. Keen to avoid an application to the Court of Protection (a costly and time consuming exercise) which may permit them to engage in a strategy of gifting, they elect to invest in a BPR product. After two years this provides 100% IHT relief and importantly the assets remain registered in Mrs A’s name i.e. there has been no gift.

www.eismagazine.com · Yearbook 2015/16

Inheritance Tax (IHT) can be a complex issue with personal, political, economic and indeed emotional implications

ability to make an investment that will become exempt from IHT after two years, can often be the only solution.

Combining BPR and Trusts It is a fairly common scenario; both husband and wife are on their second marriages, both with children from their first marriage and with separate finances. While they may have agreed that their own money will be passed to their own children upon their death, one partner may have a much higher income so want to ensure that their spouse receives sufficient financial support, in the event of his or her own death. The simple solution to this situation is to leave the income from the richer partners’ capital to their spouse in their will. Then, on second partners’ death, the capital is to be distributed to the first partners’ children from the first marriage. This is an ‘immediate post death interest trust’ or ‘interest in possession trust’. However, the value of the trust will be deemed as an asset of the second partners’ estate, and, as such, liable to IHT. If the interest in possession trust were to invest in a BPR product, then after two years, assuming the second partner survives his or her spouse by this period, and the arrangement is held until the time of his or her death, then the trust assets, to the extent that they are invested in BPR solutions, will be exempt from IHT. This strategy would also enable the full amount of the

second partner’s own nil rate band to be applied against his or her own estate when they die, thus protecting it for the full benefit of his or her own children. Miss B is 62 and owns a successful trading business. Unfortunately, having worked hard to build up her business, is diagnosed with a debilitating illness and would like to sell and retire so that she can enjoy the rest of her life. The nature of the business means that it already qualifies for BPR. However once the shares are sold, the proceeds will potentially be liable for IHT, if, as seems likely, Miss B’s death occurs in the short term. She is concerned about the effect the IHT charge will have on the bequest she would like to leave her nieces and nephews. However, if Miss B sells her shares and invests the proceeds into a BPR qualifying arrangement, the funds will continue to receive BPR relief without interruption, provided the investment is made within three years of the sale of her business. In this way, even if her death occurs shortly thereafter, the purchase of the BPR shares, this part of her wealth will remain exempt from IHT. If her death does not happen in the short term, she still retains full access and control over her investment should she need it in the future.

Given the attractions of BPR investment solutions, it is not surprise that they are a subject on HMRC’s radar Business Owners For many business owners their business offers the perfect shelter from IHT. However, when the business is ultimately sold the protection from IHT will be lost. This need not, however, be the case.

BPR - A Gateway to Discretionary Trusts In 2006 the government made some fundamental changes to the taxation of trusts. This effectively left discretionary trusts as the last remaining type of flexible IHT efficient trust. However, gifts to discretionary trusts in excess of the nil rate band are subject to a 20% up-front chargeable lifetime transfer tax. In practice, due to the grossing up rules, this charge is actually 25% on the settlor in most occasions. This can be avoided if the investment to be placed into trust is held in a BPR qualifying asset for two years prior to being moved into the trust, as this eliminates any chargeable lifetime transfer. Furthermore, where monies going into the discretionary trust are within three years prior eligibility

for BPR, it is possible to make a BPR investment and immediately transfer the funds into the discretionary trust; again avoiding any chargeable lifetime transfer. It is important to note, however, given the current political climate in respect of tax avoidance, that this latter solution should not be pre-ordained. Finally, a Word of Warning Given the attractions of BPR investment solutions, it is no surprise that they are a topic on HMRC’s radar. The Finance Act 2013 introduced anti-avoidance provisions specifically to deal with one type of planning using BPR which it considered at least against the spirit of what parliament intended. The measure introduced by the Finance Act concerns the basic rule that IHT is charged on the net value of an estate after deduction of liabilities. If, prior to the 6 April 2013, an individual died with an outstanding debt that was used to purchase a BPR investment, their estate affectively got double benefit for IHT purposes. Under the new provisions, where a liability is attributed to financing the acquisition of property which qualifies for BPR, the liability will reduce the value of the investors’ estate only if it is paid out of the estate in money or monies worth. This is to ensure that loans financing the purchase of exempt or relievable property are deducted from the value of the assets qualifying

