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CHALLENGES AND LIMITATIONS
It is also important to note that
there are some limitations with our
data collection process that have an
impact upon the final analysis.
Firstly, the information included in our
investment register is limited to those
investments that are openly marketed
that we were able to identify. There is no
central register for EIS investments (we did
enquire with HMRC, who are responsible
for administering the tax benefits, but
they do not publish a central register) so
ultimately we simply don’t know what we
don’t know – there could be a number of EIS
investments that are not widely marketed
that we have not captured as part of our
analysis process. However, our view is that
although this information is not included,
it is not essential – if these opportunities
are not widely marketed and available, then
there is no need for them to form part of
most advisers’ and investors’ thinking.
Secondly, unfortunately not all of the
EIS investment providers engaged with
the data verification process. Every EIS
manager and provider was given the
opportunity to participate, and it was very
encouraging to receive a high response
rate, but inevitably there were a number
that chose not to participate – perhaps
due to understandable apprehensions
about disclosing commercially sensitive
information for inclusion in a new and
unfamiliar report. Again, we feel that
although in some cases this verification
is missing, it is not essential. Provided
that those managers’ publicly available
information was accurate, then the
data in the register will be accurate.
Finally, our data collection process means
that there is an in-built bias towards the
most recent investment opportunities
as these are the easiest to identify and
collect data on. We’re not able to quantify
the impact of this, but experience tells
us that the more recent the data the
more accurate the analysis can be.
Our hope is that as this report becomes
better established and can show a
track record of helping to grow the EIS
market, more managers will participate
with the data collection exercise.
Broader participation can only
improve the quality and accuracy
of our investment register.
