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Investment Spotlight
THE INSIDE TRACK ON HIGH-TECH
EIS INVESTMENTS
Paul Mattick of Mercia Fund Management explains why having expert investment
directors is a must in high technology areas
Mercia Fund Management doesn’t just invest in companies,
it gets under the skin of them by recruiting people who are
specialists in a number of fields.
The company specialises in a broad range of high
technology sectors, from digital and digital entertainment
to software, life sciences and bio-sciences and through to
electronics, materials, manufacturing and engineering.
Former Olympic rower and entrepreneur Paul Mattick is
in charge of the company’s private fundraising team and
oversees the performance of the tax-efficient funds, as well
as managing the investor relations side of the business,
working with investors and a growing network of advisers.
Mattick said that key to Mercia’s success is recruiting the
right people from the industries the funds focus on.
“Mercia’s strategy is to recruit the top people from these
industries, all of whom will have a track record of building
and selling large companies, and who can leverage their
extensive personal networks to help drive the growth of
the portfolio,” he said.
“Investment directors of this calibre add considerable
strategic value to early stage businesses and can make
C-Level introductions (with high ranking executives), some
of which can be the biggest companies in their market.”
As to how EIS investments can help diversify client
portfolios, Mattick said: “The make-up of the portfolio is
not one which is typically associated with investing, and so
opens up exciting opportunities to support businesses at
the leading edge of new technologies. Investing in Mercia’s
Growth Funds therefore enables individuals to get close to
a diversified portfolio within rapidly growing sectors with
significant potential for high returns.”
Mercia runs a broad engagement policy with advisers,
helping them educate their clients about the investment
opportunities in EIS. In some cases, they provide CPDqualifying
events for networks, so that an adviser can fully
comprehend the complexities of EIS investments.
“EIS is not a simple area, but investing in a high performing
EIS funds with low fees and several notable exits can
provide significant value for an adviser’s clients. Advisers
who provide services of this type to their clients are offering
a premium service that provides added value in a crowded
market,” said Mattick.
Nor does Mattick believe that Brexit has affected their
portfolio companies significantly. Instead, he said, it is
more likely to impact on the low-cost service industries.
It is their belief that current EU legislation is unlikely to
change as the UK will aim to replicate similar legislation
following Brexit.
“The most important sectors – including the high
technology industries that EIS is designed to support
– remain the same. Any other areas will be sequentially
excluded by the government (as has been seen with solar
and other asset-backed investments) so that tax efficient
money is focused on areas that have the most impact on
UK GDP.”
EIS Yearbook 2016/17
51