Information Memorandum - Foresight Group

INFORMATION MEMORANDUM WITH APPLICATION FORM MAY 2013 

FORESIGHT SOLAR EIS FUND 3 

Targeting capital growth 

from solar power

IMPORTANT NOTICE 

This information memorandum (“Information Memorandum”) dated 

May 2013 constitutes a financial promotion pursuant to section 21 

of the Financial Services and Markets Act 2000 (“FSMA”) issued by 

Foresight Group LLP (“Foresight”), which is authorised and regulated 

by the Financial Conduct Authority (“FCA”) (FCA number: 198020) 

and whose registered office is at ECA Court, 24–26 South Park, 

Sevenoaks, Kent TN13 1DU. 

This Information Memorandum is issued solely for the purposes 

of seeking applications to the Foresight Solar EIS Fund 3 (“Fund”). 

All potential Investors should seek specialist independent tax 

and financial advice from a financial adviser authorised under 

the Financial Services and Markets Act 2000 (“FSMA”) before 

subscribing to the Fund to ensure that this opportunity is a suitable 

investment in light of the contents of this Information Memorandum 

and their individual circumstances. 

The contents of this Information Memorandum are not to be taken 

as constituting advice relating to legal, taxation or investment 

matters and should not be relied upon for the purposes of making 

an investment or other decision, and your attention is drawn to 

the section headed “Risk Factors” on pages 21 to 23. Participation 

in the Fund will not be suitable for all recipients of this Information 

Memorandum. Reliance on this Information Memorandum for the 

purpose of engaging in any investment activity may expose an 

individual to a significant risk of losing all of the property or other 

assets invested. 

The Fund comprises a number of discretionary managed Portfolios, 

which are managed on behalf of individual Investors in accordance 

with the investment objectives and restrictions set out in Schedule 

1 of the Investor’s Agreement. Each Investor, for legal and tax 

purposes, is the beneficial owner of a specific number of Shares 

in each Investee Company, the aggregate of which, together with 

uninvested cash held on behalf of the Investor, comprise his or her 

Portfolio. The combined Portfolios comprise the Fund which is an 

unapproved EIS fund. 

Applications may only be made, and will only be accepted, subject 

to the terms and conditions of this Information Memorandum. 

Foresight has taken all reasonable care to ensure that all the facts 

stated in this Information Memorandum are true and accurate in 

all material respects and that there are no other material facts, 

or opinions which have been omitted, which would make any part 

of this promotion materially misleading. All statements of opinion 

or belief contained in this Information Memorandum and all 

views expressed and statements made represent Foresight’s own 

assessment and interpretation of information available to them as 

at the date of this Information Memorandum. No representation is 

made, or assurance given, that any statements, views or forecasts 

are correct or that the objectives of the Fund will be achieved. 

Prospective Investors must determine for themselves what reliance 

(if any) they should place on such statements, views or forecasts and 

no responsibility or liability (whether direct, indirect, consequential 

loss or other) is accepted by Foresight or its members and 

employees in respect thereof. 

The information contained in this Information Memorandum makes 

reference to the current laws concerning EIS relief, IHT relief and 

CGT deferral. Such information may be subject to change and 

is not guaranteed. The tax reliefs referred to in this Information 

Memorandum are those currently available and their value depends 

on individual circumstances. 

Past performance is not necessarily a guide to future performance 

and may not necessarily be repeated. You should be aware that 

share values and income from them may go down as well as up 

and you may not get back the amount you originally invested. 

Changes in legislation in respect of the EIS in general, and qualifying 

investments and qualifying trades in particular, may affect the ability 

of the Fund to meet its objectives and/or reduce the level of returns 

which would otherwise have been achievable. 

The attention of prospective investors is drawn to the fact that 

amounts invested through the Fund on behalf of the Investors 

will be committed to investments which may be of a long term 

and illiquid nature. Neither the Fund nor the companies in which 

it invests will be quoted on any recognised or designated investment 

exchange and, accordingly, there will not be an established or 

ready market for participation in the Fund nor the underlying 

investments. Investments made through the Fund will not, 

therefore, be easily realisable. 

This Information Memorandum does not constitute, and should 

not be considered as, an offer to buy or sell or solicitation of an 

offer to buy or sell any security or share. It does not constitute a 

public offering in the United Kingdom. In addition, this Information 

Memorandum does not constitute an offer or solicitation in any 

jurisdiction in which such an offer or solicitation is not authorised 

or in which the person making such offer or solicitation is not 

qualified to do so or to any person to whom it is unlawful to make 

such an offer or solicitation. It is the responsibility of each recipient 

(including those located outside the UK) to satisfy himself or herself 

as to full compliance with the Applicable Laws and regulations 

of any relevant territory in connection with any application 

to participate in the Fund, including obtaining any requisite 

governmental or other consent and observing any other formality 

presented in such territory. 

This Information Memorandum includes statements that are (or may 

be deemed to be) “forward-looking statements”. These “forwardlooking 

statements” can be identified by the use of forward-looking 

terminology including the terms “believes”, “continues”, “expects”, 

“intends”, “may”, “will”, “would” or “should” or, in each case, their 

negative or other variations or comparable terminology. These 

“forward-looking statements” include all matters that are not 

historical facts. “Forward-looking statements” involve risk and 

uncertainty because they relate to future events and circumstances. 

“Forward-looking statements” contained in this Information 

Memorandum based on past trends or activities should not be 

taken as a representation that such trends or activities will continue 

in the future. Subject to any requirement under Applicable Laws 

and regulations, Foresight does not undertake to update or revise 

any “forward-looking statements”, whether as a result of new 

information, future events or otherwise. Investors should not place 

undue reliance on “forward-looking statements”, which speak only 

as at the date of this Information Memorandum. 

FURTHER INFORMATION 

If you require any further information relating to the Fund 

please contact the sales team at Foresight by telephone on 

01732 471812 or by e-mail to sales@foresightgroup.eu. 

Please note that Foresight is not able to provide you with 

investment, financial or tax advice.

CONTENTS 

PAGE 

n EXPECTED TIMETABLE AND STATISTICS 2 

n LETTER OF INTRODUCTION 3 

n SUMMARY OF TAX RELIEFS 4 

n INVESTMENT OPPORTUNITY 5 

n FUND MANAGER 5 

n INVESTMENT STRATEGY 5 

n DEALFLOW 7 

n RETURNS 7 

n STAYING INVESTED 8 

n CHARGES 8 

n LIQUIDITY 9 

n FUND STRUCTURE 9 

n HOW TO INVEST 9 

n INTRODUCTION TO SOLAR POWER INVESTING 11 

n INVESTMENT TEAM 18 

n RISK FACTORS 21 

n APPENDIX 1: TAXATION 24 

n APPENDIX 2: INVESTOR’S AGREEMENT 26 

n APPENDIX 3: GLOSSARY OF TERMS 36 

n APPLICATION FORMS AND ADVISER CERTIFICATE 38 

n DIRECTORY 45 

Since its establishment in 1984, Foresight has built a reputation for creating innovative and 

successful investment products that meet the needs of private investors. We now have over 

12,000 investors and assets under management of over £650million.

EXPECTED TIMETABLE AND STATISTICS 

Fund Name Foresight Solar EIS Fund 3 

Fund Structure Unapproved EIS Fund 

Target Size £20 million* 

Sector Focus Unquoted companies which derive their 

revenues from generating solar electricity, 

primarily in the UK 

Fund Manager Foresight 

Target Portfolio Size 4 Solar Power Plants with assets capable of generating 

c. 20MW of electricity, or significantly more depending 

on refinancing opportunities** 

Minimum Investment £10,000 

Closing Date 31 October 2013 *** 

* Foresight may, at its discretion, increase the target size of the Fund 

** Depending on the funds raised and the investment opportunities secured 

*** The Closing Date may be brought forward if the Fund is fully subscribed or extended to a 

later date, in each case at Foresight’s discretion. 

FORESIGHT’S BRIDGWATER SOLAR PLANT SOMERSET 2MW 

OPERATIONAL JULY 2011 

02 FORESIGHT SOLAR EIS FUND 3

LETTER OF INTRODUCTION 

MAY 2013 

DEAR INVESTOR 

The solar sector in the UK has been transformed by 

financial incentives initiated by the Government which have 

accelerated the pace of development. Over the past three 

years installed capacity has increased from 27MW in 2009 

to over 2 GW today. The introduction of revenue support 

schemes in other countries has led to a huge expansion in 

the number of solar generation plants there and Foresight 

believes there is still substantial capacity for growth in the size 

of the UK market. 

In addition solar benefits from the highest degree of public 

support for an energy technology with 82% in favour, 

compared to 66% for onshore wind farms and 74% for wave 

and tidal (DECC Public Attitudes Survey). 

The Department of Energy and Climate Change (DECC) 

has recently included Solar PV as a “key technology” in its 

Renewable Energy Roadmap, highlighting the recognition by 

government that solar has a significant role to play in enabling 

the UK to meet its renewable energy targets. Their analysis 

suggests a capacity of between 7GW and 20GW in 2020. This 

change is due to the progress that Solar PV has made in the 

UK in the last 18 months, in particular the cost of Solar Power 

Plants, which reduced by over 50% during the period. 

Solar Power Plants are particularly attractive for investors 

because the government supported revenue streams from 

projects under the Renewable Obligation (RO) scheme offer 

enhanced returns for 20 years and the technology involved is 

well-proven and reliable. 

Demand for Foresight Solar EIS Fund 2 which opened in 

February 2013 exceeded the target size of £20m and was 

therefore extended and closed at a total of £30m. We are now 

launching Foresight Solar EIS Fund 3 to give investors access 

to our strong flow of solar power investment opportunities 

with the tax benefits of an EIS investment. We expect 2013/14 

to be the busiest yet in the UK solar market, following a 

strong Q1 which saw capacity increase by 350MW, with a large 

number of attractive projects in development and due to 

come on line over the next year (NPD Solar Buzz). 

This year’s offer follows the first wave of fundraising for 

Foresight’s Solar VCT and Foresight Solar EIS in 2010 and 

2011 respectively, which surpassed expectations. These funds 

bought four UK Solar Power Plants at a combined cost of circa 

£50m. After more than a year’s operation of above base case 

performance, these assets have recently been refinanced with 

an innovative bond issuance which has crystallised a 20% 

uplift in valuation and consequent increase in the funds’ NAV 

(NAV announcement by Foresight Solar VCT on 3 May 2013, 

which has a near identical holding as Foresight Solar EIS in the 

same four Solar Power Plants). As a result of this uplift both 

Foresight Solar VCT and Foresight Solar EIS investments are 

tracking well ahead of their target returns (correct at time of 

writing). 

Since establishing our solar power team in 2007, we have 

invested in Solar Power Plants with a total transaction value 

of more than £310 million and forecast generating capacity 

of 86 MW. This extensive in-house experience of sourcing 

opportunities, arranging bank finance and completing solar 

power investments means Foresight is well placed to capitalise 

on opportunities in the sector and provide access to attractive 

returns for investors. 

Recently the Feed-in Tariffs (FIT) that have supported utility 

scale Solar Power Plants have been reduced, making the 

Renewable Obligation scheme more attractive. Solar PV 

installations were historically small scale and expensive 

compared to other technologies and as such were supported 

by the Government’s FIT regime which was designed to 

support small scale low carbon electricity technologies. 

However, as the cost of solar reduced and the size of 

installations increased the government felt that the level of 

FIT support was overly generous for utility scale sites. As the 

solar sector has matured the Government has ended support 

for new utility scale Solar Power Plants under the FIT regime, 

which continues to support small scale solar installations. 

Utility scale Solar Power Plants are now better supported 

under the RO Scheme, which is the Government’s main 

financial mechanism to incentivise the deployment of large 

scale renewable energy generation. 

Foresight Solar EIS Fund 3 aims to enable individuals to invest 

in this maturing sector and to benefit from the enhanced 

revenue streams possible under the RO Scheme. In addition 

to income derived from selling the generated electricity, 

generation plants accredited under the RO Scheme receive 

20 years of income from the sale of Renewable Obligation 

Certificates, which substantially increases the Solar Power 

Plants’ returns. The Enterprise Investment Scheme is one 

of a very small number of tax-efficient investment schemes 

officially sanctioned by HM Revenue and Customs. Subject to 

your personal circumstances, you should be able to reclaim 

30% of sums invested from your Portfolio against your 

tax bill and your investment should be outside the scope 

of Inheritance Tax after two years. The EIS benefits are 

principally available on sums invested of up to £1,000,000 

per individual in any one tax year. Further details of the tax 

benefits are described on page 25. It is our intention that all 

of the monies invested by the Fund will be in UK EIS Qualifying 

Companies. 

I hope that you find this Information Memorandum clear 

and easy to understand. You can call us on 01732 471812 for 

more detail at any time. You must seek financial advice before 

you invest in the Fund. When you are ready to invest, you will 

find the Application Forms from page 39 onwards. 

Jamie Richards 

Head of Infrastructure 


03

SUMMARY OF TAX RELIEFS 

TAX TREATMENT WILL DEPEND ON INVESTORS’ INDIVIDUAL CIRCUMSTANCES AND ALL POTENTIAL 

INVESTORS SHOULD, THEREFORE, SEEK TAX AND FINANCIAL ADVICE BEFORE INVESTING. 

YOU MUST HOLD EACH INVESTMENT FOR A THREE YEAR PERIOD TO RETAIN THE EIS RELIEFS 

SUMMARISED BELOW. EIS RELIEFS ARE ONLY AVAILABLE ON YOUR INVESTMENT IN EIS 

QUALIFYING SHARES. 

YOU SHOULD SEEK ADVICE IN RELATION TO TAX RELIEFS. A MORE DETAILED EXPLANATION 

OF THE TAX RELIEFS AND EIS REQUIREMENTS ARE SET OUT IN PAGES 24 TO 25. 

Income tax relief 

Eligible Investors can reduce the amount of income tax 

they pay by 30% of the amount invested in EIS Qualifying 

Investments made through the Fund. As an example, if an 

Investor invests £100,000 in EIS qualifying Investments 

through the Fund, the Investor can reduce the amount of 

income tax paid by £30,000. This relief is available on the 

first £1,000,000 of EIS qualifying investments in each tax 

year. If an Investor invests more than £1,000,000 through the 

Fund in any tax year, the reduction in their income tax bill for 

that year will be £300,000. The amount of income tax relief 

claimed cannot exceed that which an eligible Investor is 

due to pay. 

Eligible Investors can claim the relief against their income 

tax liability in the tax year that Foresight makes each EIS 

qualifying Investment or such relief can be carried back for 

the preceding tax year to the extent the eligible Investor has 

not used their annual limit in the previous tax year. EIS income 

tax relief in respect of investments made in the 2013/2014 tax 

year may be carried back into the 2012/2013 tax year up to the 

annual limit of £1,000,000. 

Capital gains tax deferral relief 

Eligible Investors can defer capital gains up to the amount 

invested in Investments made through the Fund. This 

applies to gains made in the three years before the effective 

date (see timing below) and future gains made up to one 

year after the effective date. Gains are deferred until the 

Investor sells their EIS qualifying Investments that Foresight 

has made for them through the Fund. Capital gains tax will 

apply to the deferred gain at the rate in force when the 

Investments are sold. 

Capital gains tax exemption 

Any capital gains realised on a disposal of Investments made 

through the Fund after the Three Year Period, and on which 

EIS relief has been given and not withdrawn, will be capital 

gains tax free. Any capital gains realised on a disposal within 

the Three Year Period will be subject to capital gains tax, at 

the current rate which is either 18% or 28% for individuals 

(the tax rate used depends on the total amount of the 

individual’s taxable income). 

Inheritance tax relief 

Once an Investment made through the Fund has been held 

for two years, eligible Investors should qualify for 100% 

Business Property Relief. This means that an Investment will 

be an exempt asset for IHT purposes, provided the Investment 

is held at date of death. 

Business Investment Relief 

The Finance Act 2012 includes provisions whereby nondomiciled 

residents can use untaxed overseas income or gains 

to invest in the UK in qualifying investments without making a 

04 FORESIGHT SOLAR EIS FUND 3 

taxable remittance under the Business Investment Relief (BIR) 

scheme. This major new relief offers non domiciled residents 

who have foreign income or gains that would be taxable on 

the remittance basis if brought to the UK a major opportunity 

to make commercial investments in the UK, into qualifying 

investments. 

Amounts remitted to the UK must be invested within 45 days 

of being brought to the UK. If the investment is aborted after 

funds have been brought to the UK, then no UK tax charge will 

arise providing the funds are taken overseas within 45 days of 

the day that they originally came to the UK. 

On the disposal of a qualifying investment the investor has 45 

days from the date of receipt of the proceeds to take overseas 

the proceeds or to make another qualifying investment. 

Special rules apply where the investment is part sold or 

proceeds are below cost. EIS Qualifying Companies in which 

Foresight Solar EIS Fund 3 invests will be eligible companies 

for BIR and the Receiving Agent has an offshore bank account 

to hold such cash. If you are non-domiciled and wish to invest 

using BIR, please contact Foresight’s Sales team on 01732 

471812 for a bespoke application form. 

Timing 

EIS tax reliefs become available each time that Foresight 

makes an Investment in EIS Qualifying Companies. For 

example, if Foresight makes the first Investment in October 

2013 and commits 25% of the amount subscribed to the Fund 

to that Investment, then October 2013 is the effective date for 

working out the timing of eligible Investors’ tax relief on that 

Investment. Each Investee Company will issue EIS3 certificates 

as soon as practical following a period of trading of not less 

than four months, which will be sent to eligible Investors by 

Foresight for that Investment. These certificates provide the 

evidence required to claim income tax relief and capital gains 

tax deferral relief. Foresight would expect to send these EIS3 

certificates to Investors towards mid 2014. 

Foresight intends to fully invest the fund into EIS Qualifying 

Companies during Q4 2013 and no later than 5 April 2014 

Generally, the Fund Manager reserves the right to return 

uninvested funds if it concludes that the funds cannot be 

properly invested. 

Loss relief 

If any of the Investments were realised at a loss, Investors 

would be able to set the loss against their income and/or 

capital gains when calculating their liability to income tax and/ 

or CGT in the year of realisation. This means that an Investor’s 

maximum potential losses should not exceed 42% of their 

total Investment after taking the income tax and loss reliefs 

into account assuming that an Investor’s marginal rate of tax is 

40% (if an Investor’s marginal rate is 45%, then the maximum 

exposure would be even lower at 38.5%).

INVESTMENT OPPORTUNITY 

In order to promote low-carbon energy, the UK Government 

has established financial incentives to encourage the 

development of renewable energy. Foresight Solar EIS Fund 3 

aims to enable individuals to invest in this maturing sector and 

to benefit from the enhanced revenues possible under the 

Renewable Obligation Scheme (RO Scheme). In addition to income 

derived from selling the generated electricity, projects accredited 

under the RO Scheme receive income from the sale of Renewable 

Obligation Certificates (ROCs) which substantially increases the 

projects’ returns. 

Foresight believes that Solar Power Plants are particularly 

attractive for investors because the government supported 

FUND MANAGER 

The discretionary investment manager of the Investors’ 

Portfolios, which together comprise the Fund, will be Foresight, 

part of Foresight Group. Since establishing its solar power 

team in 2007, Foresight has invested in more than £310 million 

of operating Solar Power Plants in the UK, Italy and Spain, 

demonstrating its ability to source opportunities, arrange bank 

finance and complete investments. Foresight’s investment team 

currently manage a solar portfolio with a generating capacity 

of 86MW. 

Foresight’s team of 25 investment managers has been assembled 

gradually, allowing time to integrate their experience in 

renewable energy investing and operational management 

with Foresight’s proven strengths in private equity and EIS 

fund management. 

Foresight has been managing UK tax-efficient funds for more 

than 15 years. Since February 2013 Foresight raised a combined 

total of £36m for Foresight Solar EIS Fund 2 and Foresight Solar 

VCT “C” Shares to invest in the rapidly expanding UK solar sector. 