for relief, such that there is no double tax benefit. BPR solutions are now firmly established, reasonably well understood and offer a plethora of potential solutions in the estate planning market. One misconception remains however, that they also represent an alternative strategy to the more common IHT mitigation tools. The reality is that BPR should be seen as a complimentary solution, that can be Mr C borrows £400,000 and purchases an investment qualifying for BPR. He dies four years later and his BPR investment is now valued at £500,000. Is subject to BPR at 100% and therefore exempt from IHT. He also has property worth £500,000 and investments of £450,000. Prior to the changes the loan could have been offset against his property or investments. However, since the change the loan will now be offset against the relievable assets i.e. the BPR Investment such that the house and investments remain within the taxable estate.

combined with many other techniques; almost always with interesting and enhancing results. EIS

all about Ultimately, it’s le r dearest peop caring for you

EIS Magazine · Yearbook 2015/16

www.eismagazine.com · Yearbook 2015/16

Great Point Media Based in central London, Great Point Media (“GPM”), formed by a team of expert media professionals, offers a unique blend of experience in entertainment media and alternative investments. The team, with over 60 years’ experience in the media sector, including the running of production and content distribution businesses as well as major television networks, have also managed in excess of £300m of EIS qualifying media investments with an impeccable track record of delivering timely EIS certificates and target returns to investors over six years.

GPM currently offer three different investment strategies across EIS, SEIS and BPR. The Select Television Production EIS pursues a focussed strategy of investing in UK based television production companies that have the potential to deliver capital growth as well as offering some downside protection, whilst the Select Media SEIS business model looks to invest into shares of early-stage media companies that have the potential to deliver significant growth across multiple sectors including television, creative technology, music, books, film and new media. Illium, GPM’s BPR qualifying investment opportunity, focusses its business model on secure, asset-backed lending with its primary objectives being to preserve capital and deliver predictable returns.

EIS GUIDE Comprehensive listing of EIS, SEIS, VCT, BPR, SITR providers and schemes

GPM’s over-arching investment philosophy is focused on the efficient deployment of capital into high quality media projects, made possible by its proprietary deal flow and modest target fundraises across its various offers. This, combined with a fee structure aligning GPM’s interests to those of its investors, ensures that the client coming first remains the central pillar to the long term success of the business.

Contact Details: T. 0207 550 5512 E. info@greatpointmedia.com www.greatpointmedia.com

Seed EIS Platform – Crowdfunding for Advisers Seed EIS Platform is a multi-function platform which works with intermediaries to provide SEIS and EIS eligible single company investments. Founded in 2012 it has completed 34 investment rounds into 27 different businesses. The investment team has considerable experience across early stage venture capital, small cap equity, entrepreneurship and wealth management. Seed EIS Platform provides a solution for advisers to maintain control of client assets and ensure investment suitability through our controlled deal flow, in contrast to direct to consumer crowdfunding offerings. We also facilitate adviser fees in a simple RDR compliant way. Our portfolio of investment opportunities, across a wide range of sectors and business stages have all undergone various levels of due diligence. Alongside this, we advise businesses on fundraising and HMRC process whilst assisting in structuring investments. This enables advisors to refer clients making private single-company investments, such as those into friends’ or family businesses. Benefits include a standardised process, due diligence on the business and the ability to centralise the investment alongside other client EIS assets. Key benefits: • Free registration for investors and advisers - no ongoing charges • Straightforward gateway to numerous SEIS & EIS qualifying single companies • Simple online portal to manage and monitor client investments • Provides independent company due diligence reports • HMRC certification process • White label product/company structuring capabilities • Facilitates adviser fees in a simple, RDR-compliant way

EIS Magazine · Yearbook 2015/16

Contact Details: T. (+44) (0)20 7071 3945 E. enquiries@seedeisplatform.com Seed EIS Platform, Candlewick House, 120 Cannon Street, London EC4N 6AS

www.eismagazine.com · Yearbook 2015/16

The Seneca EIS Portfolio Service

Triple Point

“Seneca Partners was formed in 2010 bringing together a first class team of finance professionals with over 300 years of combined investment experience, extensive contact networks and exceptional deal flow. We have a dedicated team who specialize in private company equity investments targeting companies who can demonstrate sound underlying business fundamentals and strong growth potential. Our focus is on helping companies to grow.

