BR report 2018

62 63 “BR funds are investing into small companies that are paying taxes and boosting the economy. It doesn’t take much to demonstrate that there’s a net revenue take for HMRC.” — LAURENCE CALLCUT, DOWNING CURRENT FUNDRAISE MINIMUM SUBSCRIPTION The average current fundraise for new 2017/18 offers was over £17m, with the largest fundraise being nearly £58m. Two of the new offers are yet to raise any investment. Last year, the average fundraise for 2016/17 offers was approximately £1.8m and the largest fundraise was £3.4m. The average Minimum Subscription for new offers was £40,714, with the most common charge being £50,000. The average minimum subscription for last year’s offers was £13,810. However, these offers may have had a lower Minimum Subscription in relation to the proliferation of ISA eligible AIM offers - which clearly would have to have a lower Minimum Subscription in order to be in line with ISA limits. HISTORICAL OFFERS HISTORICAL OFFERS 2017/18 OFFERS 2017/18 OFFERS £70M £30M £50M £10M £60M £20M £40M £0 AVG MODE MIN MEDIAN MAX £57,737,000 £13,470,000 £17,015,286 £2,000M £2,500M £1,000M £1,500M £500M £0 AVG MODE MIN MEDIAN MAX £128,611,270 £51,000,000 £0 £45,000,000 £2,416,540,000 £60,000 £100,000 £20,000 £120,000 £40,000 £80,000 £0 AVG MODE MIN MEDIAN MAX £40,714 £50,000 £15,000 £40,000 £90,000 £100,000 £200,000 £300,000 £400,000 £600,000 £500,000 £0 AVG MODE MIN MEDIAN MAX £52,410 £25,000 £5,000 £40,000 £500,000 TARGET RETURNS DIVERSIFICATION Average Target Return for the Capital Preservation & Growth strategy was 6.5% for 2017/18 offers - this compares with 4.07% for historical offers. There were no pure play Growth offers for 2017/18 that indicated a Target Return, but Growth & Income offers had an average Target Return of 7%. Historical Growth & Income offers had an average Target Return of 6.6%. While the new BR offers are targeting higher returns, the Annual Performance Fees have fallen, which plays in investors’ favour. The level of diversification in BR offers is measured by the amount of investee companies that the BR product intends to invest in. On average, new BR offers opened in 2017/18 invested in a single company. However, this is misleading as, this company holds the shares of multiple underlying investee companies. 2017/18 offers that had a Growth strategy invested in 20 companies on average - the average for historical offers is 26.5. The growth strategy has a much higher proportion of companies invested, as they tend to be focused on AIM portfolios. AVG MODE MIN MEDIAN MAX AVG MODE MIN MEDIAN MAX HISTORICAL OFFERS 2017/18 OFFERS HISTORICAL OFFERS CAPITAL PRESERVATION& INCOME CAPITAL PRESERVATION & GROWTH GROWTH GROWTH & INCOME INCOME 40 30 20 10 0 50 CAPITAL PRESERVATION& INCOME CAPITAL PRESERVATION & GROWTH GROWTH GROWTH & INCOME INCOME 20 15 10 5 0 25 2017/18 OFFERS CAPITAL PRESERVATION& INCOME CAPITAL PRESERVATION & GROWTH GROWTH GROWTH & INCOME INCOME 6% 5% 4% 3% 2% 1% 0% 7% 8% 6.5% 7% 7% 0% 0% CAPITAL PRESERVATION& INCOME CAPITAL PRESERVATION & GROWTH GROWTH GROWTH & INCOME INCOME 6% 4% 2% 0% 8% 10% 12% 4.58% 4.07% 5.10% 6.60% 7% “2017/18 Growth & Income offers had an average Target Return of 7%.”