This followed the successful fund raising in 2010/11 for its first two 

UK focused solar funds which invested in four Solar Power Plants 

supported by the UK Government’s Feed-in Tariff scheme. In 

recent weeks, Foresight has successfully refinanced these assets, 

raising gross proceeds of £60 million of attractively priced, longterm 

debt by issuing a listed, index-linked bond. Two institutional 

investors, a UK pension fund and an insurance company, 

purchased the bond in full. This has resulted in an immediate 

INVESTMENT STRATEGY 

The Fund will invest in a portfolio of EIS Qualifying Companies 

that primarily will acquire Solar Power Plants (as defined on 

page 37) backed by the RO Scheme or any similar long-term 

revenue support mechanisms. Investee Companies will not 

generally incur risks related to applying for planning 

permission or other pre-construction risks, which will usually 

be the responsibility of the Fund’s development and 

construction partners. 

Foresight will seek to refinance and/or sell the Fund’s portfolio 

within three to four years to generate capital gains for Investors. 

Foresight also intends to enable those investors who wish to 

stay invested after four years, to do so (see page 8 for more 

information). 

revenue streams from projects under the RO Scheme offer 

enhanced returns for 20 years and the technology involved is 

well-proven and reliable. The RO Scheme also rewards solar 

electricity production above most other renewable sources, 

reflecting its higher capital cost and allowing for relative 

differences in energy yield. The rates of 2 ROCs / MWh for Solar 

Power Plants installed and accredited before 1st April 2013, 1.6 

ROCs / MWh (ground-mounted) for those installed and accredited 

between 1 April 2013 and 31 March 2014 or 1.4 ROCs/MWh 

(ground-mounted) for those installed and accredited between 1 

April 2014 and 31 March 2015 will support the Fund’s investment 

strategy. Whether the Fund invests in 1.4, 1.6 or 2.0 ROC projects 

should not affect returns to the Fund. 

capital uplift of c. 20% to the funds invested in the assets and is 

the largest bond of this type issued to date in the UK. The bond 

proceeds will be re-invested on behalf of the Foresight Solar EIS 

Fund and Foresight Solar VCT into additional UK ground-based 

solar power plants benefiting from the RO Scheme. As a result 

of the favourable differential between the yield on these new 

ROC based plants and the cost of the bond, investors in Foresight 

Solar EIS Fund and Foresight Solar VCT are expected to benefit 

from both higher dividends (or, in the case of those investors 

who selected the accumulator option, higher retained cash) and 

greater long-term capital appreciation. Initial expectations are for 

dividends to increase by 20% to 6p per share in 2013/14 and by 

40% to 7p per share by 2016/17. The two Funds will retain their 

share of the entire remaining equity interests in the original four 

Solar Power Plants. 

In 2012 Foresight was appointed by the Green Investment Bank 

to manage £50 million of an initial £80 million investment fund 

set aside by UK Government to invest in green infrastructure 

across the UK. Foresight Group is the manager of the best ever 

performing VCT (Foresight VCT plc original ordinary shares) 

which has returned in excess of £1.80 to investors since launch 

in 1997 and has received recognition from commentators and 

its peers, including awards for 2009 New Energy Investor of 

the Year, VCT of the Year at the 2010 Investor AllStars Awards 

and Equity Provider of the Year at the 2011 Renewable Energy 

Finance Forum Awards. Foresight has over 12,000 investors and 

assets under management of over £650 million. 

The Fund might seek to optimise its portfolio by inviting other 

funds to co-invest in the portfolio and by using third party debt as 

appropriate. Foresight believes that this approach will maximise 

value for Investors, on the basis that the sale of a larger portfolio 

is likely to be more attractive to potential acquirers and should 

therefore generate a premium value. 

Investments may be made in EIS Qualifying Companies seeking 

to generate renewable energy from other sources where the 

Fund Manager considers this to be in the best interests of 

Investors. The majority of assets to be invested in are expected to 

be in the UK, though the Fund may also invest in other countries. 

Pending investment or distribution, any uninvested funds may be 

held in cash, interest bearing securities or other investments. 


05

FORESIGHT’S KENT SOLAR PLANT AYLESFORD, KENT 5MW OPERATIONAL JULY 2011 

06 

FORESIGHT SOLAR EIS FUND 3

DEALFLOW 

Foresight has developed an attractive pipeline of solar 

investment opportunities through partnering relationships 

with developers and specialist construction firms, and from 

its network of contacts with property owners and professional 

advisers. The UK market for solar power is predicted to expand 

rapidly, with DECC estimations of between 7GW and 20GW by 

2020, although growth could be constrained by lack of finance 

for projects. As a provider of such finance, with a track record 

in the solar industry, Foresight believes that it is an attractive 

RETURNS 

partner for developers and operators having already 

worked effectively with such businesses in UK, Italy and 

Spain. Foresight has a pipeline of UK projects totalling 

over £650m, has secured or is in the process of securing 

exclusivity on 300 MW of Solar Power Plant capacity 

due to be commissioned in the next six months and is in 

negotiations with a number of developers and their 

advisers regarding further suitable projects. 

The Fund is designed to provide attractive returns to Investors by combining Income from Investee Companies, which 

will be rolled up in order to achieve capital gains tax treatment on sale of the Investments, with initial tax relief of 30% 

relief from inheritance tax plus the opportunity to defer CGT. 

Illustrative investment returns to eligible Investors 1 

Cost of Investment 100,000 

Less income tax relief (at 30%) (30,000) 

Net Investment 2 70,000 

Target investment proceeds assuming exit in three to four years 3 120,000 

Total return on Net Investment 71.4% 

Average Compound Annual Return 4 14.4% 

Average Equivalent Annual Return (on Net Investment, assuming 45% income tax rate) 5 26.2% 



Notes: 

1. We have assumed adviser commission applies for the illustrative investment returns table since these are the only terms where there is certainty. 

These terms assume tax relief of 100% on the amount invested, deduction of 5.5% initial charge and 0.5% trail per annum paid over 4 years. 

Differing terms to those assumed will alter the returns. Target Returns are quoted inclusive of all Foresight fees 

2. Assumes single investment of £100,000 in EIS Qualifying Companies applied against an Investor’s 2013/2014 income tax liability. 

3. Target proceeds (assuming all investment proceeds are realised by way of a sale of EIS qualifying Shares free of CGT) are shown net of all costs. Target 

proceeds are an illustration only and do not represent a forecast of returns. 

4. Returns are calculated over a four year period and Foresight is confident that it will be able to provide an exit within three to four years. 

5. Equivalent Annual Return is the compound return an investor would need to achieve from an equivalent investment (which attracts the relevant personal 

income tax rate) in order to achieve the same return as that projected. 

For Investors wishing to maximise capital growth and to realise 

their investment within four years, Foresight aims to deliver 

a capital return of 120p per £1 invested in the Fund within 

four years. If the planned level and timing of sale proceeds 

is achieved, then Investors benefiting from full EIS tax reliefs 

would achieve a tax-free cash profit of 71.4% of their net cost 

of investment which equates to an average compound annual 

return of 14.4%, or a gross average equivalent compound 

annual return of 24.0% per annum (assuming that the 

Investor’s marginal rate of income tax is 40%) or 26.2% per 

annum for Investors with a marginal rate of 45%. 

Interest earned on cash balances held in Portfolios will be 

added to the relevant Investor’s Portfolio. 

£ 


07

STAYING INVESTED 

Some Investors may wish to stay invested for the longer term to 

take advantage of the long-term returns of the Investee Companies. 

Each Investor is therefore invited to tell us whether he or she wishes 

to exit in years three to four or to stay invested for the longer term. 

Each Investor may select this option at any time up to a date to 

be notified to Investors by the Fund Manager. Selection may only 

be made in writing addressed to the Fund Manager. Any Investors 

considering staying invested should seek specialist independent tax 

and financial advice before making any such selection. 

CHARGES 

Initial Fundraising Charges 

To ensure Investors benefit from tax reliefs on the full 

amount invested, fundraising charges are payable by 

Investee Companies rather than by the Fund. The level 

of the fundraising charges payable to the Fund Manager 

reflects whether or not commission is payable to financial 

intemediaries. 

In certain limited situations, commission may be paid as described 

in more detail below: 

Fundraising Charge: 2.5% of Subscription 

(no commission payable) payable immediately. 

Fundraising Charge: 5.5% of Subscription payable 

(commission payable) immediately plus 0.5% pa of 

Subscription for 4 years payable annually. 

To ensure fairness between Investors different numbers of Shares 

will be issued to Investors to reflect the different charge levels that 

may be payable in relation to Subscriptions of individual Investors. 

Although the amount of the fundraising charges should not 

reduce the EIS Relief available to Investors the fundraising charges 

payable by an Investor will reduce the value of the Portfolio of 

that Investor. Foresight will pay the costs of establishing the 

Fund, including legal and taxation costs, the preparation of this 

Information Memorandum and any other direct expenses incurred 

Annual Fund Management Charges 

Foresight intends that Investors should benefit from tax reliefs 

on the full amount invested in the Fund. For this reason, the 

fund management charges described below (other than the 

performance incentive fee) are payable by Investee Companies 

rather than by the Fund by reference to the amount invested in 

that Investee Company. 

The fund management charges will accrue for all Investors 

from 31 August 2013, or subsequent date of Subscription 

if later, onwards and will be payable quarterly in advance, 

with the first payment being on the date of the investment 

in the relevant Investee Company. VAT will be added where 

applicable. 

Any fees and charges that are not paid by Investee Companies 

will be recouped from the proceeds of sale of Investments or 

dividends received. 

Annual management charge 1.75% of the value of 

the Portfolio. 

Secretarial charge 0.3% of the value of 

the Portfolio (subject to 

an RPI-linked minimum 

of £60,000 in aggregate). 


Foresight will manage the Investments with the aim of providing 

the necessary flexibility consistent with meeting each Investor’s 

preference to exit or remain invested for the longer term. Under 

certain circumstances, Foresight may be unable to meet the wishes 

of Investors to stay invested. For example, if the option to stay 

invested is exercised in respect of a relatively small proportion 

of the Fund, it may be impractical or uneconomic for the Fund to 

continue. Foresight may, therefore, decide to terminate the Fund 

and realise and distribute all Investments. 

Foresight will bear any legal, accounting and other fees 

incurred by the Fund in connection with potential Investments 

which do not proceed to completion and may retain for its own 

benefit any arrangement fees and directors’ or monitoring fees 

which it receives in connection with investments. 

Performance Incentive 

Foresight will be entitled to a performance incentive fee, 

payable from the proceeds of realising Investments. This 

fee, which will be deducted from realisation proceeds, is only 

payable once Investors have received proceeds of at least £1 

per £1 invested in investments. The performance incentive fee 

is calculated as 20% of proceeds to Investors in excess of £1 

per £1 invested until total proceeds reach 120p per £1 invested, 

and 30% thereafter. 

Adviser Charges 

As part of the new regulations introduced by the FCA (the Retail 

Distribution Review), authorised financial intemediary charges for 

advising on certain investment products are (in most situations) 

to be paid by the client directly rather than via commission from 

the product. This amount, for advice provided, is to be agreed by 

an Investor and his/her adviser (whether for initial advice and/or 

for ongoing management of the relationship between the Investor 

and the Fund Manager). An Investor may specify in the Application 

Form, the amount of any such charges (upfront and/or ongoing) 

he/she has agreed with his/her authorised financial intermediary 

in connection with Foresight Solar EIS Fund 3 and request that 

Foresight facilitate that payment. 

Any sums to be facilitated (upfront or ongoing) will be deducted 

from the Subscription. Accordingly only the net amount of the 

Subscription will be available to invest through the Fund and 

Investors will not obtain EIS Relief on the sums so facilitated. 

The amount of any ongoing charges to be facilitated by Foresight 

will be deposited in a bank account with Woodside Corporate 

Services Limited pending payment to advisers. 

Adviser Commission 

Authorised financial intermediaries may in certain situations be 

permitted to receive commission such as for execution only clients 

where no advice or personal recommendation has been given or 

for professional clients. In such permitted situations authorised 

financial intermediaries will be paid initial commission, usually at 

the rate of 3% of Subscriptions, plus annual trail commission at 

the rate of 0.5% of Subscriptions for a maximum of four years 

(inclusive of VAT). All commission will be paid from fundraising 

charges described above.

LIQUIDITY 

If Investors need to realise their Investments early, they will 

be able to offer their Investments for sale through Foresight 

at their most recent valuation. Foresight will endeavour to 

arrange for any Investments so offered to be bought by the 

Investee Companies, or acquired by other Foresight Group 

managed funds or other Investors. This does not imply any 

obligation on the part of any party to acquire Investments and 

there is no guarantee that Investments offered can be sold 

or that they can be sold at their most recent valuation. The 

disposal of an Investment before the end of the Three Year 

Period is likely to result in a loss or clawback of EIS Relief and 

crystallisation of any Capital Gains Tax Deferral Relief. 

As the Investments will be in unquoted companies, there will 

be no readily available market for the Investments. As a result, 

the most likely mechanism for realising Investments is through 

a realisation process implemented by Foresight. Foresight will 

consider options for making realisations and returning funds 

to Investors (subject to individual options to stay invested) 

FUND STRUCTURE 

The Fund comprises a number of discretionary managed 

Portfolios, which are managed on behalf of individual 

Investors in accordance with the investment objectives and 

restrictions set out in Schedule 1 of the Investor’s Agreement. 

The Investor’s Agreement is made between each Investor 

and Foresight (on behalf of itself and the Administrator and 

the Nominee) on the terms set out in Appendix 2 to this 

Information Memorandum. Foresight will be responsible for 

the discretionary management of Portfolios but each Investor, 

for legal and tax purposes, will be the beneficial owner of a 

specific number of Shares in each Investee Company, the 

aggregate of which, together with cash held on behalf of 

the Investor, comprise his or her Portfolio. The combined 

Portfolios comprise the Fund, which is as an unapproved 

EIS fund. The Nominee will be the registered holder of all 

Investments of the Fund. 

The Fund is not a collective investment scheme within the 

meaning of section 235 of the Financial Services and Markets 

Act 2000 by virtue of it being a fund complying within the 

meaning of Article 2 of the Schedule to the Financial Services 

and Markets Act 2000 (Collective Investment Schemes) Order 

2001 and, pursuant to clause 15.2 of the Investor’s Agreement, 

Investors are entitled only to the withdrawal rights prescribed 

by that clause. 

HOW TO INVEST 

Please read the Investor’s Agreement and complete the 

Application Form, both of which are included in this document. 

Potential Investors can apply to participate in the Fund in 

respect of any amount from £10,000 upwards, subject to the 

amount being a multiple of £1,000. 

Please send the completed Application Form, together with 

the Adviser Certificate and cheque (or confirmation of Direct 

in relation to each Investment after the Three Year Period. 

However, the timescale for realising Investments may be 

longer than the end of the Three Year Period. 

By the end of the Three Year Period, the Investee Companies 

should have established revenue streams supported by 

an established track record. The revenue forecasts for the 

Investee Companies should also be relatively predictable and 

will be underpinned by warranties from counterparties. As 

such, Foresight believes that the remaining income streams 

generated by the Investee Companies will be attractive to 

institutional investors or other Foresight Group managed 

funds and that either sales or refinancing of the Investee 

Companies would enable funds to be returned to Investors. 

As above, this does not imply any obligation on any party 

to acquire Investments and there is no guarantee that 

Investments offered for sale can be sold or that they can be 

sold at their most recent valuation. The proceeds of sale of 

Investments will be returned to Investors and not reinvested. 

Investors in the Fund will make Investments together 

and their Investments will be managed by Foresight on a 

common basis. The Fund will, therefore, constitute a collective 

investment undertaking within the meaning of the Markets 

in Financial Instruments Directive (MiFiD) and, by virtue of 

the exemption for collective investment undertakings in 

Article 2.1(h) of MiFiD, the Fund falls outside the remit 

of MiFiD. 

All Investors in the Fund will be categorised by Foresight as 

retail clients unless otherwise agreed by Foresight and the 

Investor, and their Applications will, therefore, be subject 

to their financial adviser certifying that participation in the 

Fund meets their objectives, that they have the expertise, 

experience and knowledge to understand the risks and 

that they are able to bear the associated risk involved in 

participating in the Fund. Investors who do not have financial 

advisers who will provide this confirmation will not be able to 

participate in the Fund. 

The Fund Manager is covered by the Financial Services 

Compensation Scheme. An Investor may be entitled to 

compensation from the scheme if the Fund Manager cannot 

meet its obligations, as described in greater detail in the 

Investor’s Agreement. 

Transfer) payable to ”The City Partnership-Foresight SE3”, by 

post to the Receiving Agent. Foresight will notify applicants 

if his or her application is accepted and such acceptance 

will create a binding agreement between the Investor and 

Foresight (for itself and the Administrator and the Nominee) 

on the terms of the Investor’s Agreement. 


09

WHAT HAPPENS AFTER INVESTING 

CLAIMING TAX RELIEFS 


1. Day 1: Investor submits application form 

2. Within 7 days: letter of acknowledgement by post to adviser and investor 

3. From date applications received and cleared up to 5 April 2014: Investments in Solar 

Power Plants. Contract notes sent to investors within five business days of investment 

4. From 5 April 2014: EIS3 Forms distributed. When the manager has invested in an EIS 

Company, and the Company has been trading for four months, the Company makes an EIS 

application to HMRC. Upon receipt of HMRC clearance the EIS Company sends EIS3 forms 

to each investor in respect of that investment, to be used to claim tax relief 

5. From April 2014 and every 6 months: Investors will be sent half-yearly reports by post, 

or electronically if so requested, updating them on the Fund. These will be sent in June and 

December, reporting on 6 months to 31 March and 6 months to 30 September respectively. 

Investors may request 3 monthly reports by contacting the Fund Manager in writing 

6. October 2017: Exit or Stay Invested. Based on exit opportunities after the qualifying 

period, investors should be able to exit or retain their holdings. 

* Please note that this diagram is indicative only of Foresight’s intention and is not a guarantee of future events. 

Income Tax Relief: Once you have received your EIS3 Form, you 

should enter the amount invested on your tax return for the year 

you are entitled to claim the income tax relief at 30%. If you have 

already submitted your tax return, complete the claim section on 

the EIS3 Form and send it to your tax office. 

NB: You will receive one EIS3 Form per EIS Company and these 

will arrive separately (i.e. you will not receive one EIS3 Form for 

the entire investment, but one EIS3 Form for each EIS Company 

invested in). 

Capital Gains Tax Deferral Relief: Complete the relevant claim 

section of the EIS3 Form and send to your tax office if the 

tax return detailing the gain to be deferred has already been 

submitted.

INTRODUCTION TO SOLAR POWER INVESTING 

Enough solar energy reaches the earth every hour to meet 

the world’s energy consumption for a whole year. The 

technology to harness some of this energy in the form of 

electricity is now tried and tested. Although it is generally a 

more expensive way to generate electricity than the burning 

of fossil fuels, solar power technology enjoys the support of 

government financial incentives as part of the UK Government’s 

drive to reduce greenhouse gas emissions by building 

renewable energy generating capacity. 

The European Union decided many years ago to promote 

renewable energy as part of the response to climate change. 

Over the last ten years, Germany, Spain and Italy among others 

have demonstrated how massive private sector investment in 

renewable energy can be unleashed by long term government 

support schemes. In the UK, the Renewable Obligation (as 

further detailed on page 13) has been adopted as the main 

mechanism for supporting the uptake of large-scale renewable 

electricity generation. It obliges electricity suppliers to source 

an increasing proportion of the electricity that they supply to 

customers from renewable sources and provides an additional 

income stream to renewable generators. The RO Scheme, 

thereby provides revenue support for electricity generated 

by qualifying Solar Power Plants. 

Foresight believes that solar power generation supported by 

the RO Scheme is attractive for investors in a time of economic 

uncertainty and austerity in government spending. While the 

level of government support has been reduced following the 

Renewable Obligation Banding Review (as further detailed on 

page 14), this follows years of substantial reductions in the 

cost of solar panels and, therefore, still allows for an attractive 

margin to be made by UK solar generators under the scheme. 

