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Investment Spotlight
EIS AND THE PIVOTAL ROLE OF ADVICE
When it comes to being entrepreneurial, Paul Soanes, Co-founder of Worth Capital
has been there and got the t-shirt. He explains to Neil Martin the importance of EIS and
how clients are encouraging advisers to get on board
Worth Capital is a fund managed by Amersham Investment
Management that has a slightly different approach from
many other EIS specialists.
Co-founder of Worth Capital Paul Soanes said: “We have
two target sets of investors. One is sophisticated investors,
who are savvy on tax reliefs and the risks associated with
start-up capital, and secondly, advisers.
“We are a relatively new business and we think advisers
are pivotal to the long-term health and success of our
business. Mainly because we in the SEIS and EIS world are
slightly under-represented with advisers; there’s been low
hanging fruit in terms of investment opportunities over the
years, but now we’re in this lower interest rate environment,
and SEIS and EIS funds can offer a much better return on
investment potentially.”
He said there are a number of good EIS fund managers
already in operation who have launched a series of funds
over the past five years but “we feel that there is room for
innovation and that requires education on our part and the
advisers part”.
Soanes left university in 1994 and used his entrepreneurial
spirit to found iD, growing it into a top 10 UK experiential
marketing agency. From there he established Brandspace,
Europe’s largest promotional space media agency and
returned initial backers 17 times their original investment
within five years. As a highly experienced seed investor, he
has invested in over 25 businesses since 2008.
He believes that the fact the four founders of Worth are
successful entrepreneurs, who have made numerous SEIS
and EIS investments, makes a difference.
“It’s an edge. How much of an edge we don’t know at this
stage, but, effectively this is all about stock picking; you
pick the best investments, of which there are probably, in
the SEIS and EIS world, at any point in time, a couple of
thousand businesses and funds raising money.
“We run a series of competitions that gives us a trawl of
that overall market. It’s definitely an appeal that we’ve built
and sold businesses ourselves; we’ve gone through all that
pain, it does give you a bit of an edge in being able to spot
that kind of X-factor in an entrepreneur.”
Worth Capital invests purely in consumer businesses: the
products and services people buy and the way that they
buy them and Soanes believes EIS investment can help
diversify a client’s portfolio.
“Numbers from the EIS Association show that many
more advisers are suggesting alternative investments,”
he said. “This is hardly surprising given yields on savings
are at record lows and pensions are being squeezed. With
the generous tax reliefs available through SEIS and EIS
becoming better understood by clients, it will be the client
asking for them to be in consideration if not offered first by
the adviser.”
Soanes believes the role of the adviser is pivotal, and that
there are a number of ways they can educate their clients
about investment opportunities in EIS. He thinks the role
of the adviser is to educate clients on the landscape of
EIS and SEIS funds and secondly, to give them a broad
understanding of what investment classes are available;
from relatively steady EIS funds providing growth capital
to more established businesses, through to SEIS funds
investing in very young businesses.
EIS Yearbook 2016/17
43