Triple Point are private investment specialists founded in 2004. We build innovative products for investors and offer attractive financing solutions to a range of businesses and organisations in both the public and private sector (product range across VCT, EIS and BPR sector). CAREFUL EXECUTION: Our experience and expertise enables us to unlock unique opportunities for our investors. To deliver these we match the requirements of private investors seeking capital security, liquidity and a clear exit strategy with the needs of carefully vetted small and medium sized companies seeking funding.

“With a presence in Manchester, Liverpool, Leeds and Birmingham, we are well represented in the UK’s SME heartlands. The established, trusted and high quality contact network of the Seneca Partners team, which includes fellow professionals, funders, investors and SMEs themselves, is critical to our ability to source the most interesting and compelling investment opportunities. The combination of our network and our location ensures that our EIS investment deal flow remains buoyant. We expect to complete 15-20 EIS Investment deals per year in the normal course of our business.

DIVERSE EXPERIENCE: Typically, we select opportunities which fund tangible assets, or help organisations to deliver the essential services they provide to their customers. We select investments from across a range of sectors which has included technology, renewable energy, and asset finance.

“We also advise on the strategic development of our Investee Companies throughout the investment period and on the options available to realise each investment once the three year period has ended.”

TRIPLE POINT EIS SERVICE: Open all year round, to date we have arranged over £90m of EIS funding into companies across a number of sectors such as energy production, efficiency and infrastructure. Looking forward, these sectors continue to provide a large pipeline of opportunities for 2015/16 tax year investors. With the recent addition of Community Solar PV to the pipeline, another tried and tested EIS trade.

Ian Currie, CEO, Seneca Partners

The Seneca EIS Portfolio Service Our EIS portfolio service targets well managed businesses that can demonstrate established and proven concepts along with good balance sheet strength and are looking to take the next step in their growth phase. We will back earlier stage investments where we have a successful existing relationship with management or where there is clear visibility of liquidity through an Initial Public Offering (IPO) process. The Seneca EIS Portfolio Service is a compelling investment option which combines the significant tax benefits available under the Enterprise Investment Scheme with the potential for attractive returns. We do not factor tax reliefs into our targeted investment returns and consider each opportunity on its merit regardless of the tax reliefs available.

The Triple Point EIS Service aims to provide capital preservation to investors, with opportunities targeting returns between £1.10 to £1.15 per share, not taking into account the initial income tax relief received by investors.

On the launch of the Triple Point EIS Service, Allenbridge published a report which concludes:

“In summary, this well regarded Manager sets out to provide low risk investment relative to many other EIS, and prompt exit after the three year obligatory holding period. The modest returns emphasises the importance of claiming the EIS tax reliefs, which the Manager has established a good record in achieving.”

For more information please contact LGBR Capital T. +44 20 3195 7100 E. sales@lgbrcapital.com

T. 020 7201 8990 E. contact@triplepoint.co.uk www.triplepoint.co.uk

Allenbridge Tax Shelter Report TP EIS Service June 2015

www.lgbrcapital.com

Contact the Sales Team on

Oxford Capital

Oxford Capital aims to makes tax-efficient investments accessible, easy to understand and hassle-free for investors and their financial advisers. They manage investments with one principle in mind – looking after clients’ money as though it were their own. The firm has two distinct investment strategies, Infrastructure and Growth, accessible through a range of tax-efficient investment structures. Its Infrastructure investment team source, execute and manage investments into companies which own and operate infrastructure assets. Oxford Capital’s current investment focus is on small-scale power generation sites and renewable power installations. These assets are typically capable of generating stable revenues through long-term contracts, and they may also benefit from government subsidies. Clients can invest through Oxford Capital’s Infrastructure EIS and its BPR-focused Estate Planning Service. Oxford Capital’s Growth team builds partnerships with the founders and entrepreneurs behind small businesses seeking to solve big scientific, technological or commercial problems. The current portfolio includes companies operating in a range of sectors, including games development, digital marketing software, sustainable agriculture and healthcare. Clients can acquire a portfolio of shareholdings in this type of investment through the Oxford Capital Growth EIS.

Winner of ‘Best EIS Fund’ at the EIS Association Awards 2015 •

•

Calculus Capital - pioneers of the EIS market - created the UK’s

•

investing in growing UK companies assures investors of our ability to make sensible investments capable of delivering excellent returns at every stage of the economic cycle.