The UK Government has committed to ensure that 15% of all 

of the UK’s energy needs are met from renewable sources by 

2020 and this commitment implies a need for investment of an 

estimated £110 billion, part of which is expected to be directed 

to solar power. 

Having invested in solar power installations in Spain 

and Italy over the last five years, and with £50 million 

invested in UK Solar Power Plants, Foresight understands the 

exciting opportunities that government support can unlock 

for private investors. Foresight has strong relationships with 

developers, banks and other key counterparties and has a 

growing pipeline of investment opportunities. With a five year 

track record in solar power investing and an in-house team 

of experts in project finance, procurement and operations, 

Foresight intends to play a leading role in opening the solar 

power opportunity to private investors. 

Many people are aware of solar power, but have questions 

about how it works, whether it is efficient and how it can be 

used by investors to generate a profit. This introduction to 

solar power investing is intended to answer some of the 

more common questions. 

What is solar power? 

The building blocks of a solar power generator are 

photovoltaic cells, which convert light into electricity. 

They are typically made from layers of semiconducting 

material, usually silicon. Packaging a number of these 

photovoltaic cells into a frame, with a sheet of glass on the 

front to protect the layers of semiconducting material from 

weather and physical damage, creates a solar panel. A typical 

photovoltaic Solar Power Plant will comprise a number of 

solar panels connected together and linked to an inverter, 

an electrical device that converts the direct current (DC) 

generated by the panels into alternating current (AC), the 

form of electricity supplied through the mains electricity 

network. Panels may be mounted on rooftops or on the 

ground, and may be fixed or set to track the sun. Large 

numbers of photovoltaic systems have already been installed 

globally. Systems of this type are the main focus for the Fund 

and are referred to in this document as “Solar Power Plants”. 

Solar Panel Photovoltaic Cell 

anti-reflective coating 

silicon layers 

metal conductor strips 

metal backing 

What about watts? 

In order to calculate the potential revenue that a Solar Power 

Plant can generate, it is necessary to know both the value of 

each unit of electricity and the number of units that can be 

expected to be generated each year (known as the “annual 

output” which is measured in “kilowatt-hours (kWh)”). Annual 

output is a function of a Solar Power Plant’s peak capacity 

(measured in “kilowatts peak (kWp)”), the amount of solar 

energy reaching its panel(s), and a performance factor that 

allows for the alignment of the panels in relation to the sun, 

as well as the temperature and other factors. 

In the UK the average solar panel system generates an annual 

output of 850 kWh per 1kW rated system. For a typical 5MW 

installation this means around 4,250MW per year. Capacity is 

related to the physical size of the panels and the efficiency with 

which they convert solar energy into electricity. Efficiency is 

typically guaranteed by the panel manufacturer. Annual output 

is forecasted using meteorological data for average monthly 

sunlight levels for different geographical areas, allowing 

for weather and the number of daylight hours. Foresight’s 

experience suggests that estimates properly based on this 

data are reliable. 

(A megawatt (MW) = 1,000 kilowatts (kW); a gigawatt (GW) = 

1,000,000 kilowatts (kW) while 1MW is sufficient to power 1000 

homes in the UK.) 


11

AN INTRODUCTION TO SOLAR POWER INVESTING 

Insolation – solar energy reaching the UK 

Units are kilowatt-hours per m 2 per year 

900 

Vital statistics for some examples of PV Solar Systems: 

1200 

1000 

Source: Design of Feed-in Tariffs for Sub-5MW Electricity in Great Britain, quantitative analysis prepared for Department for Energy 

and Climate Change, July 2009 


Foresight backed Solar Power Plants = 16MW 

1100 

Capacity Output in kilowatt-hours annually* 

in kW peak UK Italy Spain 

Ground-mounted 10,000 10,100,000 15,700,000 14,300,000 

*Based on data from the Photovoltaic Geographical Information System (“PV GIS”) for London, Brindisi 

(Italy) and Toledo (Spain)

Is the equipment reliable? 

Solar Power Plants have few moving parts and operate over 

long periods with minimal maintenance. The Department of 

Energy and Climate Change (DECC) has stated that “PV is 

easier to deploy than other technologies and carries less risk 

to the investor since it is a tried and tested technology”. The 

EU Energy Institute has described solar panels as a good long 

term investment, capable of performing well after thirty years 

of life. The reliability of Solar Power Systems is increasing 

with the development of modern technology, and their 

performance will only improve over time. 

The majority of solar panel manufacturers guarantee the 

efficiency of their equipment for long periods. They typically 

guarantee an 80% performance rate for 20-25 years and a 

90% performance rate for 10-12 years. Solar Power Plants 

owned by Investee Companies will generally be installed and 

maintained by specialist contractors, who may also provide 

guarantees to supplement the core equipment guarantees. 

Such guarantees and contracts are of course subject to 

normal commercial limitations. 

Why is solar power interesting now? 

Foresight believes that Solar Power Plants accredited under 

the RO Scheme offer attractive returns to Investors. The UK 

market has grown significantly in recent years, surpassing 

1GW of capacity in early 2012, and this growth is expected to 

continue, with DECC forecasts estimating that there will be 

between 7GW and 20GW of solar power installed in the UK by 

2020. Solar technology has now established itself in the UK, 

with Solar Power Plants developing solid track records. The 

supply chain has grown in line with the increase in capacity 

and many reputable suppliers and contractors now operate 

in the UK. 

Solar panel prices have reduced substantially over the 

past 2 years with a 50% reduction between summer 2011 

Output figures 

Generators 

Source: www.decc.gov.uk 

1 

2 

Issues ROCs 

for output 


and March 2012. The RO Scheme is a market based incentive 

so it does not expose investors to government spending 

decisions. Furthermore, the scheme is designed with a 

headroom mechanism, to ensure the value of ROCs 

remains stable. 

Government driven revenue support schemes introduced in 

FORESIGHT SOLAR EIS FUND 

Germany, Spain and Italy a number of years ago stimulated 

major investment in the sector. Foresight has been investing in 

Solar Power Plants in Italy and Spain since 2008 and believes 

that the support under the RO Scheme will drive a wave of 

investment from which the Fund can benefit. 

The Renewable Obligation Scheme 

The Renewable Obligation (RO) is the main financial 

mechanism supporting the uptake of large-scale renewable 

electricity generation in the UK. It came into force in April 

2002 and requires energy suppliers to source a specified 

proportion of the electricity that they supply to their 

customers from renewable sources. This proportion is set 

to increase annually until 2037 as determined by the 

Department of Energy and Climate Change (DECC). 

The RO works on the basis of Renewable Obligation 

Certificates (ROCs). ROCs are issued to renewable energy 

generators based on the amount of eligible renewable 

electricity they generate. These ROCs can then be sold to 

licensed UK electricity suppliers alongside the electricity 

they produce. A supplier meets its obligations under the 

RO by submitting ROCs (bought from generators) or by 

paying a penalty to Ofgem (known as the “buy-out” price), 

or a combination of the two. The payment that a renewable 

generator receives for ROCs subsidises the additional costs 

incurred by generating electricity from renewable energy 

sources rather than fossil fuels and nuclear. Electricity 

suppliers pass the additional cost of buying ROCs on to 

their customers. 

3 

Sell ROCs 

4 

Present ROCs 

and/or 

buy-out to 

fulfil Obligation 

Suppliers 


13 

13


The amount of ROCs issued to generators depends on 

the amount of energy they generate. Originally, one 

ROC was issued for each megawatt hour (MWh) of 

eligible renewable output generated. Since April 2009, the 

number of ROCs given for each MWh of eligible renewable 

electricity generated varies according to the type of 

renewable energy source. This is known as ‘banding’, which 

was introduced with the aim of providing more targeted 

levels of support to different renewable technologies, 

reflecting differences in costs and market readiness. 

The UK Government decided to fix the banding rates 

for different technologies from 2009 to 2013 to provide 

certainty for generators. Until the end of March 2013, 

solar PV was entitled to 2 ROCs per MWh of electricity 

generated. New (lower) banding rates took effect on 1 April 

2013 with ground-mounted solar PVs receiving 1.6 ROCs 

in 2013/14 (reducing to 1.2 ROCs by 2016/17). Legislation 

enables the UK Government to review banding levels on a 

four-yearly basis with interim reviews, if required, carried 

out through government consultations. 

Historic ROC buyout prices 

Obligation period 

(1st April - 31st March) 

Source: Ofgem 


Buy-out price 

2002 - 2003 £30.00 

2003 - 2004 £30.51 

2004 - 2005 £31.39 

2005 - 2006 £32.33 

2006 - 2007 £33.24 

2007 - 2008 £34.30 

2008 - 2009 £35.76 

2009 - 2010 £37.19 

2010 - 2011 £36.99 

2011 - 2012 £38.69 

2012 - 2013 £40.71 

2013 - 2014 £42.02 

When an alteration to the banding levels is applied to new 

generating stations, existing generating stations accredited 

before that date remain subject to their initial level of 

support. The government’s “grandfathering” policy ensures 

that generating stations receive the same, fixed level of 

support (i.e. number of ROCs) for the full lifetime of their 

eligibility under the RO (20 years from when they are 

first accredited). 

If suppliers don’t purchase sufficient ROCs from renewable 

generators to meet their obligations, they have to pay a 

penalty of an equivalent amount into a “buy-out fund”. 

All buy-out payments in the fund are recycled back to 

the suppliers who were able to meet their obligations, in 

proportion to the number of ROCs they hold. Suppliers 

who did not submit any ROCs will not receive any 

proportion of the buy-out fund. The “buyout fund” 

therefore acts as a financial incentive to suppliers to 

source their energy from renewable generators The ROC 

buyout fee is fixed each year by DECC. Buyout prices to 

date are indicated below. As the Buyout Price has been 

increased in line with RPI the revenues received by Solar 

Power Plants are inflation linked. However, this fixed target 

figure can be superseded by a headroom calculation if the 

predicted level of ROCs that will be available turns out to 

be higher than initially estimated. When this is the case, the 

higher of the fixed target or the headroom figure is used to 

determine the level of the RO and calculate the number of 

ROCs that need to be submitted. The headroom calculation 

works by providing a set margin (10%) between the 

predicted generation of electricity from renewable sources 

(the supply of ROCs) and the level of the RO (demand for 

ROCs). The headroom mechanism helps to reduce the 

likelihood that renewables generation will exceed the RO in 

any given year, the result of which would be a reduction in 

the value of ROCs. 

So, although the pricing mechanism might appear 

complicated to explain, the reality is that it has created a 

stable platform for the past 10 years and the UK Government 

remains fully committed to it as a key component of their 

carbon reduction commitment. 

Electricity Market Reform and the 2012 Energy Bill 

In July 2011 the UK Government’s Electricity Market Reform 

was outlined in “Planning Our Electric Future: A White Paper 

for Secure, Affordable and Low-Carbon Electricity”. The 

package of measures outlined are intended to stimulate 

£110 billion to be invested by 2020 to replace ageing energy 

infrastructure and drive the decarbonisation of the energy 

sector while maintaining security of supply and affordability 

for consumers. 

Following over a year of pre-legislative consultation, on 

29 November 2012, the Energy Bill was introduced to 

Parliament. The primary measures introduced were:

• Feed-in Tariffs (FIT) with Contracts for Difference (CFD) 

intended to stabilise revenues for investors in low-carbon 

electricity generation projects that will in time replace the 

RO Scheme. 

• A Capacity Mechanism to support investment in base load 

generation capacity. 

• Emissions Performance Standards to restrict the use of 

the most polluting power stations. 

• A Carbon Floor Price to support the European Emissions 

Trading Scheme. 

While the proposals have not yet been passed into law and 

there are still some areas that lack clarity, the Government 

has indicated how it intends the transition from the current 

RO Scheme to FIT with CFD to work so as to avoid a hiatus 

in investment. However, these developments should begin 

after the investment period of the Fund during which all 

generation will be under the RO Scheme. The FIT with CFD 

will be available from April 2014 while the RO Scheme will be 

open for new generation plants commissioned until 31 March 

2017. This means that there will be over three years during 

which generators can choose between the two schemes. 

From 31 March 2017 the RO Scheme will be closed to new 

generation but all generation accredited before that date 

will be “grandfathered”, continuing to receive the level of 

support set at commissioning for the full agreed 20 years, 

meaning the scheme will close in 2037. 

Is solar power economic, particularly in the UK? 

The long-term income supported by the RO Scheme is 

intended to provide an attractive return on investment after 

taking into account the system cost, sunlight available and 

other factors which vary by location. There are potentially 

attractive economic returns to owners of Solar Power Plants 

that are properly installed in appropriate locations. 

How big is the market opportunity? 

The UK Government has committed to ambitious targets to 

decarbonise the UK economy and increase the proportion of 

energy generation provided by renewable sources. Installed 

solar PV capacity in the UK has grown to 2 GW at the start of 

2013, 8 times the capacity in July 2011. This market growth is 

expected to continue, with the DECC forecasting that there 

will be between 7GW and 20GW of solar power installed in 

the UK by 2020. 

How long will it take to get the Fund invested? 

Foresight has a healthy pipeline totalling over £650 million 

of potential investments in May 2013 and intends to invest 

monies received on or before the closing date by 5 April 

2014. Foresight may, at its discretion, extend the investment 

period by up to 12 months if the Fund is not fully invested by 

5 April 2014. 

How does Foresight source investments? 

Foresight sources solar investment opportunities through 

operators and developers and from its network of contacts 

with property owners and professional advisers. As a 

provider of such finance, with a strong track record in the 


European solar industry, Foresight can be an attractive 

partner for such businesses. 

What returns can be expected from the portfolio? 

Foresight aims to achieve returns sufficient to exceed the 

target for total return of 120p per £1 invested over three to 

four years. In order to achieve these returns, Foresight will 

focus on three key aspects of the selection and management 

of Solar Power Plants: 

Minimising system cost – one of the main determinants 

of returns is the installed cost of Solar Power Plants, the 

key element of which is photovoltaic panel cost, which has 

fallen significantly over recent years. The Fund will seek to 

minimise installed cost, subject to obtaining appropriate 

guaranteed quality. 

Selecting locations – Foresight expects returns to be 

higher for a Solar Power Plant located in an area with 

more solar radiation than the UK average, for example in 

southern England. 

Leverage and realisation – returns can be boosted by 

leveraging the Fund’s investments with third-party debt and by 

selling assets at the end of the planned exit period to buyers 

willing to accept a lower future yield on the investment. 

Foresight has secured significant levels of debt finance for 

solar power investments during and since the credit crisis 

and has wide experience of realising investments. Returns 

from the Fund’s portfolio will also depend on a number of 

other factors, including the timing of deployment of the funds 

raised and the level of UK inflation. 

How can the Fund realise investments? 

Foresight believes that operational solar power assets will 

be attractive to utilities, pension funds, insurance companies 

and other investors and will be readily marketable within 

the planned exit timeframe. Indeed there have already been 

examples of such activity and a developing secondary market 

over the past twelve months. Refinancing potentially offers 

an alternative route to liquidating part of the portfolio ahead 

of exits. 

What competition will Foresight face? 

Foresight has demonstrated its ability to compete successfully 

in the UK solar sector, securing the acquisition of four high 

quality projects commissioned at the highest historic rate of 

government support for Solar Power Plants under the Feed 

in Tariff (FIT) scheme and against tight deadlines driven by 

changes to subsidy levels. The investment team also has a 

strong track record in Italy and Spain and believes that its 

in-house sector expertise and entrepreneurial approach 

provide a powerful competitive advantage. 

A variety of other equity and debt providers are, or will, 

become active in the UK, Italy and Spain and may compete 

to provide finance. Equity finance for the installation of Solar 

Power Plants may be provided by the owner or occupier of 

land, by a utility or by the installer or even the equipment 

manufacturer. However, Foresight’s strong relationships in 

the UK market and record of closing deals, places it at an 

advantage to many competitors in the market. 


15


Will the opportunity be affected by cuts in 

Government spending? 

The long-term revenue support provided by the RO Scheme 

is not paid by the UK Government. Instead, legislation 

requires the major electricity suppliers to pay the prices 

directly to owners of Solar Power Plants. The costs are spread 

among all licensed electricity suppliers, and may be passed 

on to consumers as part of the normal bill for electricity 

consumption. However, the Government has reasserted its 

commitment to renewable energy in general and solar in 

particular in the recently published draft Energy Bill and 

Renewable Energy Roadmap. The recent agreement on the 

Levy Control Framework will allow the spend on Low Carbon 

electricity to triple in real terms from £2.35 billion in 2012/13 

to £7.6 billion in real terms in 2020/21. 

What if there are continued macro-economic difficulties? 

In Foresight’s view, the drivers of solar power investment are 

not related to general economic trends. The financial case 

for investment is based on the commitment of the EU to 

renewable energy, reflected in legally binding EU Directives 

under which the UK has committed to source 15% of all energy 

from renewable sources by 2020. This target implies that new 

investment of around £110 billion will be required in the UK 

alone, some of which is expected to be directed to solar power. 


If some of the investments will be outside the UK, is there 

a currency risk? 

There is no current intention to invest in Solar Power Plants 

outside of the UK. However, Foresight has been able fully 

to hedge the currency exposure of the capital cost for all 

its solar power investments made by sterling denominated 

funds in assets outside the UK. Likewise, it would expect to 

do so for any such investments funded by the Fund in order 

to protect investors from currency movements against the 

pound sterling. For UK investments, depreciation of the 

pound sterling against the US dollar or the Euro would tend 

to increase equipment prices, potentially reducing the returns 

from investments made after such depreciation. 

Is planning permission a problem? 

Ground-mounted installations usually require planning 

permission, but Foresight expects planning authorities to be 

supportive in this regard, on the basis that Solar Power Plants 

are likely to have less visual and other impact on the local 

environment than other renewable energy technologies (with 

the possible exception of ground source heat pumps which 

may also have little visual impact). Risks relating to planning 

consents would generally be borne by the developers and are 

not something to which it is expected Investors in Foresight 

Solar EIS Fund 3 would be directly exposed.


FORESIGHT’S KENT SOLAR PLANT AYLESFORD, KENT 5MW OPERATIONAL JULY 2011 

FORESIGHT SOLAR EIS FUND3 

17

INVESTMENT TEAM 

FORESIGHT HAS BUILT A HIGHLY-EXPERIENCED TEAM OF 25 INVESTMENT MANAGERS WITH A FOCUS 

ON THE ENVIRONMENTAL AND RENEWABLE ENERGY SECTORS. SUPPORTED BY OTHER FORESIGHT 

PARTNERS, THIS TEAM INVESTED IN SOLAR POWER PLANTS WITH A TOTAL VALUE OF MORE THAN 

£310 MILLION BETWEEN 2007 AND 2012. 


Jamie Richards 

Partner & Head of Infrastructure 

Jamie has led Foresight’s solar 

energy team since inception in 2007. 

He has played a key role in creating 

Foresight’s network of lenders, 

advisers, installation contractors and 

asset owners. Jamie is a chartered 

accountant with 17 years’ experience 

across fund management, banking 

and asset financing and has worked at 

PricewaterhouseCoopers, Citigroup 

and Macquarie. 

~ 

Ricardo Pineiro 

Senior Investment Manager 

Ricardo joined Foresight from Espirito 

Santo Investment, where he spent three 

years in the project finance division as an 

assistant manager with a special focus 

on transport, energy, oil and gas. He has 

strong experience of structuring, financial 

modelling and due diligence analysis of 

transactions as well as credit and debt 

facilities management. Prior to Espirito 

Santo he worked as a business analyst 

in the corporate finance division of a 

Portuguese investment bank in Lisbon. 

Ricardo is primarily focused on UK Solar 

and has executed £50 million of UK Solar 

transactions to date. 

