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Q. What are your preferred sectors
for EIS investment? (Top 3)
A. 83% of investors surveyed said that
Technology was one of their top three
preferred sectors for EIS investment,
followed by 33% for Entertainment and
Media. Technology is one of the best
established EIS investment sectors with a
huge range of investment opportunities
available which can possibly explain why
so many investors prefer this sector –
and as a sector with many exciting small
start-ups, it also presents the prospect
of excellent returns if somebody can
identify the next Google or Facebook. 50%
of investors said that the sector is not
as important as the specific investment
opportunity. This highlights again how the
quality of information and the potential
returns on offer has a big influence
on the decision making process.
Q. Do you feel there is enough
competition in the EIS market?
A. 64% of investors felt that there is
currently enough competition in the EIS
market, compared to 36% who believe
there is not enough competition. These
results were very close to the responses
advisers gave. Increased competition should
create a better environment for investors,
leading to more openness and transparency
and ultimately better quality investment
opportunities. Respondents feel that there
is too much dominance by the largest three
EIS managers and EIS managers do not
always take on enough risk. There is also
a feeling that single company investments
need more promotion and are often
overshadowed by portfolio offerings.
Q. Do you feel EIS managers provide
enough historical performance data?
A. Despite the substantial size of the EIS
market over two thirds (70%) of investors
feel there is not enough historical
performance data made available from
EIS managers. The quality of available
information has been an important theme
throughout these survey responses.
The lack of coverage in the EIS market
is felt by many investors and there is
some way to go to create a more open
and transparent marketplace. This
may explain this groups’ preference
for single company EIS investments.
Q. Do you feel that there are enough
resources and information available to
enable you to understand the EIS market?
A. Along with the need to have specific
information on each investment
proposition, there is also a need to be
educated on the EIS market as a whole.
Knowledge is required to understand the
tax reliefs available, the risks associated
with investing in unlisted companies and
the often complex investment process.
60% of investors feel that they have access
to enough information to understand
the market, while 30% believe there is
not enough information available and a
further 10% are not sure. There is definitely
scope to further educate investors
on the EIS market, but interestingly
investors felt differently to advisers –
72% of advisers felt that there was NOT
enough information available, perhaps
reflecting their need for more information
in order to comply with regulations.
SECTOR
PREFERENCE
(INVESTOR):
25%
8%
17%
25%
33%
83%
8%