•

Our investment strategy strikes the right balance of risk preservation and award-winning performance. By investing in more established businesses with proven management teams,

Contact Details:

For more information contact:

T. 01865 860760

Madeleine Ingram, Head of Investor Relations

E. investment@oxcp.com

We are known in the market for our unrivalled performance and focus on capital appreciation. To date we have achieved over 20 Exits with an average ROI of 3.4x, not including tax reliefs. Our personal client service, in depth experience and commitment to delivering robust returns has created a loyal investor base, with an impressive repeat investor rate.

EIS Fund 16 is open for investment

madeleine@calculuscapital.com | 020 7493 4940 | www.calculuscapital.com

www.oxcp.com Oxford Capital, 201 Cumnor Hill Oxford, OX2 9PJ WINNER BEST EIS FUND MANAGER 2009

EIS Magazine · Yearbook 2015/16

WINNER BEST EIS FUND MANAGER 2012

BEST EIS INVESTMENT EXIT 2012

www.eismagazine.com · Yearbook 2015/16

Risk Warning: Potential investors should read the Information Memorandum carefully, and consult their professional advisers. Investors must be able to bear the risks associated with the Fund,and must meet the Fund’s suitability requirements. Data displayed above is as of June 2015.

EIS

Octopus Eureka Enterprise Investment Scheme Portfolio Service

Open

Octopus Eureka EIS is a discretionary managed portfolio that aims to provide investors with a broad range of tax benefits by investing in EIS-qualifying early stage UK companies. The diverse portfolio of companies, across a range of industries and sectors, offers the potential for significant growth over the long term (more than five years).

Evergreen

Amount to be Raised: Unlimited

A unique investment approach: Octopus Eureka EIS clients typically hold a portfolio of at least 15 EIS-qualifying companies. These may be either early stage, unquoted companies with the potential for high growth; or companies that are listed on the Alternative Investment Market (AIM), part of the London Stock Exchange. Investments in unquoted companies are managed by the Ventures team at Octopus, which specialises in investing in fast-growing unlisted companies. The Ventures team includes investment professionals from a wide variety of backgrounds, including former entrepreneurs, professionals, academics and industry experts. Investments in companies listed on AIM are managed by the Octopus Smaller Companies team. They look after AIM mandates worth more than £785 million (as at 31/08/2015, source: Octopus), across a range of Octopus products.

Calculus Capital EIS Fund 16

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

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.

Deepbridge Technology Growth EIS

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.

EIS Magazine · Yearbook 2015/16

04/06/2015

24/06/2016

Amount to be Raised: £30m Minimum Investment: £50,000

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

EIS Open

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. 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 disruptive in a high growth/high value market sector.

EIS Open

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.

The target return for the Deepbridge Technology Growth EIS is 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.

T. 0800 316 2067 E.salessupport@octopusinvestments.com www.octopusinvestments.com/eis

01/08/2013

Open-ended

Amount to be Raised: Uncapped

T. 01244 893182 www.deepbridgecapital.com

www.eismagazine.com · Yearbook 2015/16

EIS Open

Now

Evergreen

Minimum investment: £25,000

T. 020 7361 0212 E. fundenquiries@mmcventures.com www.mmcventures.com

EIS Open

Now

Evergreen

Amount to be Raised: Unlimited Min Investment: £25,000

T. 020 7201 8990 E. contact@triplepoint.co.uk www.triplepoint.co.uk

EIS Open

Now

Evergreen

Minimum Subscription: £10,000

Oxford Capital Infrastructure EIS

The MMC Ventures EIS Fund offers investors exposure to a portfolio of hard-toaccess, fast growing private companies, combing real capital upside potential with generous EIS tax reliefs.

Through the Oxford Capital Infrastructure EIS, investors can benefit from EIS tax advantages including 30% income tax relief and tax-free gains, by acquiring shares in one or more EIS-qualifying companies that own and operate infrastructure assets.