Matt Black 

Investment Analyst 

Matt joined Foresight from Imperial 

College, London where he was a Research 

Associate focusing on the financing of 

UK renewable energy and electricity 

infrastructure. He previously spent over 

4 years at Credit Suisse working as an 

Investment Manager and structuring 

funds and SPVs. He is IMC qualified and 

holds an MSc in Environmental Technology 

and Energy Policy from Imperial 

College, London. 

Pietro Zerauschek 

Partner 

Pietro is responsible for leading the US 

Solar programme having previously managed 

Foresight’s Italian office. He is a qualified 

mechanical engineer with over 15 years’ 

engineering experience and has been providing 

technical advisory and engineering services for 

the financing, construction and operation of 

solar energy projects for five years. He is a 

director of the project companies for all 

Foresight’s existing Italian and Spanish 

solar assets. 

Dan Wells 

Director 

Dan joined Foresight with 12 years’ 

experience in finance and investment, 

specialising in sustainability and clean 

energy infrastructure. Prior to Foresight 

Dan ran the global corporate finance team 

at Sindicatum Sustainable Resources in 

Singapore, where he helped raise and invest 

USD 300 million in clean energy. Dan is a 

chartered accountant and from 2000 to 

2007, worked for Ernst & Young advising 

businesses and government agencies on 

environmental finance and green 

investment issues. 

Arnoud Klaren 

Portfolio Manager & Technical Director 

Arnoud joined Foresight from SolFocus, where 

he spent four years managing solar projects 

based on Concentrated Photovoltaics, an 

innovative solar technology. He was responsible 

for the construction and start-up of pioneering 

CPV projects in Spain, Saudi Arabia and 

Greece. Prior to SolFocus Arnoud founded and 

managed ThinkSpectrally, a spin-off company 

of the University of Valencia in Spain, dedicated 

to Quality Assurance in the PV manufacturing 

process, among other areas. Arnoud holds a 

Master of Science in Electrical Engineering.

Federico Giannandrea 

Partner 

Federico trained as a lawyer with 

Allen & Overy in Rome before joining 

Deutsche Bank, London in 2005. There 

he was involved in the acquisition of solar 

and other renewable energy assets in 

Poland, Spain, Greece, Belgium and Italy, 

structuring and negotiating key elements 

of a portfolio with electricity generating 

capacity of 2GW. As a vice-president within 

the renewable energy team, Federico led 

the project financing and installation 

contracting for an 8MW Solar Power 

Plant project in southern Italy and 

was involved in several other solar 

and wind power projects. 

Diomidis Dorkofikis 

Senior Investment Manager 

Diomidis gained a degree in Industrial 

Management & Technology and 

a masters degree in corporate finance 

before joining Millennium Bank, Athens as 

a project finance analyst. At Millennium 

Bank he specialised in renewable energy 

and other infrastructure and property 

investments and was involved in the sale 

of two wind power projects with capacity 

of 48MW and in the appraisal of a solar 

power project. He joined Foresight’s Rome 

office in September 2009. 

Simona Befani 

Portfolio Manager 

Simona joined Foresight with five years’ 

experience in renewable energy gained 

at international law firms where she worked 

on infrastructure and renewable project 

financing deals. Admitted to the Italian Bar 

association in 2010, at Foresight Simona 

takes responsibility for managing the Italian 

solar portfolio and arranging and structuring 

relevant financing. Fluent in English as well 

as Italian, Simona is based in Foresight’s 

Italian office. 

Carlos Rey Micolau 

Portfolio Manager & Technical Director 

Carlos is a graduate in Industrial Engineering 

from UPC Barcelona and has worked as 

an energy and technical consultant in the 

International Renewable Energy Market, 

specialising in energy projects in Spanish 

Portuguese and Italian markets. At Foresight 

Carlos’s responsibility is to lead the technical 

operations for all assets under management 

whether new construction or fully 

operational. Based in the UK, Carlos is fluent 

in Spanish, Catalan, Italian and English. 

Ivo O. Pitanguy 

Inestment Analyst 

SENIOR PARTNERS 

INVESTMENT TEAM 

Ivo joined Foresight having graduated in 

Economics from the University of California, 

San Diego. Before joining Foresight, Ivo worked 

in a finance rotation program at Banco Prosper 

in Rio de Janeiro, Brazil, where he worked in 

Research and Trading. Ivo is fluent in Portuguese, 

English, and Italian. 

Three further partners of Foresight will play important 

roles in relation to the Fund. Bernard Fairman and David 

Hughes are members of Foresight’s investment committee, 

whilst Gary Fraser heads Foresight’s finance and 

administration department. 

Bernard Fairman 

Chairman of Foresight Group 

Bernard has over 25 years’ investment 

experience. With a degree in economics from 

Nottingham University, he joined Panmure 

Gordon as an oil investment analyst, then moved 

to Edward Bates, a specialist City investment 

bank. He then worked with several small 

electronics companies before joining the newly 

formed 3i Ventures in 1981. He founded Foresight 

Group, formerly VCF Partners, with Peter 

English in 1984. 

David Hughes 

Chief Investment Officer 

David is responsible for Foresight’s private 

equity investment activities and portfolio 

management. David has 38 years experience 

of unquoted investment management, 

initially with 3i and subsequently establishing 

fund management operations for Framlington 

Investment Management Ltd, Baltic plc and 

Bank Austria AG, London. He has been involved 

in VCT management since 2004. 

Gary Fraser 

Group Finance Director 

Gary directs financial management and 

compliance, a role he has fulfilled at Foresight 

for eight years. He was previously company 

secretary for Baronsmead VCTs and other 

companies and funds within ISIS Asset 

Management plc. He qualified as a Chartered 

Accountant with Ernst & Young in 1996 and 

has been involved in raising over £1 billion 

for a range of companies. 


19

FORESIGHT’S BRIDGWATER SOLAR PLANT SOMERSET 2MW OPERATIONAL JULY 2011 

20 

FORESIGHT SOLAR EIS FUND 3

RISK FACTORS 

INVESTMENT IN SMALLER, UNQUOTED COMPANIES, BY ITS NATURE, INVOLVES A HIGH DEGREE 

OF RISK. INVESTORS SHOULD SEEK FINANCIAL ADVICE ABOUT WHETHER PARTICIPATION IN THE 

FUND IS SUITABLE FOR THEM IN THE LIGHT OF THE INFORMATION IN THIS DOCUMENT AND THEIR 

PERSONAL CIRCUMSTANCES. 

SET OUT BELOW ARE WHAT THE FUND MANAGER BELIEVES TO BE THE KEY RISKS ASSOCIATED WITH 

PARTICIPATING IN THE FUND. ADDITIONAL RISKS AND UNCERTAINTIES, NOT PRESENTLY KNOWN TO 

THE FUND MANAGER, OR WHICH THE FUND MANAGER CURRENTLY DEEMS IMMATERIAL, MAY ALSO 

HAVE AN ADVERSE EFFECT ON THE FUND AND ON INVESTMENTS. 

General risk 

Prospective Investors should be aware that the value of 

investments through the Fund can fall as well as rise. In addition, 

there is no guarantee that the valuation of Shares will fully 

reflect their underlying value, or that the Shares can be sold at 

that valuation. The value of Investments and income from them 

may go down as well as up and Investors may not get back the 

amount they originally invest through the Fund. 

Liquidity and exit 

The Investee Companies will be small, unquoted companies. 

Realisation of investments in unquoted companies can be 

difficult and may take considerable time. Investment in 

such companies by its nature is illiquid and uncertain and 

consequently involves a higher degree of risk than a portfolio 

of quoted shares. 

There is no market, nor is there intended to be a market, 

for Investments; as such, an Investment will not be readily 

realisable. It is not intended that any income or capital will be 

returned to Investors during the Three Year Period. After the 

Three Year Period, it may still be difficult to realise Investments 

or to obtain reliable information about their value as the market 

for shares in smaller companies is often less liquid than that for 

shares in larger companies, bringing with it potential difficulties 

in acquiring, valuing and disposing of such shares. An EIS 

investment should, therefore, be seen as a longer 

term investment. 

Operational risks 

The performance of the Fund is dependent on the ability of 

the Fund Manager to identify appropriate Investee Companies 

and on the ability of the Investee Companies to perform in 

line with their respective business plans. The income from the 

Investee Companies will depend on the revenues generated by 

the activities undertaken by such companies, which may be less 

than the costs incurred by such companies. 

Investment in smaller, unquoted companies, by its nature, 

involves a high degree of risk. Proper information for 

determining their value or the risks to which they are exposed 

may also not be available. Investment in such companies can 

offer good investment returns but by its nature is illiquid and 

uncertain and consequently involves a higher degree of risk 

than a portfolio of quoted shares. Realisation of investments 

in unquoted companies can be difficult and may take 

considerable time. 

Projects engaged in by Investee Companies may be subject 

to operational risks such as divergence between forecast and 

actual levels of solar radiation, or by changes in legislation, or 

by changes in the rates of revenue support, interest, inflation, 

foreign exchange or tax, or by changes in prices of solar 

panels and other capital equipment, energy, or financing, or 

by changes in labour, maintenance, safety or other operating 

costs, or by operating and technical risks, including risk of 

mechanical breakdown, failure to perform according to design 

specifications, failure to obtain accreditation and registration 

with Ofgem for Solar Power Plants, unavailability of grid 

connection, labour and other work interruptions, delays as a 

result of statutory and regulatory requirements, including those 

imposed by environmental, safety, labour and other regulatory 

and political authorities, or where construction operations do 

not proceed as planned and other unanticipated events that 

adversely affect operations. 

Investee Companies will be expected to maintain all appropriate 

industry standard insurances. However, failure to do so or 

failure to successfully claim under these insurance policies may 

materially impact the performance of the business in the event 

a claim is triggered. There are some types of losses, such as 

terrorism, acts or war, force majeure or other unforeseeable 

catastrophic events that cannot be insured at all, and situations 

where insurance is not adequate or as to which inadequate 

reserves had been established, which may adversely impact on 

the anticipated returns from a project. 

Although the intention is that Investee Companies will only 

engage counterparties to undertake projects where the 

counterparties are considered sufficiently credit-worthy, 

some counterparties may fail to honour some or all of their 

obligations under the relevant contracts which may adversely 

impact on the anticipated returns from a project. 

Investee Company performance 

The Investee Companies are likely to be small, thinly 

capitalised trading companies acting in new markets. As such, 

they are vulnerable to risks which might have a smaller impact 

on larger, better capitalised companies including management 

performance risks, counterparty credit risk, interest rate risk, 

market risks, supplier and customer concentration risks and 

other commercial risks which may materially impact 

their performance. 

FORESIGHT SOLAR EIS EIS FUND 3 

21

RISK FACTORS 

The projects engaged in by the Investee Companies may not 

be completed within budget, within the agreed timeframe or to 

the agreed specification. Although it is intended that the main 

risks of any delay in the completion of the construction or any 

overrun in the costs of the construction will be passed on to the 

relevant sub-contractor, there is some risk that the anticipated 

returns of the relevant projects undertaken by the Investee 

Companies will be adversely affected. 

Any delay to an Investee Company securing revenue from its 

customers will likely materially impact the anticipated returns 

generated from that Investee Company. 

Tax and policy changes 

The information contained in this Information Memorandum 

makes reference to the current laws concerning EIS Relief, 

Business Property Relief and Capital Gains Tax Deferral Relief. 

These levels and bases of relief may be subject to change. The 

tax reliefs referred to in this Information Memorandum are 

those currently available and their value depends on individual 

circumstances. Past performance is not necessarily a guide to 

future performance and may not necessarily be repeated. 

Any change of Governmental, economic, fiscal, monetary or 

political policy and, in particular any spending cuts or material 

movements in interest rates could materially affect, directly 

or indirectly, the operation of Investee Companies and/or 

the performance of Investment Companies and the value of 

and returns from Investments and/or its ability to achieve or 

maintain EIS qualifying status. 

Portfolio/Fund performance 

The level of returns from Investments may be less than 

expected if there is delay in the investment programme, 

such that all or part of the Fund is held in cash or near cash 

investments for longer than expected, or if the returns obtained 

on Investments are less than planned, or if Investments cannot 

be realised at the expected time and values. There can be 

no guarantee that suitable investment opportunities will be 

identified in order to meet the Fund’s objectives. 

Fund Manager 

The departure of any of the Fund Manager’s members, partners 

or employees or those of its Associates could have a material 

adverse effect on the performance of the Fund. Whilst the Fund 

Manager has entered into appropriate agreements with its 

members, partners, employees and Associates, the retention 

of their services cannot be guaranteed. The past performance 

of Foresight Group is not necessarily a guide to its future 

performance and may not necessarily be repeated. The value 

of Investments and income from them may go down as well as 

up and Investors may not get back the amount they originally 

invest in the Fund. 

EIS qualifying status of the Investor 

There are circumstances in which an Investor could cease to 

qualify for the taxation advantages offered by the EIS. For 

example, Capital Gains Tax Deferral Relief could be lost if an 

Investor ceases to be resident or ordinarily resident in the 


United Kingdom during the Three Year Period. In addition, an 

Investor could cease to qualify for EIS Relief if he receives value 

from the Fund or one of the Investee Companies during the 

period beginning one year before the Shares in the Investee 

Companies are issued and ending on the conclusion of the 

Three Year Period. Payment of a dividend, however, would not 

typically be regarded as a receipt of value. 

EIS qualifying status of the Investee Companies 

If an Investee Company ceases to carry on business of the type 

prescribed for EIS Qualifying Companies during the Three Year 

Period, this could prejudice its qualifying status under the EIS. 

The situation will be closely monitored with a view to preserving 

the Investee Company’s qualifying status, but this cannot be 

guaranteed. A failure to meet the qualifying requirements for 

EIS could result in: 

• Investors being required to repay the 30% income tax relief 

received on subscription for Shares and interest on the same; 

• a liability to tax on capital gains on a disposal of the Shares; 

and 

• any deferred gain crystallising. 

Further details of the taxation implications of an investment 

in an EIS Qualifying Company are set out in Appendix 1 of 

this document. 

Although provisional approval will be sought from HMRC that 

the Investee Companies are expected to be EIS Qualifying 

Companies and their activities should qualify under the EIS 

prior to making an Investment, there is no guarantee that 

the formal EIS claims will be agreed or that such agreement 

will not be subsequently withdrawn. In those circumstances, 

Subscription monies will not be returned to Investors. If an 

Investee Company fails to obtain EIS Qualifying Company 

status, or if it is subsequently withdrawn, EIS income tax relief 

and Capital Gains Tax Deferral Relief would not be available to 

Investors or could be withdrawn. 

Under HMRC EIS rules, EIS Qualifying Companies are required 

to have employed 100% of their net funds (after the deduction 

of issue costs) within 24 months after the date of issue of 

Shares, except where the qualifying activity consists of 

preparing to carry on a trade in which case the time limit is 24 

months after the date of commencing the trade. If an Investee 

Company fails to employ this level of funds within the required 

deadlines, the Investee Company would be in breach of the EIS 

regulations and tax relief may be withdrawn. 

A sale of Shares in the Investee Companies within the Three 

Year Period will result in the 30% income tax relief available 

upon subscription for those Shares becoming repayable to 

HMRC and in any capital gains on such Shares and any deferred 

gain being subject to CGT. It is possible for Investors to lose 

their EIS Relief and/or Capital Gains Tax Deferral Relief and/ 

or Business Property Relief by taking or not taking certain 

steps. Investors are advised to take appropriate independent 

professional advice on the tax aspects of their investment.

Changes in legislation concerning EIS rules, in particular, 

in relation to qualifying holdings and qualifying trades, may 

limit the number of available opportunities and/or reduce the 

level of returns which might otherwise have been achievable. 

Qualifying status of Investee Companies for Business 

Investment Relief 

The status of Investee Companies as “eligible trading 

companies”, “eligible stakeholder companies” or “eligible 

holding companies” (as appropriate) for the purposes of the 

Business Investment Relief rules will be closely monitored, 

but their status cannot be guaranteed. A failure to meet this 

requirement would mean that non-domiciled Investors’ cash 

used to invest in the Fund could nevertheless be treated as 

remitted to the UK. Investors are advised to take appropriate 

independent professional advice on the tax aspects of their 

investment. 

Fund Issues 

The Fund Manager reserves the right to cease to manage 

the Fund in certain circumstances set out in the Investor’s 

Agreement, in which event it will try to transfer the Portfolios 

to another fund manager or to terminate the Fund in an 

expeditious way, but there is a possibility that the Tax 

Advantages may be lost. 

The Fund Manager will seek to realise Investments and to 

terminate the Fund in an orderly fashion over a period of 

three to four years from the final Closing Date but it cannot be 

guaranteed that the Investments made can easily be realised 

within this period and, even where they can be realised, that this 

can be done on an advantageous basis. 

Potential conflicts of interest 

Situations may arise where the interests of Investors conflict 

with the interests of other funds managed by the Fund Manager 

or its Associates, or with those of the Fund Manager, its 

Associates and their officers, members or employees. Investors 

may invest in companies in which other funds managed by the 

Fund Manager or its Associates may invest or may already hold 

investments. Decisions made by the Fund Manager may be 

more beneficial for one fund managed or advised by the Fund 

Manager or its Associates than for any other. 

Investors may co-invest with third parties or through joint 

ventures or other entities. Such co-investing may give rise 

to the possibility that a co-investor or partner may at any 

time have economic or business interests or goals which are 

inconsistent with those of Investors, or that such person may 

take action contrary to the Fund’s investment objectives. The 

entitlement of the Fund Manager to a performance incentive fee 

may create an incentive for the Fund Manager to make more 

speculative investments on behalf of Investors than it would 

otherwise make in the absence of such a performance-based 

compensation arrangement. The Fund Manager may enter into 

fee sharing arrangements with third party marketers, including 

placement agents, or other advisers who refer Investors to the 

Fund, and such marketers may have a conflict of interest in 

advising prospective investors whether to invest in the Fund. 

RISK FACTORS 

The Fund Manager may in its absolute discretion provide certain 

Investors with the opportunity to co-invest in Investments. 

Potential conflicts may be inherent in, or arise from, the Fund 

Manager’s discretion in providing such opportunities to certain 

Investors. In addition, once such co-investments are made, the 

Investor’s interests and those of co-investing Investors may 

subsequently diverge. 

Financial Services Compensation Scheme 

The Fund Manager is covered by the Financial Services 

Compensation Scheme. An Investor may be entitled to 


meet their obligations, as described in greater detail in the 


Foresight will arrange for funds to be placed on deposit at 

the Investors’ own risk. Initially, funds will be held in a client 

account operated by The City Partnership (UK) Limited. Funds 

set aside to facilitate ongoing charges will be placed on deposit 

in a bank account with Woodside Corporate Services Limited 

pending payment to advisers. Neither the Fund Manager, nor 

any person engaged by it to hold such funds as receiving agent 

or otherwise nor any director or officer of any of them, will be 

liable to any Investor in the event of an insolvency of any bank 

with which such funds are deposited, nor in the event of any 

restriction on the ability to withdraw funds from such bank for 

reasons beyond the reasonable control of any of them. 


23

APPENDIX 1: TAXATION 

EIS Qualifying Companies 

Each Investee Company in which the Fund invests must 

initially (i.e. at the time of issue of the Shares) not be listed 

on a recognised stock exchange (as defined for the purposes 

of EIS Relief) and there must be no ’arrangements’ in place 

for it to become so listed. In addition, throughout the Three 

Year Period, it must not be a subsidiary of, or be controlled by, 

another company. It must either exist to carry on a qualifying 

trade or else be the parent company of a trading group 

and there must be no “arrangements” in existence for the 

Investee Company to become a subsidiary of, or be controlled 

by, another company. 

A trading group is a group in which, directly or indirectly, 

more than 50% of the shares of each subsidiary are held by 

another member of the group, but any subsidiary employing 

any of the money raised by the issue of Shares must be a 

qualifying 90% subsidiary. Non-qualifying business activities 

(broadly, investment activities and non-qualifying trades) 

must not comprise a substantial part of the business of the 

group as a whole. The qualifying business activity for which 

the money is raised by the issue of Shares must be a trade 

carried on by a company wholly or mainly in the UK with a 

requirement that an Investee Company issuing the shares 

under the EIS must have a permanent establishment in the 

UK. There must also be no ‘disqualifying arrangements’ in 

existence (i.e. broadly tax avoidance arrangements). 

