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The second survey undertaken as part
of this report focused on investors,
with the aim of identifying their feelings
towards EIS managers and investment
opportunities. These results will also
allow us to see whether advisers’ and
investors’ views support each other
and where their views differ.
The survey was sent out by a third
party
to their
database of 6,000 private investors
which included a mixture of HNW and
sophisticated individuals and ordinary
retail investors. It should be noted
that a large number of those surveyed
are very knowledgeable investors and
are likely to have had some previous
knowledge or experience of this sector.
INTENTION OF THE SURVEY
The intention of this survey was to see
how investors perceive the EIS sector:
do they invest; how do they invest; what
opportunities interest them; the types
of investment structures and strategies
they prefer; the criteria they use when
considering a potential investment;
their investment objectives and how EIS
investments meet these objectives.
As with the adviser survey, this survey did
not focus on specific managers and is not
aimed to feed information back to managers
about their position in the market. The
survey has been undertaken independently
in order to gather detailed information
on the EIS sector to support the adviser
survey and for inclusion in this report.
Our hope is that these responses will
echo the adviser survey and will help
to shape future offerings in the market,
helping EIS managers to develop their
propositions and deliver products
that meet the needs of investors.
The survey included less than 20
questions and was relatively similar
in nature to the adviser survey. The
most relevant questions have been
included in the analysis that follows.
PRIVATE INVESTOR SURVEY
Q. Do you currently hold any Enterprise
Investment Schemes (EIS) Investments?
A. The enterprise investment scheme aims
to help smaller higher risk companies raise
funds from private investors, with investors
receiving tax incentives and the possibility
of strong returns to somewhat offset the
risks involved. We wanted to gauge how
many investors surveyed currently hold an
EIS qualifying investment. 61% of investors
surveyed said that they currently hold an EIS
investment, compared to the 35% that do
not. These results are not representative of
the whole population but they do show that
EIS investments are very popular among
the sophisticated investor community.
Q. Have you ever considered
investing in an EIS?
A. Investors who currently hold an EIS
investment were then asked whether
they would consider investing in an EIS
again in the future. 93% said that they
would consider investing again in the
future and only 7% said they wouldn’t.
We can speculate that this positive
response could stem from previously
good experience with EIS investments,
a good relationship with the investment
manager or from the numerous benefits
that EIS investments can offer such as
portfolio diversification; generous tax
reliefs and the potential for high returns
which can be hard to come by elsewhere.
What it does show is that there is a lot
of mileage for providers in returning to
current investors with new opportunities,
as well as trying to find new investors.
Q. Please state your
investment experience.
A. 67% of respondents to the survey
classed themselves as sophisticated
and the remaining 33% as reasonably
experienced. No one who completed the
survey classed themselves as having little
or no investment experience and therefore
it is likely that every respondent has at
least a good understanding of the market.