Founded in 2000, MMC is regularly rated as one of the top 5 most active venture investors in the UK, investing circa £20 million per annum in a combination of new deals and follow-on capital for existing portfolio companies. An investor in the MMC EIS Fund can expect a portfolio of 8-10 companies within 12-15 months of subscribing. The MMC EIS Fund is categorised as a generalist product but has a clear investment focus on technology-enabled sectors where the UK is a world leader - particularly financial and business services, business software, digital media and e-commerce. MMC’s fundamental approach is to invest on the commercial merits of each transaction, viewing the EIS tax benefits as highly desirable but not the reason to invest. This approach is reinforced by their policy of co-investing their EIS Fund alongside other funds they manage that do not qualify for EIS tax relief.

Triple Point EIS Service The Triple Point EIS Service targets investments across a range of sectors including energy, infrastructure and construction.

The investment strategy has been shaped by our extensive and successful experience managing EIS qualifying investments, where we adopt a cautious and meticulous approach to managing investors’ capital without losing the ability to capture growth opportunities.

EIS Magazine · Yearbook 2015/16

Open

Oxford Capital aims to invest in companies capable of generating stable revenues through long-term contracts, producing returns of £1.10-£1.15 per £1 invested (net of applicable fees and not including the impact of EIS income tax relief).

Shares are normally purchased for the investor within 4-6 weeks of submission of their subscription. EIS3 certificates are available on average 12 months after purchase of shares. Oxford Capital will aim to sell the shares to a strategic acquirer and return capital to investors after the fourth year of the investment.

Evergreen

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

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

Open

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.

This enables the Service to target returns in excess of 10% per annum, taking into account the initial income tax relief received by investors, and to target transparent exit strategies which are designed to facilitate an exit for investors after three years.

Rockpool’s EIS Portfolio Service

Kuber Ventures Multi Manager Platform

Rockpool’s EIS Portfolio Service offers an alternative to traditional EIS funds. Rockpool creates direct private company investment opportunities for its Network of members which includes hundreds of successful entrepreneurs and professionals from a wide range of business sectors. Deals created for the Network are also open to a wider audience of investors through Rockpool’s EIS Portfolio Service. Rockpool targets companies which are profitable or asset rich. Asset rich sectors include crematorium operation, electricity generation, construction project delivery, managed storage services and children’s nurseries.

Kuber Ventures Multi Managers EIS Platform, has a range of portfolios which are each diversified across a number of Fund Managers. Through a single application and depending on the portfolio selected, our Portfolios allow investors to create a diversified spread of up to 40 qualifying EIS investments.

There are two ways to access the service: ∞ Self-select service – the investor selects which companies to invest in with a minimum of £10,000 per company ∞ Managed Service – Rockpool selects the companies to match the investment strategy of the investor. Minimum investment of £10,000 which will be spread across a number of companies.

Evergreen

EIS

Oxford Capital Growth EIS

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.

Rockpool’s model offers full transparency and control with meet the management sessions, regular updates, investment reviews and an on-line portal. T. 0207 015 2150 E. team@rockpool.uk.com www.rockpool.uk.com

EIS

MMC Ventures - EIS Fund

Evergreen

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

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

EIS Open

Now

SEIS Close

Evergreen

Minimum Subscription: £20,000

Investors may select individual funds or choose to achieve further diversification by investing in one of the Kuber Portfolios available. Our 7 Portfolios choices Include: • Diversified Growth ( Fund of 7 Funds ) • Asset Backed ( Fund of 5 Funds ) • Seed & Early Stage Growth ( Fund of 3 Funds ) • Mature Growth ( Fund of 4 Funds ) • Long Term Investment Focused ( Fund of 5 Funds ) • Media ( Fund of 5 Funds ) • Seed EIS Strategy (Fund of 2 Funds)

E. info@kuberventures.com www.kuberventures.com

www.eismagazine.com · Yearbook 2015/16

EIS

SEIS

Open

Evergreen

Amount to be Raised: No Max Minimum Investment: £5,000

Seed EIS Platform - Crowdfunding for Advisers Seed EIS Platform is a multi-function platform which works with intermediaries to provide SEIS and EIS eligible single company investments. Founded in 2012 it has completed 34 investment rounds into 27 different businesses. The investment team has considerable experience across early stage venture capital, small cap equity, entrepreneurship and wealth management.