It is also a requirement that an Investee Company must not be 

’in difficulty’ when Shares are issued. An Investee Company 

will not be treated as ’in difficulty’ within three years of 

its formation or if it is able to raise funds from existing 

shareholders or the market. 

The value of the gross assets of the Investee Company 

and any subsidiaries must not exceed £15 million 

immediately before the issue of Shares and £16 million 

immediately afterwards. 

The maximum fundraising per Investee Company is restricted 

to £5 million in aggregate (from EIS and other state-aided 

risk capital sources) per year and the maximum number of 

full-time (or full-time equivalent) employees in the Investee 

Company at the time of Investment is restricted to fewer 

than 250. 

Most types of trades are qualifying trades, but the following 

are excluded: 

• Dealing in land, commodities or futures, or in shares, 

securities or other financial instruments; 

• dealing in goods otherwise than in the course of an 

ordinary trade of wholesale or retail distribution, or 

acting as a wholesaler or retailer of goods of a kind 

which are collected or held as investments if stock is 

not actively sold; 

• banking, insurance, money lending, debt factoring, hire 

purchase financing or other financial activities; 

• leasing, except certain lettings of ships, or receiving 

royalties or licence fees (subject to certain 

exceptional cases); 

• providing legal or accountancy services; 


• farming and market gardening; 

• forestry and timber production; 

• property development; 

• shipbuilding; 

• producing coal and/or steel; 

• operating or managing hotels or similar establishments; 

• operating or managing nursing homes and residential 

care homes; 

• providing services to a trade consisting of any of the above 

carried on by a “connected person”; and; 

• the generation or export of electricity benefiting from 

Feed-in Tariffs or similar schemes (save for anaerobic 

digestion, hydro and community companies and which for 

the avoidance of doubt does not include ROCs). 

Shares only qualify for EIS Relief if they are ordinary shares 

which do not, at any time during the Three Year Period, carry 

any present or future preferential right to dividends (save 

where the amount and date of payment of the dividend is not 

dependent on the decision of any party and provided that the 

dividends are not cumulative) or to an Investee Company’s 

assets on its winding up, or any present or future right to 

be redeemed. 

Fund status 

The Fund has not been approved by HMRC under section 

251 of the Income Tax Act. This means that the Investor can 

obtain EIS Relief in the tax year in which Investments in 

EIS Qualifying Companies are made by the Fund and in the 

preceding tax year to the extent that Carry Back Relief is 

claimed in respect of the Investments. 

The tax year in which the Investments are made through 

the Fund may not be the same as the tax year in which 

an Investor subscribes to the Fund, notwithstanding the 

availability of Carry Back Relief, given that the Fund Manager 

may invest the Fund over the course of the 2013/2014 and 

2014/2015 tax years. Capital Gains Tax Deferral Relief is also 

given by reference to the dates on which the Fund makes 

its Investments. 

When an Investment has been made in an EIS Qualifying 

Company and that company has been trading for at least four 

months, the Fund Manager will send Investors an EIS 3 Form. 

The EIS 3 Form can be used by an Investor to claim EIS Relief 

in respect of the amount invested in that company. The EIS 3 

Form will state the amount of the EIS qualifying investment 

the Investor has made through the Fund and is required 

when claiming EIS Relief through a personal taxation return. 

EIS Relief must be claimed no later than five years after 

31 January following the year of assessment in which the 

Investment was made. 

EIS tax reliefs 

To obtain the tax reliefs described below, it is necessary to 

subscribe for Shares in EIS Qualifying Companies and claim 

the relief. The summary in paragraphs (a) to (e) below is 

based on current law, and gives only a brief outline of the 

tax reliefs and assumes that the Investor is a 40% taxpayer. 

It does not set out all the rules which must be met by EIS

Qualifying Companies and an Investor. The tax reliefs will only 

be relevant to Investors who pay UK income tax and/or wish 

to defer a capital gain. 

(a) Income tax relief 

Individuals can obtain income tax relief on the amount 

subscribed for Shares in EIS Qualifying Companies (up to 

£1,000,000 in each tax year for all EIS investments) provided 

they are not connected with any issuing company. Husbands 

and wives and civil partners can each subscribe up to 

£1,000,000. To calculate the relief, 30% is multiplied by the 

amount subscribed. The relief is given against the individual’s 

income tax liability for the tax year in which the Shares are 

issued unless the individual makes a Carry Back Relief claim. 

(b) Carry Back Relief 

Eligible Investors can claim income tax relief against their tax 

liability for the tax year preceding that in which Shares are 

issued to the extent that the eligible Investor has not used 

their annual limit in the previous tax year. 

(c) Capital Gains Tax Deferral Relief 

To the extent to which a UK resident Investor (including 

individuals and certain trustees) subscribes for Shares, he can 

claim to defer paying tax on all or part of a chargeable gain. 

The gain may have arisen on the disposal of any asset, or a 

previously deferred gain may have been brought back into 

charge. Although there is a limit of £1,000,000 for income tax 

relief (see (a) above) and for the exemption from capital gains 

tax upon a disposal (see (d) below), there is no limit on the 

amount of EIS Investments which can be used to defer a gain. 

If the Investor dies whilst still holding Shares, the deferred 

CGT liability is extinguished entirely. Shares must be issued 

within one year before and three years after the date of the 

disposal which gives rise to the gain or the date upon which a 

previously deferred gain crystallises. The gain is deferred until 

there is a chargeable event such as a disposal of Shares or an 

earlier breach of the EIS rules. 

(d) Capital gains tax exemption 

Any capital gains realised on a disposal of Shares in an 

EIS Qualifying Company after the Three Year Period, and 

on which EIS relief (see (a) above) has been given and not 

withdrawn, will be capital gains tax-free. Any capital gains 

realised on a disposal within the Three Year Period will be 

subject to CGT, at 18% or 28% for individuals (depending on 

the individual’s taxable income). 

(e) Loss Relief against income or gains 

Tax relief is available at any time in respect of any loss 

realised upon a disposal of Shares in an EIS Qualifying 

Company on which EIS income tax relief (see (a) above) or 

Capital Gains Tax Deferral Relief (see (c) above) has been 

given and not withdrawn. The amount of the loss (after taking 

account of any income tax relief initially obtained) can be 

set against the individual’s gains in the tax year in which 

the disposal occurs, or, if not fully used, against gains of a 

subsequent year. Alternatively, on making a claim, the loss, 

net of income tax relief, may be set off against the individual’s 

taxable income in either the tax year in which the disposal 

occurs, or the previous tax year. 

INHERITANCE TAX 

APPENDIX 1: TAXATION 

Business Property Relief 

Although not an EIS tax relief as such, an investment in an EIS 

Qualifying Company should qualify for 100% relief from IHT 

under current legislation, provided the investment has been 

held for at least two years and is still held at time of death. 

There is no upper limit on the amount of IHT Relief which can 

be claimed. The combined availability of the reliefs referred to 

above can result in significant tax savings. 

Trusts 

Reliefs are available to UK resident Investors as trustees of 

discretionary or life interest trusts. 

Apart from being attractive to individual Investors who are 

UK resident for tax purposes, the Fund offers excellent tax 

planning opportunities to trustees of certain trusts. 

Capital Gains Tax Deferral Relief, as described above, can 

be claimed on the amount subscribed for Shares in EIS 

Qualifying Companies against any chargeable gains if the 

Investment is made within one year before and three years 

after the date of the disposal which gives rise to the gain or 

the date upon which a previously deferred gain crystallises. 

Loss Relief is available under the normal capital loss rules in 

respect of any losses incurred on Investments made through 

the Fund. 

Inheritance Tax: discretionary trusts can benefit from 

Business Property Relief on EIS Investments made by the 

Fund, provided they have been held by the trustees for 

two years. 

Please note that this is only a condensed summary 

of the taxation legislation and should not be construed 

as constituting advice which a potential Investor should 

obtain from his or her own investment or taxation 

adviser before applying to participate in the Fund. 

The value of any tax reliefs will depend on the 

individual circumstances of Investors. 


25

APPENDIX 2: INVESTOR’S AGREEMENT 

This Agreement sets out the terms and conditions for the Fund 

1. DEFINITIONS, CONSTRUCTION AND 

INTERPRETATION 

1.1 In this Investor’s Agreement the definitions contained 

in the Glossary set out in Appendix 3 of the information 

memorandum dated May 2013 shall apply. 

1.2 Words and expressions defined in the FCA Rules which 

are not otherwise defined in this Investor’s Agreement 

shall, unless the context otherwise requires, have the same 

meaning in this Investor’s Agreement. 

1.3 Any reference to a statute, statutory instrument or to 

rules or regulations in this Investor’s Agreement shall be 

references to such statute, statutory instrument or rules 

or regulations as from time to time amended, re-enacted 

or replaced and to any codification, consolidation, 

re-enactment or substitution thereof as from time to time 

in force. 

1.4 In this Investor’s Agreement, unless the context otherwise 

requires, references to the singular only shall include 

the plural and vice versa; words importing the masculine 

gender shall include the feminine and neuter and vice 

versa; words importing persons shall include bodies 

corporate, unincorporated associations and partnerships. 

1.5 Unless otherwise indicated in this Investor’s Agreement, 

references to clauses and Schedules shall be to clauses and 

Schedules in this Investor’s Agreement. 

1.6 Headings to clauses and Schedules are for convenience 

only and shall not affect the interpretation of this 


2. PARTICIPATING IN THE FUND 

2.1 This Agreement comes into force on the date on which an 

Investor is notified in writing by the Fund Manager that his 

Application Form is accepted. 

2.2 This Agreement enables the Investor to participate in the 

Fund. The Fund will be a Complying Fund. 

2.3 The Investor hereby appoints the Fund Manager, on the 

terms set out in this Investor’s Agreement, to manage his 

Portfolio(s) as one of a series of similar Portfolios which 

together constitute the Fund. The Fund Manager agrees to 

accept its appointment and obligations on the terms set out 

in this Investor’s Agreement. 

2.4 The Fund Manager is authorised and regulated by the 

Financial Conduct Authority for the conduct of UK business. 

The Fund Manager is a party to this Investor’s Agreement 

in its own right and as agent for and on behalf of the 

Administrator and the Nominee. 

2.5 Unless otherwise agreed between the Fund Manager and 

the Investor, the Investor will be categorised by the Fund 

Manager as a “Retail Client”, in which case this Investor’s 

Agreement will constitute a “Client Agreement” for the 

purpose of the FCA Rules. 

2.6 The Investor confirms and warrants that: 

(a) He is an experienced investor in small to medium higher 

risk, unquoted companies and is suitably knowledgeable 

of the risks associated with non-Readily Realisable 

Investments; and 


(b) if he has completed Box 2 of the Application Form with 

details of agreed adviser charges to be facilitated, he has 

been advised as to the suitability of participation in the 

Fund by his financial adviser. 

2.7 The Investor confirms that he is not seeking advice from 

the Fund Manager on the merits of any investment in 

respect of the Fund. 

2.8 The Investor agrees that the Fund Manager, Administrator 

and Nominee (and any entity appointed by the Fund 

Manager to hold cash) and their Associates and agents 

may hold information about him and his affairs in order 

to verify his identity and financial standing or otherwise 

in the performance of this Investor’s Agreement (among 

other things the Fund Manager, Administrator and 

Nominee (and any entity appointed by the Fund Manager 

to hold cash) and their Associates and agents may consult 

a credit or mutual reference agency, which may retain a 

record of the enquiry). 

2.9 Anti-money laundering regulations aim to prevent 

criminal property being used or disguised as legitimate 

wealth. The Fund Manager (and any entity appointed 

to hold cash) has a duty to comply with any applicable 

anti-money laundering provisions including the Proceeds 

of Crime Act 2002, the Money Laundering Regulations 

2007 and the FCA Rules. The Fund Manager (and any 

entity appointed to hold cash) must, therefore, verify the 

Investor’s identity and report suspicious transactions to 

the appropriate enforcement agencies. If the Investor 

does not provide the identity verification information 

when requested, the Fund Manager may be unable to 

accept any instructions from him or to comply with its 

obligations under this Investor’s Agreement in whole 

or in part. 

2.10 Following receipt of an Application Form, the Fund 

Manager will write to the Investor enclosing a form of 

cancellation notice. If the Investor wishes to exercise his 

right to cancel, the Investor must notify the Fund Manager 

by delivering the duly completed form to the Fund 

Manager at ECA Court, 24-26 South Park, Sevenoaks, 

Kent TN13 1DU within 14 days of the date of the letter from 

the Fund Manager enclosing the cancellation notice. 

2.11 If the Investor exercises his cancellation rights, the 

Fund Manager shall arrange for the refund of any monies 

paid by the Investor, less any charges the Fund Manager 

or its agents (or any entity appointed to hold cash) has 

already incurred for any Services undertaken (or from any 

obligations to make payments) pursuant to the terms of 

this Investor’s Agreement or paid out in respect of agreed 

Adviser Charges. The Fund Manager is obliged to hold 

Investors’ subscription monies until the Fund Manager 

has satisfactorily completed their money laundering 

checks and the Investor will not be entitled to interest 

on such monies. 

2.12 The right to cancel set out in clause 2.10 is without 

prejudice to the right under clause 15.2 below to terminate 

this Investor’s Agreement, which is a separate right. 

2.13 The right to cancel under the FCA Rules does not give 

the Investor the right to cancel, terminate or reverse 

any particular investment transaction executed for 

the account of the Investor before such cancellation 

takes effect.

2.14 The Fund Manager will comply with FCA conduct of 

business rule 11.2, as more particularly detailed in Schedule 

3 to this Investor’s Agreement. Investors should note that 

the provision by counterparties of guarantees of minimum 

contractual levels of return may be more important than 

price in obtaining the best possible execution result in the 

context of achieving the investment objectives set out in 

Schedule 1 to this Investor’s Agreement. 

3. SUBSCRIPTIONS 

3.1 The Investor: 

(a) must make a Subscription in the Fund of not less 

than the amount shown in the Application Form at the 

same time as submitting his Application Form to invest in 

the Fund; 

(b) may make further Subscriptions (in multiples of £1,000) 

up to and including the final Closing Date; and 

(c) may not make any Subscriptions after the final 

Closing Date. 

3.2 The Investor may make a withdrawal from the Fund and 

terminate this Agreement pursuant to Clause 15.2 below. 

3.3 Subscriptions received shall be deposited (in an interest 

bearing client account) pursuant to Clause 7.7 pending 

their investment. 

4. SERVICES 

4.1 The Fund Manager will manage the Portfolio of the Investor 

as the discretionary investment manager of the Investor 

on the terms set out in this Investor’s Agreement. The Fund 

Manager will exercise all discretionary powers in relation to 

the selection of, or exercising rights relating to, Investments 

on the terms set out in this Investor’s Agreement, including, 

in particular the negotiation and execution of agreements 

and ancillary documentation relating to Investments. 

4.2 The Fund Manager will also arrange for the provision of 

administration services (which does not extend to custody 

and nominee services) in relation to the Fund by a suitably 

authorised person, as required. The Administrator shall 

initially be Foresight Fund Managers Limited but the Fund 

Manager shall be entitled from time to time at its discretion 

to replace any Administrator with another person (who 

may be an Associate) or to provide such administration 

services itself (in which case, where the context permits, 

the Fund Manager shall, for the purposes of this Investor’s 

Agreement be deemed to be the Administrator). 

4.3 The Investor hereby authorises the Fund Manager or its 

agents to act on its behalf and in the name of the Investor 

or his nominee to negotiate, agree, execute and do all such 

acts, transactions, agreements and deeds as the Fund 

Manager or its agents may deem necessary or desirable in 

connection with the Portfolio for the purposes of making, 

and and managing and disposing of Investments and 

cash on behalf of the Investor and generally fulfilling the 

objectives and purposes of the Fund (including facilitating 

the payment of agreed charges on behalf of Investors 

to their authorised financial intermediaries) and this 

authority shall be irrevocable and shall survive, and 

shall not be affected by, the subsequent death, disability, 

incapacity, incompetence, termination, bankruptcy, 

insolvency or dissolution of the Investor. This authority 

(subject to clause 7.6) will terminate upon the investor 

ceasing to hold any cash or other assets in his Portfolio. 

4.4 It is the Investor’s responsibility to keep his financial 

circumstances, objectives and appetite for risk under 

review and to assess whether an investment in the Fund 

remains suitable for his needs (and to seek advice from 

a suitably qualified and authorised professional financial 

adviser, if appropriate). The Fund Manager shall not be 

liable for any losses suffered or incurred by an Investor 

as a result of his investment in the Fund (whether or not 

he has received advice from a professional adviser) and 

cannot and does not make any representation that such 

investment is suitable or appropriate for the Investor’s 

specific needs and requirements. 

4.5 If the Fund Manager shall acquire any shares or other 

assets in which Investors in the Fund alone or with 

others, including the Foresight Solar VCT plc, may, as 

a class, have a community of interest in relation to the 

continuing management of such shares and assets by 

the Fund Manager, then the Fund Manager shall (alone 

or with such other third parties as it may nominate) 

have such power, right and authority on behalf of the 

Investor to execute such trusts and do such acts and 

transactions in relation to such assets for the benefit of 

the class (but not including incurring any liabilities for 

the account of the Investor in respect of such shares 

or other assets) as the Fund Manager (in its absolute 

discretion) may think fit, including, without prejudice to 

the generality of the foregoing, the power to exercise 

of transfer all voting rights and powers of consent 

which may attach to or be relevant to such shares or 

assets and/or to dispose of or consolidate such shares 

and assets and/or to charge such shares and assets 

as indirect security (without recourse to the Investor) 

for the discharge of financial obligations owed by third 

parties with or without receiving any consideration 

for the account of the Investor for so doing and on the 

basis that such shares and assets may not be withdrawn 

from the Fund except on termination of the Fund. 

5. INVESTMENT OBJECTIVES AND 

RESTRICTIONS 

5.1 In performing the Services, the Fund Manager shall 

have regard to and shall comply with the investment 

objectives and the investment restrictions set out in 

Schedule 1 to this Investor’s Agreement. 

5.2 In performing the Services, the Fund Manager shall at 

all times have regard to (if the Investor has so indicated 

in his Application Form): 

(a) The need for an Investor’s Portfolio(s) to attract 

the Tax Advantages in accordance with the investment 

objectives and restrictions set out in Schedule 1 of this 

Investor’s Agreement; and 

(b) all Applicable Laws. 



27


6. TERMS APPLICABLE TO DEALING 

6.1 In effecting transactions for the Investor, the Fund Manager 

will act in accordance with the FCA Rules. 

6.2 Where relevant, it is agreed that all transactions will be 

effected in accordance with the rules and regulations of 

any relevant market, exchange or clearing house (and the 

Fund Manager shall take all such steps as may be required 

or permitted by such rules and regulations and/or by good 

market practice) through which transactions are executed 

and to all applicable laws so that: 

(a) If there is any conflict between the provisions of this 

Investor’s Agreement and any such rules, customs or 

applicable laws, the latter shall prevail; and 

(b) action may be taken as thought fit in order to ensure 

compliance with any such rules, customs or applicable laws. 

An Investor should, however, be aware that the Portfolio(s) 

of an Investor will be invested in a range of unlisted 

securities and there is generally no relevant market or 

exchange and consequent rules and customs and there will 

be varying practices for different securities. Transactions 

in shares of such securities will be effected on the best 

commercial terms which can be secured. 

