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Thought Leadership As venture capital is a long term asset class, with a high level of investment risk at an individual company level, it’s for investors who understand that losses will happen within their overall portfolio and that they may often have to wait patiently for the good investments to come through. An allocation to venture should be from money that the client isn’t relying on in the short to medium term. Even within the venture portfolio, diversification is key. It’s wise to diversify over time as well as over sectors and sub-sectors. Clients should therefore be able to commit to investing most, if not all, years over a period of several years. If things go well, exits should start coming through within that horizon, providing the cashflow, if required, to fund the next five years – and so on. If you consider that doubling one’s money over five years pre-tax represents an almost three-times multiple post-tax, it’s easy to see how an ongoing investment programme can become self-financing. In considering suitability, therefore, it’s likely that the client will have: • a sophisticated grasp of business and investment; a sophisticated grasp of business and investment • the appetite to assume risk; and • a long term investment horizon. Particularly, the client will need to be prepared for early losses within the venture capital portfolio, often coming through before the profits. How are advisers using EIS investments? Investors can choose from a variety of routes if they want to access EIS investments. As well as funds, they may look at single company EIS opportunities, whether on a rifleshot basis, as part of a portfolio service, or through equity crowdfunding sites. However it’s done, the challenges of building a portfolio one company at a time are not to be underestimated and few advisers have the expertise or indeed time to advise clients on the suitability of single company EIS investments. As a result, advisers rightly tend to focus on EIS funds. Advisers have been quick to appreciate the value of EIS funds as a tax planning tool, but unfortunately this has too often been reflected in a desire for structured products with supposedly low levels of investment risk. With a growing realisation in the market that EIS is getting back to its roots as a measure specific to growth companies, its effectiveness as a tax-planning tool remains, but advisers are having to think a bit harder about portfolio theory. Considered as a stand-alone investment, venture capital is risky. Considered as part of a well-diversified portfolio, venture capital investment in the form of subscriptions to EIS funds has little or no effect on overall risk and can materially enhance portfolio returns on a posttax basis – even before the returns from the venture capital investments are factored in. the appetite to assume risk a long term investment horizon 22 EIS Yearbook 2016/17
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Page 1 and 2: FOR PROFESSIONAL INVESTMENT ADVISER
Page 3 and 4: CONTENTS CHAPTER • 1 Foreword Mar
Page 5 and 6: The Blackfinch Asset Focused EIS Po
Page 7 and 8: LOOKING BEYOND BREXIT Welcome to EI
Page 9 and 10: THOUGHT LEADERSHIP
Page 11 and 12: Thought Leadership The summer of 20
Page 13 and 14: Thought Leadership Let’s not be s
Page 15 and 16: Thought Leadership In fact, much of
Page 17 and 18: Thought Leadership RISK EQUALS REWA
Page 19 and 20: Thought Leadership budget and appet
Page 21: Thought Leadership to see taxes for
Page 25 and 26: Thought Leadership The more you kno
Page 27 and 28: Thought Leadership investing larger
Page 29 and 30: Thought Leadership Start-ups are us
Page 31 and 32: Thought Leadership Considerations f
Page 33 and 34: Thought Leadership crowdfunding pla
Page 35 and 36: Thought Leadership A valuable addit
Page 37 and 38: INVESTMENT SPOTLIGHT
Page 39 and 40: Investment Spotlight A BIRD’S EYE
Page 41: Investment Spotlight ACTION! UK FIL
Page 44 and 45: Make It Your Business Toil. Hard gr
Page 46 and 47: Helping you support your clients’
Page 49 and 50: Investment Spotlight INVESTING IN T
Page 51 and 52: Investment Spotlight THE INSIDE TRA
Page 53 and 54: Investment Spotlight DISRUPTING THE
Page 55 and 56: Investment Spotlight DIVERSIFICATIO
Page 57 and 58: Investment Spotlight GROWING THROUG
Page 59 and 60: ENHANCED PROFILES
Page 61 and 62: Enhanced Profiles USPs • Reputati
Page 63 and 64: Enhanced Profiles USPs • Over 20
Page 65 and 66: Enhanced Profiles USPs • Two spec
Page 67 and 68: Enhanced Profiles INVESTMENT STRATE
Page 69 and 70: Enhanced Profiles USPs • A ‘com
Page 71 and 72: Enhanced Profiles USPs • Sector e
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Enhanced Profiles USPs • Hands-on
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Directory ACCELERIS CAPITAL Norman
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Directory DAEDALUS PARTNERS LLP Gav
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Directory JOULE ASSETS EUROPE Jessi
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Directory SENECA Jack Rose, LGBR Ca
Page 83 and 84:
INFORMATION MEMORANDUM For further
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Open Offers EIS Open December 2015
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Open Offers Open 05/09/2016 Minimum
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Open Offers EIS Open 06/09/2016 Clo
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Open Offers SEIS Open 17/01/2014 Cl
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Open Offers IHT Open October 2014 C
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IFAMAGAZINE.COM EISMAGAZINE.COM FAN
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