Seed EIS Platform provides a solution for advisers to maintain control of client assets and ensure investment suitability through our controlled deal flow, in contrast to direct to consumer crowdfunding offerings. We also facilitate adviser fees in a simple RDR compliant way. Our portfolio of investment opportunities, across a wide range of sectors and business stages have all undergone various levels of due diligence. T. +44 (0)20 7071 3945 E. enquiries@seedeisplatform.com www.seedeisplatform.com

EIS

SEIS

Open

January 2015

N/A

Amount to be Raised: £5m

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

SEIS Open

01/07/2015

31/03/2016

Amount to be Raised: £1.5m

T. 01244 893182 www.deepbridgecapital.com

EIS Magazine · Yearbook 2015/16

Alongside this, we advise businesses on fundraising and HMRC process whilst assisting in structuring investments. This enables advisors to refer clients making private single-company investments, such as those into friends’ or family businesses. Benefits include a standardised process, due diligence on the business and the ability to centralise the investment alongside other client EIS assets.

An inheritance tax service that helps you help them

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.

By creating investment solutions that focus on business property relief (BPR), our inheritance tax planning solutions could help your client reduce or eliminate the inheritance tax bill on their estate, helping them to pass on more to their loved ones. To find out more about BPR and how you could help your clients reduce their inheritance tax obligation, talk to Octopus on 0800 316 2067 or visit octopusinvestments.com.

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

The Deepbridge Life Sciences SEIS seeks to fund companies with exciting new technologies that satisfy the needs of large and growing markets. The overarching focus of the Deepbridge Life Sciences SEIS offers investors companies engaged in the development of therapeutics for the following areas: • Anti-viral drug discovery and development • Antibiotic drug discovery and development • Neurodegenerative disease therapeutics • Cancer diagnostics and therapeutics • Autoimmune and other metabolic disorders therapies The target return for the Deepbridge Life Sciences SEIS is >35% over a minimum of five years; representing mid-case capital growth of 250p returned for every 100p invested. To ensure maximum tax efficiency for the investor, the Deepbridge Life Sciences SEIS is entirely investor-fee free at point of investment.

Important information For professional advisers only. Not to be relied upon by retail investors. Your client’s capital is at risk and investors may not get back the full amount invested. Tax treatment depends on the individual circumstances of each investor and may be subject to change. The availability of tax reliefs also depends on the investee companies maintaining their qualifying status. Issued by Octopus Investments Limited, which is authorised and regulated by the Financial Conduct Authority. Registered office: 33 Holborn, London, EC1N 2HT. Registered in England and Wales No. 3942880. Issued: 15/09. CAM02554-1509

SITR Open

TBC

Evergreen

Minimum Subscription: £10,000

Amati AIM IHT Portfolio Service

Social Investment Tax Relief (SITR) is a new HMRC approved tax relief with many similarities to the Enterprise Investment Scheme.

Amati Global Investors offers a discretionary managed AIM portfolio service which advisors can access for their clients via the Transact platform. The Service has recently passed its one year anniversary, having returned 19.5% vs -4.6% FTSE AIM All Share Index TR (period August 2014 – August 2015 Source: Amati Global Investors Ltd) Past performance

This new relief has one striking difference: lending is permitted under Social Investment Tax Relief rules. This makes it possible to control risk more tightly and achieve greater certainty of liquidity than for a typical EIS investment.

Rockpool’s new SITR Portfolio Service will offer shares and loan investments in companies that qualify for Social Investment Tax Relief. There will be a minimum investment of £10,000. T. 0207 015 2150 E. team@rockpool.uk.com www.rockpool.uk.com

IHT Open

Now

Evergreen

Minimum Subscription: £50,000

Rockpool’s model offers full transparency and control with meet the management sessions, regular updates, investment reviews and an on-line portal.

Rockpool’s Managed Inheritance Service Rockpool’s Managed Inheritance Service is designed to deliver 100% exemption from inheritance tax after two years.

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

IHT Open

Now

Evergreen

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

Rockpool’s Managed Inheritance Service facilitates adviser charges or introducer fees.