6.3 Subject to the FCA Rules, transactions for an Investor will 

be aggregated with those for other Investors pursuant to 

clause 6.4. They may also be aggregated with transactions 

for other customers of the Fund Manager, and of its 

members, partners, employees and Associates and their 

employees and, if so, any Investments made pursuant to 

such transactions will be allocated on a fair and reasonable 

basis in accordance with the FCA Rules and endeavours will 

be made to ensure that the aggregation will work to the 

advantage of each of the Investors, but an Investor should 

be aware that the effect of aggregation may work on some 

occasions to an Investor’s disadvantage. 

6.4 Generally Investments will be allocated between Investors by 

reference to the proportion which the Investor’s uninvested 

cash bears to the total uninvested cash of all Investors 

in the Fund at the time that Investment is made, subject 

always to the overriding discretion of the Fund Manager 

and any limitations that an Investor may prescribe for 

his Investments (including limitations deriving from the 

professional rules applicable to accountants, lawyers and 

others) and which are accepted by the Fund Manager. 

6.5 Subject to both the FCA Rules and the Fund Manager’s 

policy on the management of conflicts of interest, the Fund 

Manager may make use of soft commission arrangements in 

respect of transactions undertaken for the Fund as may be 

disclosed to the Investor from time to time. 

6.6 The Fund Manager will act in good faith and with due 

diligence in its choice and use of counterparties but, subject 

to this obligation and to the FCA Rules, shall have no 

responsibility for the performance by any counterparty of 

its obligations in respect of transactions effected under this 



6.7 Save as detailed in clause 2.14 of this Investor’s Agreement, 

the Fund Manager shall take reasonable steps to obtain the 

best possible result when executing orders on an Investor’s 

behalf. This duty of best execution is owed by the Fund 

Manager to the Investor only when the Fund Manager 

has contractual or agency obligations to the Investor. The 

Investor should familiarise himself with the Order Execution 

Policy, provided at Schedule 3 of this Investor’s Agreement. 

The Fund Manager is required to obtain the Investor’s 

consent to this policy, which will be demonstrated by the 

Investor submitting a completed Application Form to the 

Receiving Agent. 

7. CUSTODY 

7.1 The Fund Manager will (if and for so long as it is duly 

authorised) either be responsible for safeguarding the 

assets within an Investor’s Portfolio or will arrange for a 

suitably authorised custodian to perform that role at the 

Fund Manager’s own cost. Cash will be dealt with as provided 

in clause 7.7 below. 

7.2 Investments will be registered in the name of the Nominee. 

Investments within the Investor’s Portfolio in the Fund will 

be beneficially owned by the Investor at all times but the 

Nominee will be the legal owner of the Investments of the 

Investor in the Fund. The Nominee will not, save as set out in 

clause 7.6, carry on any activity except as instructed by the 

Fund Manager. 

7.3 The Nominee will hold any title documents or documents 

evidencing title to the Investments. Individual customer 

entitlements are not identifiable by separate certificates 

or other physical documents of title or external electronic 

records. In the event of a default of the Nominee, those 

for whom it holds securities may share in any shortfall 

pro rata. The Administrator may deliver or accept delivery 

of certificates and/or CREST balances on behalf of the 

Nominee. The Nominee holds the Investments pursuant to 

a trust under which the interests of customers are created 

or extinguished when a customer makes acquisitions or 

disposals in accordance with this Investor’s Agreement. 

Pursuant to section 250(1) of the Income Tax Act, shares 

subscribed for, issued to, held by or disposed of for an 

individual by a nominee are treated for the purposes of the 

EIS as subscribed for, issued to, held by or disposed of by the 

individual Investor. The Nominee shall maintain at all times 

a record sufficient to show the beneficial interest of the 

Investor in the whole number of Shares allocated to, and the 

cash within, his Portfolio. 

7.4 Investments or title documents may not be lent to a third 

party and nor may there be any borrowing against the 

security of the Investments or such title documents. 

7.5 An Investment may be realised in whole or in part order 

to discharge an obligation of the Investor under the 

Agreement, for example in relation to payment of fees, costs 

and expenses. 

7.6 The Administrator will arrange for the Investor to receive 

details of any meetings of investors in Investments and any 

other information issued to investors in Investments if the 

Investor at any time in writing requests such details and 

information (either specifically in relation to a particular 

Investment or generally in respect of all Investments). The

Investor shall be entitled, as a matter of right, to require 

the Nominee to appoint the Investor as its proxy to vote 

as the Investor may see fit at any meeting of shareholders 

in an Investee Company in which an Investment is held for 

an Investor. In the case of an Investor who is not validly 

appointed as the Nominee’s proxy for the purposes of 

a meeting of the shareholders of an Investee Company 

in which an Investment is held for that Investor, and 

upon the application of the Fund Manager to the 

Administrator, the Nominee may (but is not obliged to) 

appoint the Fund Manager as its proxy to vote at that 

meeting. In the case of variations in the share capital, 

receipts of a notice of conversion, or proposal to wind 

up, amalgamate or take over a company in which an 

Investment is held for the Investor: 

(a) A bonus or capitalisation issue will be automatically 

credited to an Investor’s holding; 

(b) otherwise (where appropriate) the Fund Manager 

will be sent a summary of the proposal and the required 

action to be taken (if any) for instructions; 

(c) if, on a rights issue, no instruction is received from 

the Fund Manager, the Nominee will allow the rights to 

lapse. Lapsed proceeds in excess of £3 will be credited to 

the Investor. Sums less than this will be retained for the 

benefit of the Administrator. However, if nil paid rights 

in a secondary market are acquired for the Investor, 

such rights will be taken up, unless the Fund Manager 

provides contrary instructions; 

(d) all offers will be accepted upon going unconditional 

whether or not any instructions have been received; and 

(e) entitlements to Shares will be to the nearest whole 

Share rounded down and the aggregate of fractional 

entitlements may be held by the Nominee for the 

Administrator. If partly paid Shares are held for an 

Investor and are the subject of a call for any due balance 

and no instruction is received, the Administrator may 

sell sufficient of the Investments to meet the call. 

7.7 The cash balance held for an Investor in their 

Portfolio will be deposited with an authorised banking 

institution in a common call account with customer 

trust status, together with cash balances belonging 

to other Investors’ Portfolios and the Fund Manager 

shall appoint a suitably authorised person to operate 

such account, save that, if and for so long as the Fund 

Manager is itself a suitably authorised person, it may 

provide such services itself. Initially, Investors’ cash 

will be held in a client account operated by The City 

Partnership (UK) Limited who will act as receiving agent 

in respect of Subscriptions. Cash balances will not be 

actively managed and will only attract the interest rates 

(if anything) applicable to call accounts. Any interest 

earned on cash balances held for the Investor in the 

Fund will be added to the Investor’s Portfolio. 

7.8 The Fund Manager may decide to cease to treat as 

money owed to an Investor any unclaimed cash of an 

Investor if the Fund Manager has taken reasonable steps 

to contact the Investor and to return the balance for a 

period of at least six years. In such circumstances, the 

Fund Manager may retain such funds for its own benefit. 


8. REPORTS AND INFORMATION 

8.1 Contract notes will be provided for each transaction for 

the Investor. 

8.2 The Fund Manager shall send the Investor a report 

relating to the Fund, complying with the FCA Rules, 

every six months, in respect of the periods ending on 

or around 5 April and 5 October. Retail clients may 

request to receive 3 monthly reports by contacting the 

Fund Manager in writing. Reports will include a measure 

of performance in the later stages of the Fund once 

valuations are available for the Investments. Investments 

will be valued in accordance with appropriate IPEVC 

Guidelines from time to time prevailing. 

8.3 The Fund Manager and the Administrator shall supply 

such further information which is in its respective 

possession or under its control as the Investor may 

reasonably request as soon as reasonably practicable 

after receipt of such request. 

8.4 Any contract notes, statements, reports or information 

so provided by the Fund Manager or the Administrator 

to the Investor will state the basis of any valuations of 

Investments provided. 

9. FEES AND EXPENSES 

9.1 The Fund Manager and the Administrator shall receive 

fees for their Services, and reimbursements of their costs 

and expenses, as set out in Schedule 2 to this Agreement. 

9.2 The Fund Manager may facilitate, or procure the 

facilitation of, payments in respect of charges which the 

Investor has agreed with his/her authorised financial 

intermediary on his/her behalf as detailed in the 

Information Memorandum and the Application Form. 

The Investor confirms that any ongoing agreed charges 

payable to their authorised financial intermediary is and 

will be for ongoing services to the Investor in relation 

to the Fund. The Investor has the right to cancel the 

facilitation of any ongoing charges at any time by notice 

in writing to the Fund Manager. The Investor may also 

request that facilitation of ongoing charges be paid to a 

new authorised financial intermediary who is advising the 

Investor in relation to the Fund in place of the previous 

authorised financial intermediary. Any such request 

must be made by at least 30 days notice in writing to 

the Fund Manager. The Fund Manager may structure the 

funding and payment of such payments at its discretion 

for legal, tax and regulatory reasons from time to time. 

The administration of remuneration for advisers will be 

managed by Foresight Fund Managers Limited. 

9.3 The Fund Manager shall be responsible for meeting 

all fees and expenses of the Nominee and any entity 

appointed to hold cash. 


29


10. MANAGEMENT AND ADMINISTRATION 

OBLIGATIONS 

10.1 The Fund Manager and the Administrator shall each devote 

such time and attention and have all necessary competent 

personnel and equipment as may be required to enable 

them to provide their respective Services properly and 

efficiently, and in compliance with the FCA Rules. 

10.2 Except as disclosed in the Information Memorandum and 

as otherwise provided in this Agreement (for example 

on early termination), neither the Fund Manager nor the 

Administrator shall take any action which may prejudice 

the tax position of the Investor insofar as it is aware 

of the relevant circumstances, and in particular which 

may prejudice obtaining the Tax Advantages for the 

Investments, save where the Fund Manager considers it to 

be in the best interests of the Investor. 

11. OBLIGATIONS OF THE INVESTOR 

11.1 A Portfolio of an Investor which is governed by this 

Investor’s Agreement is set up on the basis of the 

declaration and elections made by the Investor in his 

Application Form which includes the following statements 

by the Investor in relation to his Subscription: 

(a) The fact as to whether or not the Investor 

wishes to seek EIS Relief for the Investments in EIS 

Qualifying Companies; 

(b) that he agrees to notify the Fund Manager if any 

Investment is in any company with which the Investor is 

connected within the meaning of Section 163 and Sections 

166 to 177 of the Income Tax Act; 

(c) that he agrees to notify the Fund Manager if, within 

three years of the date of issue of Shares by an EIS 

Qualifying Company, the Investor becomes connected with 

the company or receives value from such company; 

(d) that he will provide the Fund Manager with his 

tax district, tax reference number and National 

Insurance number; 

(e) he has been advised as to the suitability of an 

investment in the Fund by his financial adviser; and 

(f) that he and his financial adviser will notify the 

Fund Manager in the event that any Investment is no 

longer suitable. 

11.2 The Investor confirms that the information stated in the 

Application Form in these (and all other) respects is true 

and accurate as at the date of this Investor’s Agreement. 

11.3 The Investor must immediately inform the Fund Manager 

in writing of any change of tax status, other material 

change in circumstance and any change in the information 

provided in the Application Form to which Clause 11.1 

above refers. 

11.4 In addition, an Investor must provide the Fund Manager 

with any information which it reasonably requests for the 

purposes of managing the Investments of the Investor 

pursuant to the terms of this Investor’s Agreement. 


12. DELEGATION 

12.1 Without prejudice to any other provision of this Investor’s 

Agreement, the Fund Manager may employ or otherwise 

appoint agents and advisers and other persons, including 

Associates, to perform any administrative, custodial or 

ancillary services to assist the Fund Manager in performing 

its Services and may rely on advice from any agent or 

advisers or other such persons, in which case it will act in 

good faith and with due diligence in the selection, use and 

monitoring of such persons but (save where the agent, 

adviser or other persons are an Associate of the Fund 

Manager, for whom the Fund Manager will remain directly 

responsible to the Investor for all acts and omission as if 

they were that of the Fund Manager), the Fund Manager 

will not be responsible for the acts and omissions of any 

such, adviser or other persons. 

12.2 Without prejudice to any other provision of this 

Investor’s Agreement, the Fund Manager may delegate 

or subcontract any of its functions under this Investor’s 

Agreement, subject to selecting such delegates with due 

skill and care and keeping all such appointments under 

review, but (save where the delegate is an Associate of the 

Fund Manager, for whom the Fund Manager will remain 

directly responsible to the Investor for all acts and omission 

as if they were that of the Fund Manager), the Fund 

Manager will not be responsible for the acts and omissions 

of any such delegate. 

12.3 For the avoidance of doubt, the provisions of clauses 12.1 

and/or 12.2 shall apply if the Fund Manager appoints any 

person other than itself to be the Administrator pursuant 

to clause 4 or if it appoints any person to provide such 

services as are referred to in clause 7.2 or clause 7.7. 

12.4 The Administrator shall have similar powers of delegation 

to those conferred on the Fund Manager by clauses 12.1 and 

12.2 and, if the Administrator does so, then the provisions 

of those clauses shall apply mutatis mutandis. 

13. POTENTIAL CONFLICTS OF INTEREST 

AND DISCLOSURE 

13.1 The Fund Manager and the Administrator may provide 

similar services or any other services whatsoever to 

any customer and neither the Fund Manager nor the 

Administrator shall in any circumstance be required to 

account to the Investor for any profits earned in connection 

therewith. So far as is deemed practicable by the Fund 

Manager or the Administrator, the Fund Manager or the 

Administrator will use all reasonable endeavours to ensure 

fair treatment as between the Investor and such customers 

in compliance with the FCA Rules. 

13.2 The Fund Manager, and any Associate may, subject to 

FCA Rules and without prior reference to the Investor, 

recommend transactions in which it or an Associate has, 

directly or indirectly, a material interest or a relationship 

of any description with another party, which may involve a 

potential conflict with its duty to the Investor. Neither the 

Fund Manager, nor any Associate, shall be liable to account

to the Investor for any profit, commission or remuneration 

made or received from or by reason of such transactions 

or any connected transactions. For example, such 

potential conflicting interests or duties may arise because: 

(a) the Fund Manager or an Associate may receive 

remuneration or other benefits by reason of acting 

in corporate finance or similar transactions involving 

companies whose securities are held for the Investor; 

(b) the Fund Manager may take an equity stake in a 

company whose securities are held for the Investor at a 

price not below the issue price available to the Investor 

subject to subparagraph (c) below; 

(c) the Fund Manager’s entitlement to the performance 

incentive described in Schedule 2 of this Agreement may 

be obtained by subscriptions for Shares by or on behalf of 

the Fund Manager and its directors, members, partners, 

employees, Associates and others with whom the Fund 

Manager may share such entitlement. Those Shares may 

be subscribed at a price below the issue price available 

to the Investor and may dilute the returns to the Investor 

but only to the extent of the value of the performance 

incentive and subject to the conditions described in 

Schedule 2; 

(d) the Fund Manager or an Associate provides 

investment services for other customers; 

(e) any of the Fund Manager’s directors, members, 

partners, employees or Associates or their employees, is 

or may become a director of, holds or deals in securities 

of, or is otherwise interested in any company whose 

securities are held or dealt in on behalf of the Investor; 

(f) the transaction is in securities issued by an Associate 

or the customer of an Associate; 

(g) the transaction is in relation to an Investment in 

respect of which the Fund Manager or an Associate may 

benefit from a commission or fee payable otherwise than 

by the Investor and/or it or an Associate may also be 

remunerated by the counterparty to any such transaction; 

(h) the Fund Manager deals on behalf of the Investor with 

an Associate; 

(i) the Fund Manager may act as agent for the Investor in 

relation to a transaction in which it is also acting as agent 

for the account of other customers and Associates; 

(j) the Fund Manager may, in exceptional circumstances, 

deal in investments as principal in respect of a transaction 

for the Investor; 

(k) the Fund Manager may have regard, in exercising its 

management discretion, to the relative performance of 

other funds under its management; 

(l) the Fund Manager may effect transactions involving 

placings and/or new issues with an Associate who may 

be acting as principal or receiving agent’s commission. 

The Fund Manager or an Associate may retain any agent’s 

commission or discount or other benefit (including 

directors’ fees) that accrues to them; 

(m) the transaction is in the securities of a company for 

which the Fund Manager or an Associate has underwritten, 

managed or arranged an issue within the period of 12 

months before the date of the transaction; or 

(n) the transaction is in securities in respect of which 

the Fund Manager, or a member, partner or employee 

of the Fund Manager or an Associate or its employees, 

is contemporaneously trading or has traded on its own 

account or has either a long or short position. 

14. LIABILITY 


14.1 The Fund Manager agrees, for itself and as agent for the 

Administrator that each of them will at all times act in good 

faith and with reasonable care and due diligence. Nothing in 

this paragraph 14 shall exclude any duty or liability owed by 

the Investor under the FCA Rules. 

14.2 The Fund Manager shall not be liable for any loss to 

the Investor arising from any investment decision made 

in accordance with the investment objectives and the 

investment restrictions set out in Schedule 1 to this 

Agreement or for other action in accordance with this 

Agreement, except to the extent that such loss is directly 

due to the negligence or wilful default or fraud of the Fund 

Manager or any of its members, partners or employees. 

14.3 The Administrator and Nominee shall not be liable for any 

loss to the Investor arising from any action in accordance 

with this Investor’s Agreement, except to the extent that 

such loss is directly due to the negligence or wilful default or 

fraud of the Administrator or the Nominee (as applicable) or 

their respective Associates or any of its or their members, 

partners or employees. 

14.4 Subject to Clauses 6.6 and 12, the Fund Manager shall not 

be liable for any defaults of any counterparty, agent, banker, 

nominee or other person or entity which holds money, 

investments or documents of title for the Fund, other than 

where such party is an Associate. 

14.5 In the event of any failure, interruption or delay in the 

performance of the Fund Manager’s or the Administrator’s 

(or any of their respective agents’, delegates’ or 

subcontractors’) respective obligations resulting from 

acts, events or circumstances not reasonably within its 

control (including but not limited to acts or regulations 

of any governmental or supranational bodies or 

authorities) or breakdown, failure or malfunction of any 

telecommunications or computer service or systems, the 

Investor acknowledges that neither the Fund Manager nor 

the Administrator, as appropriate, shall be liable or have any 

responsibility of any kind for any loss or damage thereby 

incurred or suffered by the Investor. 

14.6 The Fund Manager gives no representations or warranty 

as to the performance of the Fund. Investments are high 

risk investments, being non-Readily Realisable Investments. 

There is a restricted market for such Investments and it may 

therefore be difficult to sell the Investments or to obtain 

reliable information about their value. Investors should 

consider the suitability of the investment objectives and 

restrictions set out in Schedule 1 of this Agreement carefully 

and note the risk warnings set out in the Information 

Memorandum. Nothing in this Clause 14 shall exclude the 

liability of the Fund Manager for its own fraud. 


31

15. TERMINATION 

15.1 The Fund Manager will seek to realise Investments and to 

terminate the Fund in an orderly fashion over a period of four 

years from the final Closing Date but it cannot be guaranteed 

that Investments made can be easily realised within this period 

and, even where they can be realised, that this can be done on 

an advantageous basis. On termination of the Fund, the Fund 

Manager shall endeavour to procure that all Shares in the 

Investor’s Portfolio will be sold or transferred into the Investor’s 

name or as the Investor may otherwise direct. Any cash within 

the Investor’s Portfolio will be paid to the Investor. 

15.2 An Investor is entitled to make withdrawals of Shares in his 

Portfolio at any time after the end of the period of seven years 

beginning with the date on which the Shares in question were 

issued. An Investor is entitled to withdraw cash in his Portfolio 

at any time. The Fund Manager will have a lien on all assets 

being withdrawn or distributed from the Fund and shall be 

entitled to dispose of some or all of the same and apply the 

proceeds in discharging any liability (including for any accrual 

of the performance incentive fee) of the Investor to the Fund 

Manager. This Agreement shall terminate upon the completion 

of the withdrawal from the Fund of all shares and cash which 

the Investor is entitled to receive under this clause 15.2. The 

balance of any sale proceeds and control of any remaining 

Investments will then be passed to an Investor. 

15.3 If: 


(a) The Fund Manager gives to the Investor not less than three 

months’ written notice of its intention to terminate its role as 

Fund Manager under this Agreement; or 

(b) the Fund Manager ceases to be appropriately authorised by 

the FCA or becomes insolvent; 

the Fund Manager shall endeavour to make arrangements to 

transfer the Investments to another fund manager, in which 

case that fund manager shall assume the role of the Fund 

Manager under this Agreement, failing which the Agreement 

shall terminate forthwith and, subject to Clause 16, the 

Investments held for the account of the Investor shall be 

transferred into the Investor’s name or as the Investor may 

otherwise direct. 

16. CONSEQUENCES OF TERMINATION 

16.1 On termination of this Agreement pursuant to Clause 15, the 

Fund Manager will use reasonable endeavours to complete all 

transactions in progress at termination expeditiously on the 

basis set out in this Investor’s Agreement. 

16.2 Termination will not affect accrued rights, existing 

commitments or any contractual provision intended to survive 

termination and will be without penalty or other additional 

payments save that the Investor will pay fees, expenses and 

costs properly incurred by the Manager and the Administrator 

(including a fair amount determined by the Fund Manager in 

compensation for accrued performance incentive fees not 

obtained by subscriptions for Shares) up to and including 

the date of termination and payable under the terms of this 



16.3 On termination, the Fund Manager may retain and/or realise 

such Investments as may be required to settle transactions 

already initiated and to pay the Investor’s outstanding 

liabilities, including fees, costs and expenses payable 

under Clause 9 of this Agreement (including a fair amount 

determined by the Fund Manager in compensation for accrued 

performance incentive not obtained by subscriptions for 

Shares), the details of which are set out in Schedule 2 to this 


16.4 Clauses 14 and 17 shall survive the termination of this 


17. CONFIDENTIAL INFORMATION 

17.1 Neither the Fund Manager, nor the Investor shall disclose to 

third parties or take into consideration for purposes unrelated 

to the Fund information either: 

(a) The disclosure of which by it would be or might be a breach 

of duty or confidence to any other person; or 

(b) which comes to the notice of a partner or member of or 

an employee, officer or agent of the Fund Manager or the 

Administrator or of any Associate but does not properly come 

to the actual notice of that party providing services under this 


17.2 Each of the Fund Manager and the Administrator will at 

all times keep confidential all information acquired in 

consequence of the Services, except for information which: 

(a) Is in the public knowledge; or 

(b) which they may be entitled or bound to disclose under 

compulsion of law; or 

(c) is requested by regulatory agencies; or 

(d) is given to their professional advisers where reasonably 

necessary for the performance of their professional services; 

or 

(e) which is authorised to be disclosed by the relevant party; 

and shall use all reasonable endeavours to prevent any breach 

of this Clause 17.2. 

17.3 The Fund Manager will procure that the Administrator, 

Nominee and any entity appointed to hold cash pursuant 

to clause 7.7 will observe and comply with the provisions of 

clauses 17.1 and/or 17.2. 

18. COMPLAINTS AND COMPENSATION 

18.1 The Fund Manager has established procedures in accordance 

with the FCA Rules for consideration of complaints. Details 

of these procedures are available from it on request. Should 

an Investor have a complaint, he should contact the 

Fund Manager. 

18.2 Where the Investor is categorised by the Fund Manager as a 

Retail Client, if for any reason the Investor is dissatisfied with 

the Fund Manager’s final response, the Investor is entitled to 

refer its complaint to the Financial Ombudsman Service. A 

leaflet detailing the procedure involved will be provided in the 

Fund Manager’s final response.

18.3 The Fund Manager is covered by the Financial Services 

Compensation Scheme. The Investor may be entitled to 


meet their obligations. This depends on the type of business 

and the circumstances of the claim. Most types of investment 

business are covered up to a maximum of £50,000. Further 

information about compensation arrangements is available 

on request from the Fund Manager or from www.fscs.org.uk 

19. NOTICES, INSTRUCTIONS AND 

COMMUNICATIONS 

19.1 Notices of instructions to the Fund Manager or the 

Administrator should be in writing and signed by the Investor, 

except as otherwise specifically indicated. 

19.2 The Fund Manager or the Administrator may rely and act on 

any instruction or communication which purports to have 

been given by persons authorised to give instructions by the 

Investor under the Application Form or subsequently notified 

by the Investor from time to time and, unless that relevant 

party receives written notice to the contrary, whether or not 

the authority of such person shall have been terminated. 

19.3 All communications to the Investor shall be sent (whether 

postal or electronic) to the latest address notified by the 

Investor to the Fund Manager or the Administrator and shall 

be deemed received by the Investor on the second day after 

posting or on the day after dispatch in the case of electronic 

communication. All communications by the Investor 

shall be made in writing or (save as otherwise provided) 

shall be made by telephone to the Fund Manager or the 

Administrator, in which case conversations may be recorded 

for the avoidance of any subsequent doubt. Communications 

sent by the Investor will be deemed received only if actually 

received by the Fund Manager or the Administrator. Neither 

the Fund Manager nor the Administrator will be liable for 

any delay or failure of delivery (for whatever reason) of any 

communication sent to the Investor. 

20. UNSOLICITED REAL-TIME FINANCIAL 

PROMOTION 

The Fund Manager may communicate an unsolicited realtime 

financial promotion (i.e. interactive communications such as 

a telephone call or electronic mail promoting Investments) to 

the Investor. 

21. AMENDMENTS 

21.1 The Fund Manager may amend the terms and conditions 

in this Agreement by giving the Investor not less than 10 

business days’ written notice. 

21.2 The Fund Manager may also amend these terms by giving 

the Investor written notice with immediate effect if such is 

necessary in order to comply with HMRC requirements, in 

order to maintain the EIS Relief or in order to comply with 

the FCA Rules or other statutory or regulatory requirements. 

22. DATA PROTECTION 

All data which the Investor provides to the Fund Manager 

and the Administrator is held by that party subject to the 

Data Protection Act 1998. The Investor agrees that the Fund 

Manager and the Administrator may pass personal data to 

each other and to other parties insofar as is necessary in order 

for them to provide their Services as set out in this Agreement 

and to the FCA and any regulatory authority which regulates 

them and in accordance with all other Applicable Laws. 

23. ASSIGNMENT 

23.1 This Investor’s Agreement is personal to the Investor and 

may not be assigned by the Investor without prior written 

consent of the Fund Manager. 

23.2 In the event of the Investor’s death, the Fund Manager 

and Administrator will continue to deal with the Investor’s 

personal representatives. 

23.3 The Fund Manager may assign this Investor’s Agreement 

to an Associate by giving notice to the Investor, provided 

that such Associate is authorised and regulated to 

perform all of the Fund Manager’s functions hereunder 

and subject to any amendments required to this 

Agreement to effect the assignment and subsequent 

operation by the Associate as provided in clause 21.1. 

24. ENTIRE AGREEMENT 

This Investor’s Agreement, together with the Application 

Form, comprises the entire agreement of the Fund Manager 

and its Associates with the Investor relating to the provision 

of the Services. 

25. RIGHTS OF THIRD PARTIES 

Save for the rights of the Administrator and the Nominee 

a person who is not a party to this Agreement has no right 

under the Contracts (Rights of Third Parties) Act 1999 to 

enforce any term of this Agreement, but this does not affect 

any right or remedy of such third party which exists or is 

available apart from that Act. 

25. SEVERABILITY 

If any term, condition or provision of this Agreement shall 

be held to be invalid, unlawful or unenforceable to any 

extent, such term, condition or provision shall not affect 

the validity, legality or enforceability of the remainder of 

this Investor’s Agreement. 

26. GOVERNING LAW 


This Investor’s Agreement and all matters relating thereto 

shall be governed by and construed in accordance with English 

Law and the parties submit to the exclusive jurisdiction of the 

English Courts. 


33


SCHEDULE 1 - INVESTMENT OBJECTIVES AND 

RESTRICTIONS 

Investment Objectives of the Fund 

To generate capital gains and (if the Investor has so indicated 

in his Application Form) to provide such Investors with the 

Tax Advantages associated with EIS Investments principally 

derived from investing in Solar Power Plants backed by the 

RO Scheme. 

Investment Restrictions of the Fund 

1 In carrying out its duties hereunder in respect of the Fund, 

regard shall be had, and all reasonable steps taken, by the 

Fund Manager to comply with such policies or restrictions 

as are required in respect of EIS Investments in order to 

attract the reliefs from taxation under the EIS as may be 

prescribed by HMRC from time to time. 

2 In particular, but without prejudice to the generality of 

the above statements, the restrictions for the Fund are 

as follows: 

(a) No more than 25% of the Subscription of an Investor (or 

£5 million at Fund level) will be invested in any one Investee 

Company at full fundraising provided that this shall not 

restrict the subsequent merger, acquisition or unitisation of 

Investee Companies with other Investee Companies. 

(b) Investors should be aware that the Fund’s Investments 

will include non-Readily Realisable Investments. There 

is a restricted market for such Investments and it may 

therefore be difficult to deal in the Investments or to obtain 

reliable information about their value; 

(c) in the event of a gradual realisation of Investments 

prior to termination of the Fund under Clause 15.1, the 

cash proceeds of realised EIS investments may be placed 

on deposit or invested in fixed interest government 

securities or other investments of a similar risk profile. 

Proceeds will be paid out on termination of the Fund or in 

instalments in advance of termination, as determined by 

the Fund Manager. 

SCHEDULE 2 - FEES AND EXPENSES IN RESPECT 

OF THE FUND 

The charges described below (other than the performance 

incentive fee) are payable by Investee Companies and not 

directly by the Fund to the Fund Manager. The percentages 

shown below will be applied to the amount invested in 

Investments made in each Investee Company. 

The fund management and annual charges will accrue from the 

date of acceptance of the Investor’s Application Form and will 

be payable quarterly in advance, with the first payment being 

on the date of investment in the relevant Investee Company. 

Fees and charges payable to the Fund Manager and 

remuneration payments to advisers that are not paid by 

Investee Companies will be recouped from the proceeds of sale 

of Investments or dividends received. 

VAT will be added where applicable. 


1 Initial Fundraising Charges 

The level of the fundraising charges payable to the Fund 

Manager reflects whether or not commission is payable 

to financial intermediaries. In certain limited situations, 

commission may be paid as described in more detail below: 


(no commission payable) payable immediately. 


(commission payable) payable immediately plus 

0.5% pa of Subscription 

for 4 years payable 

annually. 

To ensure fairness between Investors different numbers 

of Shares will be issued to Investors to reflect the 

different charge levels that may be payable in relation 

to Subscriptions of individual Investors. Although the 

amount of the fundraising charges should not reduce the 

EIS Relief available to Investors the fundraising charges 

payable by an Investor will reduce the value of the 

Portfolio of that Investor. 

The Fund Manager will receive the fundraising charges 

out of which will be paid all costs of establishing the Fund, 

including legal and taxation costs incurred in creating the 

Fund, the preparation and issue of this document and 

any other direct expenses wholly incurred in establishing 

the Fund. The fundraising charges will be settled by 

the Investee Companies from the gross proceeds of 

Investments to maximise the benefits from tax reliefs 

on the full amount invested. Charges payable to the 

authorised financial intermediary of an Investor to be 

facilitated by the Fund Manager will only be paid by prior 

agreement of the Investor and Adviser as noted on the 

Application Form. 

Authorised financial intermediaries may in certain 

situations be permitted to receive commission such as 

for execution only clients where no advice or personal 

recommendation has been given or for professional 

clients. In such permitted situations authorised financial 

intermediaries will be paid initial commission, usually 

at the rate of 3% of Subscriptions, plus annual trail 

commission at the rate of 0.5% of Subscriptions for a 

maximum of four years (inclusive of VAT). All commission 

will be paid from fundraising charges described above. 

If the Investor changes his/her adviser to whom annual 

commission is payable he/she should inform the 

Administrator of the details of his new adviser who will, 

subject to legal and regulatory requirements, be entitled to 

receive the annual trail commission instead. 

2 Annual Fund Management Charges 

Annual management charge 1.75% of the value 

of the Portfolio. 

Secretarial charge 0.3% of the value of the 

Portfolio (subject to an 

RPI linked* minimum of 

£60,000 in aggregate).

Foresight will bear any legal, accounting and other 

fees incurred by the Fund in connection with potential 

Investments which do not proceed to completion and 

may retain for its own benefit any arrangement fees 

and director’s or monitoring fees which it receives in 

connection with Investments. 

* The annual secretarial fee will be adjusted on 

31 August 2014 and annually thereafter (based on 

reference dates to be fixed by the Fund Manager) in line 

with the changes in the Retail Prices Index (‘RPI’) in each 

period in respect of which the payment is due. After the 

first year, the initial secretarial charge will be increased 

in line with any change in RPI between such dates as are 

fixed by the Fund Manager in that 12 month period. In each 

subsequent year, the base annual fee will be that which 

is increased by virtue of the previous RPI calculation and 

the RPI multiple used will be the difference between the 

first RPI reference date and last RPI reference date in 

each relevant 12 month period. Where there is an overall 

decrease in RPI in any 12 month period, the annual fee will 

remain unchanged from that for the previous year. The 

Fund Manager may choose a suitable alternative index to 

replace the RPI if such index is no longer published or 

is significantly changed. 

3 Performance Incentive 

Foresight will be entitled to a performance incentive fee, 

payable based upon the proceeds of realising Investments 

plus dividends payable to Investors. 

This fee, which will be deducted from realisation 

proceeds, is only payable once an Investor has received 

proceeds of at least £1 per £1 invested in Investments. 

The performance incentive fee is calculated as 20% of 

proceeds to the Investor in excess of £1 per £1 invested 

until total proceeds reach 120p per £1 and 30% above 

that level. 

The performance incentive fee may be obtained by 

subscriptions for Shares by or on behalf of the Fund 

Manager and its directors, employees and Associates or 

as a charge deducted from proceeds due to the Investor. 

In the event of the Investor making a withdrawal of Shares 

pursuant to clause 15.2, the Investor shall be liable for a 

charge equal to a fair amount determined by the Fund 

Manager in compensation for accrued performance 

incentive fees not obtained by subscriptions for Shares. 

4 Expenses 

The Fund Manager shall be entitled to charge each 

Investee Company a pro-rata proportion of expenses 

reasonably incurred by the Administrator in respect of the 

administration of the Fund. 

SCHEDULE 3 – EXECUTION POLICY FOR 

RETAIL CLIENTS 

Execution factors and execution criteria 

The Fund Manager has an obligation when executing orders on 

behalf of Investors to obtain the best possible outcome. 


The FCA requires various execution factors to be taken into 

account including price; cost; speed; market impact, likelihood 

of execution and settlement; size; or any other consideration 

relevant to the execution of the order. Price will ordinarily 

merit a high relative importance in obtaining the best possible 

result. However, in some circumstances, the Fund Manager 

may appropriately determine that other execution factors 

are more important than price in obtaining the best possible 

execution result. The Fund Manager will determine the relative 

importance of the execution factors by using its commercial 

judgement and experience in light of market information 

available and taking into account the execution criteria. 

The execution criteria are defined as the characteristics of the 

client, order (orders placed in the market will indicate a price 

range that is suitable for the investment decision), type of 

financial instrument (some shares are more liquid than others, 

and illiquid shares will be less easily tradable in volume) and the 

execution venue. 

The scope of activities undertaken by the Fund Manager does 

not currently include placing orders with brokers or dealers. 

Should the Fund Manager place orders with brokers or dealers 

for execution it will satisfy itself that the broker or dealer has 

arrangements in place to enable the Fund Manager to comply 

with its best execution obligations to its clients. Specific 

arrangements will be put in place such that brokers will confirm 

that they will treat the Fund Manager as a professional client 

and will therefore be obliged to provide best execution. 

Special purpose vehicles (‘SPVs’) 

The Fund Manager may establish special purpose vehicles 

as Investments. The Investors will be issued Shares in such 

SPVs. As shares in SPVs cannot be obtained from any other 

sources there is limited opportunity to apply some of the 

execution factors. 

Specific instructions 

Where an Investor has provided the Fund Manager with specific 

instructions regarding an order, the Fund Manager will execute 

the order in accordance with those specific instructions. 

Investors should be aware that providing specific instructions 

to the Fund Manager in relation to the execution of a particular 

order may prevent the Fund Manager from taking the steps set 

out in this execution policy to obtain the best possible result in 

respect of the elements covered by those instructions. 

Monitoring and review 

The Fund Manager will review the effectiveness of its execution 

policy and order execution arrangements on an annual basis. 

Whenever a material change occurs that affects the Fund 

Manager’s ability to continue to obtain the best possible result 

for the Investor, the Fund Manager will notify the Investor of 

any material changes to its execution arrangements or its 

execution policy by posting an updated version on its website. 

Consent 

The Fund Manager is required to obtain your consent to this 

policy. This will be demonstrated by your submission of a 

completed Application Form to the Fund Manager. 


35

APPENDIX 3: GLOSSARY 

IN THIS DOCUMENT THESE EXPRESSIONS AND ABBREVIATIONS HAVE THE FOLLOWING MEANINGS 

UNLESS THE CONTEXT OTHERWISE REQUIRES. 

“Administrator” Foresight Fund Managers Limited or such other person as the Fund Manager may from time 

to time appoint to provide administration and safe custody services in respect of the Fund; 

“Applicable Laws” all relevant laws, regulations and rules, including those of any government or of the FCA, in 

any applicable jurisdiction; 

“Application Form” an application form to participate in the Fund completed by a prospective Investor in the 

form provided by the Fund Manager; 

“Associate” any person or entity which (whether directly or indirectly) controls or is controlled by 

the Fund Manager or any parent company of the Fund Manager (for the purpose of this 

definition “control” shall refer to the ability to exercise significant influence over the 

operating or financial policies of any person or entity); 

“Business Investment Relief” tax relief available to non domiciled residents on untaxed overseas income or gains to invest 

the UK in Qualifying investments without making a taxable remittance 

“Business Property Relief” relief from IHT pursuant to sections 103-114 Inheritance Tax Act 1984; 

“Capital Gains Tax Deferral Relief” relief by way of deferral of CGT (Section 150C and Schedule 5B of the Taxation of Chargeable 

Gains Act 1992); 

“Carry Back Relief” as described on page 25 of the Information Memorandum; 

“CGT” capital gains tax; 

“Complying Fund” a complying fund within the meaning of Article 2 of the Schedule to the Financial Services 

and Markets Act 2000 (Collective Investment Schemes) Order 2001; 

“Closing Date” a date by which Subscriptions may be accepted by the Fund Manager for the creation 

of Portfolios; 

“EIS” Enterprise Investment Scheme, as set out in the Income Tax Act; 

“EIS Qualifying Company” a company that meets the EIS requirements regarding EIS Relief and Capital Gains Tax 

Deferral Relief; 

“EIS Relief” relief from income tax under EIS; 

“Feed-in Tariff” payment of a set sum to producers of electricity from a renewable system per level of 

electricity generated; 

“Foresight Group” comprises Foresight Group CI Limited, Foresight Group LLP and Foresight Fund 

Managers Limited; 

“Foresight or Fund Manager” Foresight Group LLP (a limited liability partnership registered in England under number 

OC300878 and whose registered office is at ECA Court, 24-26 South Park, Sevenoaks, 

Kent TN13 1DU; and any other subsidiary of Foresight Group CI Limited from time to time. 