EIS Magazine · Yearbook 2015/16

The portfolio is made up of profitable companies which fit into one of four categories: owner-managed; family businesses with well-built brands; established technology companies; and special situations with attractive yields. The client portfolios are managed to a single model, hence all clients will hold the same portfolio of holdings with broadly the same weightings. The management fee is 1% plus VAT on portfolio value, paid quarterly in arrears, deducted from the clients’ account, with no initial or exit charges made by the manager. Trade execution and ongoing charges at Transact’s standard platform rates. Please consult your adviser for details. Key Features • Minimum investment £50,000 • Shareholdings expected to qualify for 100% IHT relief after 2 years • Can be held in an ISA

Downing LLP: The Downing Estate Planning Service

The Downing Estate Planning Service offers investors the opportunity to obtain up to 100% IHT relief on their subscription after only two years (so long as the shares are held at death). The service aims to preserve capital by investing in two distinct sectors, which we believe offer lower-risk investment opportunities than some other tax-efficient sectors: asset-backed businesses, such as health clubs, hotels, care homes and pubs; and renewable energy businesses, including those in the solar and AD sectors. With immediate exposure to a diverse portfolio of over 50 businesses, subscriptions can be invested into either our asset-backed or renewables portfolio, or split between the two. At Downing, we design and manage investment products that help our investors look after their financial wellbeing, while our investment partnerships support small UK businesses in their ambitions. We currently have over £650 million of assets under management, of which approximately £150 million is in IHT/BPR products*. *Source: Downing LLP

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.

Oxford Capital Estate Planning Service

Offering Diversification from Simple Investments in Real Assets

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.

For the last 10 years Triple Point has provided successful BPR solutions to investors looking to mitigate IHT by providing funding for leasing and asset finance into Local Authorities, the NHS, and to small businesses and multinational companies.

Open

isn’t a guide to future performance.

Triple Point Estate Planning Service

The Estate Planning Service gives investors the opportunity to select their own target return by blending our two successful strategies; Navigator and Generations. This provides target returns in the range 1.5% to 6.0%, after all fees and charges. T. 020 7201 8990 E. contact@triplepoint.co.uk www.triplepoint.co.uk

IHT

Rockpool’s SITR Portfolio Service

Now

Evergreen

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

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

IHT

BPR

Open

Now

Evergreen

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

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

BPR Open

Evergreen

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

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.

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

www.eismagazine.com · Yearbook 2015/16

Advertorial

Puma Investments offers a range of tax-efficient investments with an established track record of delivering for our investors and the businesses we support.

1.PROVEN TRACK RECORD: Our focus on delivering shareholder returns has seen us pay out over £76 million of the £225 million raised since 2005 in dividends. Our first five Puma VCTs have successfully led their peer groups for total returns while Puma VCT V has produced the highest return to date for a limited life VCT. The fundraising record for limited life VCTs in the 2013/14 tax year is also held by Puma VCT 10, which is equal to 54% market share.

2. FOCUS ON CAPITAL PRESERVATION: This is our principle aim, along with seeking to provide robust downside protection and stable returns. We never forget that we are being entrusted with our investors’ money. In the last year alone we executed just 13% of over £330m deals reviewed, reflecting our conservative approach which sees us invest in only established businesses. 3. ASSET-BACKED: We have a strong, high quality pipeline of well managed businesses seeking funding with experienced management teams, robust business plans and substantial tangible assets over which security may be taken. Our highly experienced investment team sources opportunities from across the UK to provide asset-backed funding to the SME market, supporting successful British businesses.

4. EXPERIENCED TEAM / EXPERT, MULTI-DISCIPLINARY TEAM: Puma Investments is part of Shore Capital: a wider financial services group, listed on AIM, with a 30 year track-record of excellence, a strong balance sheet and a 110 strong multi-disciplinary team across five offices. Our multi-disciplinary team draws from their diverse professional backgrounds and extensive deal experience to ensure transactions are sourced, evaluated and executed in an effective and thorough manner. 5. HOW WE HELP YOU: At Puma Investments, we go further to support shareholders at every stage of the sales process, meeting with clients on a regular basis and providing access to our investment managers. A number of our dedicated team have first-hand experience of working in financial advice, giving us a true understanding of the issues that matter to your business. We offer financial investments, not financial advice. We always recommend investors speak to a financial adviser before making any decisions, and in the case of our Puma EIS, Puma Heritage and Puma AIM Inheritance Tax Service, we only accept investments through advisers. Important information

This document 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 clients’ 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. 58

EIS Magazine · Yearbook 2015/16

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Five Things You’ll Like About Puma Investments

Twenty Four Seven IFA Magazine, Britain’s premier online portal and print publication for financial advisers, has launched its ver y own app designed to help you stay up to date with all the latest financial and economic news as it happens.

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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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