“FCA” The Financial Conduct Authority; 

“FCA Rules” the FCA’s rules made under powers given to the FCA by FSMA; 

“FSMA” the Financial Services and Markets Act 2000, as amended from time to time; 

“Fund” the Foresight Solar EIS Fund 3 which describes the aggregate of all the Investors’ Agreements; 

“HMRC” HM Revenue & Customs; 

“IHT” Inheritance Tax; 

“Income Tax Act” Income Tax Act 2007; 

“Information Memorandum” this document; 

36 FORESIGHT SOLAR EIS FUND 3

“Investee Companies” companies in which the Fund invests (and each an “Investee Company”); 

“Investment” an investment made through the Fund (together the “Investments”); 

“Investor” an individual (and certain trustees) who complete(s) an Application Form which is accepted 

by the Fund Manager and so enters into an Investor’s Agreement; 

“Investor’s Agreement” an Investor’s agreement to be entered into by each Investor with the Fund Manager, in the 

terms set out in Appendix 2 of this Information Memorandum; 

“IPEVC Guidelines” the International Private Equity and Venture Capital Valuation Guidelines from time to time; 

“Loss Relief” relief in respect of income tax for allowable losses pursuant to section 131 of the Income 

Tax Act; 

“Nominee” Foresight Fund Managers Limited (a wholly owned subsidiary of the Fund Manager) or 

such other nominee as may be appointed by the Fund Manager from time to time to be the 

registered holder of Investments; 

“Portfolio” the portfolio of Investments and cash held by the Investor through the Fund; 

“Readily Realisable Investment” a government or public security denominated in the currency of the country of its issuer 

or any other security which is admitted to official listing on an Exchange in an EEA State, 

regularly traded on or under the rules of such an Exchange, or regularly traded on or under 

the rules of a recognised investment exchange or (except in relation to unsolicited realtime 

financial promotions) designated investment exchange, or a newly issued security which 

can reasonably be expected to fall within the above categories when it begins to be 

traded (this term does not include AIM or PLUS traded investments, nor does it include 

unlisted securities); 

“Receiving Agent” The City Partnership (UK) Limited of Thistle House, 21 Thistle Street, Edinburgh, EH2 1DF or 

such other receiving agent as may be appointed by the Fund Manager from time 

to time; 

“Renewable Obligation” the obligation on UK energy suppliers to source a specified proportion of the electricity that 

they supply to their customers from renewable sources; 

“Renewable Obligation Certificates” the certificates issued to renewable energy generators based on the amount of eligible 

or “ROCs” renewable electricity they generate; 

“RO Scheme” a financial mechanism legislated by the UK Government which incentivises deployment 

of large-scale renewable electricity generation through the sale of Renewable Obligation 

Certificates by accredited generators to UK energy suppliers; 

“Services” the services provided under Clause 4 of the Investor’s Agreement; 

“Shares” shares in an Investee Company subscribed for by the Fund on behalf of Investors; 

“Solar Power Plant” a system of solar panels which generates electricity from solar irradiation; 

APPENDIX 3: GLOSSARY 

“Subscription” a cash subscription to the Fund by way of an Application Form pursuant to clause 3 of the 

Investor’s Agreement; 

“Tax Advantages” the various tax advantages, including EIS Relief, arising from Investments in Shares in EIS 

Qualifying Companies; 

“Three Year Period” the period beginning on the date the Shares in an Investee Company are issued and 

ending three years after that date, or three years after the commencement of the Investee 

Company’s trade, whichever is later; 

“VCT” a company satisfying the requirements of Chapter 3 of Part 6 of the Income Tax Act for 

venture capital trusts. 


37

APPLICATION FORMS AND ADVISER CERTIFICATE 

APPLICATION FORM AND 

IMPORTANT NOTE 

The Application Form and these notes incorporate by 

reference the Information Memorandum. Unless otherwise 

stated or as the context shall otherwise require, defined 

terms and expressions used in the Application Form and 

these notes have the meanings ascribed to them in the 

Information Memorandum. 

The minimum investment is £10,000. 

If an application set out in an Application Form is not accepted, 

the Fund Manager will promptly notify the applicant and return 

the Subscription enclosed with the Application Form by post 

without interest and at the risk and cost of the applicant. The 

Fund Manager reserves the right not to process Applications 

immediately. Any interest arising pending acceptance of an 

Application shall accrue for the benefit of the Fund Manager. 

WHO CAN APPLY? 

You can only apply if your financial adviser has certified that 

participation in the Fund meets your objectives, you have the 

expertise, experience and knowledge to understand the risks 

and that you are able to bear the associated risk involved in 

participating in the Fund. 

Business Investment Relief 

If you are a non domiciled resident and intend to apply using 

Business Investment Relief Scheme, call 01732 471812 for a 

bespoke application form. 

Please note that applications will only be accepted if they are 

submitted countersigned by a financial intermediary authorised 

and regulated by the FCA. 

Foresight reserves the right to accept Application Forms without 

an Adviser Certificate if it is satisfied with all applicable legal 

and regulatory requirements. 

INDEPENDENT FINANCIAL ADVICE, ASSESSMENT 

AND CUSTOMER DUE DILIGENCE PROCEDURES 

You must arrange for a financial adviser, authorised by the 

Financial Conduct Authority, to carry out: 

(i) An assessment that you are capable of making your own 

investment decisions and understand the risks involved in 

participating in the Fund; and 

(ii) the customer due diligence procedures required by The 

Money Laundering Regulations 2007 within the guidance 

for the UK Financial Sector issued by the Joint Money 

Laundering Steering Group 

Your financial adviser must provide the Adviser Certificate set 

out at the end of this document. 


INSTRUCTIONS FOR COMPLETING THIS 

APPLICATION FORM 

Before completing this Application Form, please carefully review 

the following documents: 

• The Information Memorandum; and 

• the Investor’s Agreement. 

Then follow the steps listed 1 - 6 below. 

1. Please complete the form in type or use BLOCK CAPITALS 

(save for your signature) in black/blue permanent ink, and 

sign any changes you make. Do not erase any text or use 

white-out. If you have any queries, please contact Foresight 

on 01732 471812. 

2. Arrange for a financial adviser, authorised by the Financial 

Conduct Authority, to complete boxes 4–8 and to carry out 

the assessments and customer due diligence measures 

referred to above and to execute the Adviser Certificate. 

3. Complete the ‘Authorised Intermediary Remuneration’ box 

with details of any charges that you have agreed with your 

authorised financial adviser and that you wish Foresight to 

facilitate or by ticking the commission box if that applies. 

Please initial beside the amount or percentage entered as 

confirmation of your agreement. 

4. Execute and date the Application Form. 

5. Send the entire Application Form, your signed Adviser 

certificate and cheque made payable to ‘The City 

Partnership - Foresight SE3’ by post to the Receiving Agent 

using the following address: 

The City Partnership (UK) Limited 

Thistle House, 21 Thistle Street 

Edinburgh EH2 1DF 

Bank transfers should be paid to 

Sort code: 80-22-60 A/c no: 11256562 

A/c Name: The City Partnership-Foresight SE3 

Bank: Bank of Scotland 

SWIFT: BOFSGB25 

IBAN: GB09 BOFS 8022 6011 2565 62 

Please reference bank transfers with your surname 

and initials. 

6. Retain a copy of the completed Application Form.


PRIVATE INVESTORS 

Before completing this Application Form you should read the Acknowledgements and Representations overleaf, and by completing 

this Application Form you are entering into the Acknowledgements and Representations in favour of Foresight and the Receiving 

Agent. Once completed in full, please attach your cheque made payable to ‘The City Partnership - Foresight SE3’ and send by post to 

The City Partnership (UK) Limited, Thistle House, 21 Thistle Street, Edinburgh EH2 1DF . 

Cheques: make payable to ‘The City Partnership - Foresight SE3’ 

Bank Transfers: Sort code: 80-22-60 A/c no: 11256562 Bank: Bank of Scotland SWIFT: BOFSGB25 IBAN: GB09 BOFS 8022 6011 2565 62 

Foresight will decide, in its absolute discretion, to accept or reject the application and will notify you of its decision. No Application Form 

will be accepted by Foresight until it has received the relevant Adviser certificate or is satisfied with all applicable legal and regulatory 

requirements and it has issued a written confirmation of acceptance. 

IF YOU DO NOT RECEIVE AN ACKNOWLEDGEMENT OF YOUR APPLICATION WITHIN TEN DAYS OF 

SENDING IT TO THE CITY PARTNERSHIP, PLEASE CONTACT FORESIGHT ON 01732 471812. 

BOX 1 PLEASE COMPLETE THE FOLLOWING 

Title: Forename(s): Surname: 

Date of Birth: Nationality: 

NI No (mandatory): Town & Country of Birth: 

Permanent Residential Address: 

Post Code: 

Daytime Phone: Email: 

Tax Ref No: Tax District: 

Length of occupation at the address above: If 3 years or less then please provide your previous address: 

Post Code: 

BOX 2 AUTHORISED INTERMEDIARY REMUNERATION (YOU MUST ELECT ONE OF THE TWO OPTIONS) 

Either: Details of agreed adviser charges to be facilitated 

Amount of upfront charges: Amount of ongoing charges: 

Fixed Amount £ Fixed Amount £ 

Percentage % Percentage % 

Note: Any sums used to facilitate Adviser Charges are deducted before funds are invested in EIS Companies and therefore do not 

qualify for EIS Relief while the Manager’s Fundraising Charges are deducted after investment and thus may qualify for EIS Relief. 

For further details on charges, please refer to page 8 of this document. If you request us to facilitate charges on a percentage basis 

any charges, initial or ongoing, will be calculated as a percentage of the funds you invest in the Foresight Solar EIS Fund 3. 

BOX 3 INVEST IN THE FORESIGHT SOLAR EIS FUND 3 

I hereby apply to invest £ (In figures) in the Foresight Solar EIS Fund 3 

I do not wish to seek EIS Relief If you do not tick this box, we will assume that you wish to seek EIS Relief 

Signature: Date: 

Any ongoing charges will 

apply for the duration of your 

investment unless you specify 

a defined period below 

Or: My intermediary is entitled to commission payable by Foresight as detailed in the Information Memorandum 

Yrs 


39

ACKNOWLEDGEMENTS 

AND REPRESENTATIONS 

a If your application is accepted, you agree to observe, perform 

and be bound by the provisions of the Investor’s Agreement. 

b You confirm and warrant that you personally possess 

sufficient knowledge, experience and expertise in financial and 

business matters (including experience with investments of a 

similar nature to an investment in the Fund) to be capable of 

evaluating the merits and risks of participating in the Fund is 

suitable for you. 

c If you have completed Box 2 of the Application Form with 

details of agreed adviser charges to be facilitated, you confirm 

that you have consulted a financial adviser in respect of your 

investment in the Fund and that such financial adviser has 

confirmed that participating in the Fund is suitable for you and 

the amount indicated in the ‘either’ option in box 2 has been 

agreed with your authorised Adviser and that Foresight may 

facilitate such payments on your behalf. If your Application 

Form is not accompanied by an Adviser Certificate you 

acknowledge that the Fund Manager is required by the FCA 

Rules to ensure that investment in the Fund is suitable for you 

before it can accept the Application Form and that you will 

supply the Fund Manager with any information requested to 

enable the Fund Manager to investigate suitability. 

d You represent and warrant that you have reached the age 

of majority under the laws of your country of nationality or 

domicile; and this application, upon acceptance by the Fund 

Manager, will be your legal, valid and binding obligation, 

enforceable against you in accordance with the terms of the 


e You acknowledge that this Application Form is not transferable 

or assignable. 

f You confirm your agreement that this Application Form be 

governed by and construed in accordance with the laws 

of England and Wales and that the courts of England and 

Wales shall have exclusive jurisdiction to hear and determine 

any suit, action or proceedings and to settle any disputes 

which may arise out of or in connection with this Application 

Form and, for such purposes, you irrevocably submit to the 

jurisdiction of such courts. In addition, you irrevocably waive 

any objection which you might now or hereafter have to the 

courts of England and Wales being nominated as the forum to 

hear and determine any such suit, action or proceedings and 

to settle any such disputes, and agree not to claim that any 

such court is not a convenient or appropriate forum. 

g You confirm that you will, at the request of the Fund Manager, 

forthwith enter into and execute such formal deeds of 

adherence whereby you will agree to observe, perform and be 

bound by the provisions of the Investor’s Agreement as the 

Fund Manager may require. 

h You agree that the foregoing representations, warranties, 

agreements and acknowledgments shall survive the date of 

your admission to the Fund and this Application Form shall be 

binding upon and inure to the benefit of the parties and their 

successors and permitted assignees. 


i You agree that if this application is made by more than 

one person, your obligations shall be joint and several 

and the representations, warranties, agreements and 

acknowledgments herein shall be deemed to be made by 

and be binding upon such persons and their successors 

and assignees. 

j You agree that any term or provision of this Application Form 

which is invalid or unenforceable in any jurisdiction shall, as to 

such jurisdiction, be ineffective to the extent of such invalidity 

or unenforceability without rendering invalid or unenforceable 

the remaining terms or provisions of this Application Form or 

affecting the validity or enforceability of any of the terms or 

provisions of this Application Form in any other jurisdiction. 

k You undertake to notify the Fund Manager immediately 

if there are ever relevant circumstances of which the 

Fund Manager should be aware in relation to managing 

your Portfolio(s). 

l You confirm, in relation to your participation in the Fund, that: 

• you wish/do not wish to seek EIS Relief as indicated on your 

Application Form; 

• you are applying on your own behalf; 

• you will notify the Fund Manager of any Investment with 

which you are connected within section 163 and sections 166 

to 177 of the Income Tax Act; and 

• you will notify the Fund Manager if, within three years of the 

date of issue of Shares by an EIS Qualifying Company, you 

become connected with that EIS Qualifying Company or 

receive value from it. 

m You confirm that you will provide all information required 

by the Fund Manager and the Receiving Agent to comply 

with all applicable anti money laundering regulations 

(including the Proceeds of Crime Act 2002 and the Money 

Laundering Regulations 2007 (“ML Rules”) and acknowledge 

that the Application Form will not be accepted unless the 

Fund Manager is satisfied (in its absolute discretion) with 

compliance with the ML Rules in relation to you and 

your application. 

n You confirm that if an Application Form is not accepted the 

obligations of the Fund Manager and the Receiving Agent to 

return any application monies (which will be returned without 

interest) will be subject to the ML Rules.


AUTHORISED INTERMEDIARIES 

Email: 

BOX 4 TO BE COMPLETED BY THE INVESTOR’S AUTHORISED INTERMEDIARY 

Firm Name: 

Contact Name: 

Address: 

Telephone: Fax: 

Email: 

FCA registration no: 


Post Code: 

BOX 5 INTERMEDIARY REMUNERATION (YOU MUST ELECT ONE OF THE TWO OPTIONS) 

Either: Tick this box if you are entitled to receive commission 

Reason: 

Or: Tick this box if Adviser Charges have been agreed with your client and comply with COBS 6.1A 

BOX 6 BANK DETAILS 

Please provide details of your bank or building society account for Adviser Charges or commission (as applicable) 

Account Name: Bank/Building Society: 

Sort Code: – – Account Number 

FORESIGHT SOLAR EIS EIS FUND FUND 3 

41 45


AUTHORISED INTERMEDIARIES CONTINUED 

BOX 7 COMMISSION WAIVER DETAILS (ONLY COMPLETE IF COMMISSION SELECTED IN BOX 5) 

Initial commission waived will be invested in Foresight Solar EIS Fund 3 for your client. 

Please insert the amount of commission you wish to be waived in the box. 

BOX 8 SPECIAL INSTRUCTIONS 

By submitting this application form: 

i. I agree that I have read and understood the Foresight 

Group Terms of Business for Intermediaries and that I 

agree to be bound by such Terms of Business; 


ii. To the extent I am an Appointed Representative, 

I warrant and represent that my principal has also 

accepted the Foresight Group Terms of Business 

for Intermediaries. 

%


ADVISER CERTIFICATE 

TO BE COMPLETED BY THE INVESTOR’S FINANCIAL ADVISER 

WE CERTIFY TO FORESIGHT GROUP LLP AND THE CITY PARTNERSHIP LTD (AS APPLICABLE) IN 

THE TERMS OF PARAGRAPHS 1 TO 4 BELOW: 

1. We have undertaken an adequate assessment of the Investor’s expertise, experience and knowledge and certify that, in the 

light of the nature of the transactions or services envisaged, that an investment in the Foresight Solar EIS Fund 3 is suitable 

for them. 

2. We have applied customer due diligence measures on a risk-sensitive basis in respect of the Investor to the standard 

required by The Money Laundering Regulations 2007 within the guidance for the UK Financial Sector issued by the Joint 

Money Laundering Steering Group and we certify that we have: 

(a) identified and verified the identity of the Investor on the basis of documents, data and information obtained from a 

reliable and independent source; 

(b) we have obtained information on the Investor’s occupation and the source of funds to be used for the Investor’s 

proposed investment in the Foresight Solar EIS Fund 3; 

(c) identified, where there is a beneficial owner who is not the Investor, the beneficial owner and have taken adequate 

measures, on the basis of documents, data and information obtained from a reliable and independent source, to verify his 

identity so that we know who the beneficial owner is, including, in the case of a legal person, trust or similar arrangement, 

measures to understand the ownership and control structure of the person, trust or arrangement and the identity of the 

beneficial owner and details of the ownership and control structure are set out in the Schedule hereto; and 

(d) obtained information on the purpose and intended nature of the Investor’s proposed investment in the Foresight Solar 

EIS Fund 3, as the case may be, which information is set out in the Schedule hereto. 

3. We understand that the Receiving Agent has obligations under the Money Laundering Regulations 2007 and will cooperate 

with the Receiving Agent in the event of a request for copies of the due diligence materials we hold in respect of the 

Investor, and that we will provide the same within two business days of a request (see notes below). We acknowledge 

and agree that such request may cause us to request additional information from the Investor, and that the Receiving 

Agent reserves the right to contact the Investor directly in the event that all information is not provided within the above 

timeframe. We confirm that both we and the Investor are aware of and understand that failure to provide the information 

requested may cause the Receiving Agent to reject the application. 

4. At any time during the life of the Investor’s investment in the Foresight Solar EIS Fund 3, we will advise the Fund Manager 

immediately should our relationship with the Investor terminate. 


43


ADVISER CERTIFICATE 

Email: 

WE CONSENT TO FORESIGHT LLP AND THE CITY PARTNERSHIP (UK) LTD RELYING ON THIS 

CERTIFICATE 

Firm Name: 

Contact Name: 

Address: 

Telephone: Fax: 

Email: 

FCA registration no: 


PLEASE COMPLETE: 

We have applied customer due diligence measures on a risk-sensitive basis in respect of the Investor to the standard required 

by The Money Laundering Regulations 2007 within the guidance for the UK Financial Sector issued by the Joint Money 

Laundering Steering Group and we certify that we have identified that the beneficial owner is: 

and (in the case of a legal person, trust or similar arrangement), the ownership and control structure of the person, trust or 

arrangement is: 

The purpose of the investment is: 

NOTES 


Post Code:

DIRECTORY 

FUND MANAGER & PROMOTER 

Foresight Group LLP 

ECA Court 

24-26 South Park 

Sevenoaks 

Kent 

TN13 1DU 

T: 01732 471 800 

E: info@foresightgroup.eu 

W: www.foresightgroup.eu 

RECEIVING AGENT 

The City Partnership (UK) Limited 

Thistle House 

21 Thistle Street 

Edinburgh 

EH2 1DF 

T: 0131 243 7210 

W: www.city.uk.com 

ADMINISTRATOR & NOMINEE 

Foresight Fund Managers Limited 

ECA Court 

24-26 South Park 

Sevenoaks 

Kent 

TN13 1DU 

T: 01732 471 800 

E: info@foresightgroup.eu 

W: www.foresightgroup.eu 

SOLICITORS & TAX ADVISERS 

SGH Martineau LLP 

No.1 Colmore Square 

Birmingham 

B4 6AA 

T: 0800 763 1000 

W: www.sghmartineau.com 


45

Foresight Group 

ECA Court 

24–26 South Park 

Sevenoaks 

Kent 

TN13 1DU 

United Kingdom 

t:+44 (0) 1732 471800 

f:+44 (0) 1732 471810 

www.foresightgroup.eu 

This publication is printed on paper sourced from certified sustainable forests. 

Designed and produced by Fat Media.

Information Memorandum - Foresight Group

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