EIS 2018 report (web)

62 63 MINIMUM SUBSCRIPTION In 2017/18, the minimum subscription has come up from £1,000 to £5,000, but the mode has remained unchanged at £10,000. The average of just under £20,000 has also not varied significantly, but this entry level could increase next year with the EIS risk profile. MINIMUM FUNDRAISE The average minimum fundraise has jumped up by almost 150%. This suggests a period during which a number of EIS fund managers have been targeting high raises in relative terms. TARGET RETURNS These are obviously not guaranteed and not all offers state a target return. While the average is 9% lower than 2016 offers, but still higher than historical offers, the most interesting statistic is the mode of 300%. This is indicative of more offers aiming for higher returns that befit real growth potential. “In 2017 the minimum subscription has come up from £1000 to £5000, but the mode has remained unchanged at £10,000.” In 2017/18 offers, exit deal fees have disappeared, as have initial deal fees (other than one product charging 3% to investees which is notable for this relatively high level). Annual admin fees are also virtually non-existent as an investor charge (only one product charges it at 0.5%). But, almost a third of 2017/18 offers charge an annual admin fee to investees, ranging from 0.1% to 1.75%. The historical figures show that only just over one in 10 investees have previously incurred this charge (between 0.1% and 2.5%). Historically just over 17% of offers made this charge to investors, meaning that a total of just under a third of offers charged an annual admin charge. This suggests a shifting of a large proportion of these fees from investors to investes. OTHER FEES 2017/18 OFFERS HISTORICAL OFFERS 2017/18 OFFERS HISTORICAL OFFERS MARKET COMPOSITION BY INVESTMENT STRATEGY There are now no new capital preservation or growth and income offers in the market. 56% of 2016/17 offers were Growth and Super Growth and when compared against all historical offers, the trend for an increase in Growth offers is confirmed. CAPITAL PRESERVATION CAPITAL PRESERVATION & GROWTH GROWTH GROWTH & INCOME SUPER GROWTH AVG MODE MIN MEDIAN MAX 1800% 1600% 1400% 1200% 1000% 800% 600% 400% 200% 0% AVG MODE MIN MEDIAN MAX £120,000 £100,000 £80,000 £60,000 £40,000 £20,000 £0 2017/18 OFFERS HISTORICAL OFFERS AVG MODE MIN MEDIAN MAX £16M £14M £12M £10M £8M £6M £4M £2M £0 38% 62% 2017 OFFERS 42% 53% 2% 2% 1% HISTORICAL OFFERS MARKET COMPOSITION BY SECTOR MARKET COMPOSITION BY INVESTMENT TYPE “Media and Entertainment continues its trend from last year as the top sector.” ENERGY GENERATION FOOD & DRINK GENERAL ENTERPRISE INDUSTRY & INFRASTRUCTURE MEDIA MEDIA & ENTERTAINMENT PHARMACEUTICALS / BIOTECHNOLOGY RENEWABLE ENERGY SPORT & LEISURE TECHNOLOGY TRANSPORT Media and Entertainment continues its trend from last year as the top sector and the Technology sector has also grown. Significantly, General Enterprise offers have declined by almost two thirds in comparison to historical offers. We think that as the EIS landscape changes as a result of the new rules, generalist offerings may well increase again as familiar sector-specific structures are required to change. Although compared to historical offers, 2017/18 figures for Alternative Investment Funds are lower, when looking at 2016 offers, the AIF is making a come back. (See Sector Analysis) ALTERNATIVE INVESTMENT FUND PORTFOLIO DISCRETIONARY PORTFOLIO SERVICE SINGLE COMPANY 8% 12% 46% 4% 19% 11% 2017/18 OFFERS 28% 17% 11% 22% 8% 8% 1% 1% 3% 1% HISTORICAL OFFERS 42% 35% 23% 2017/18 OFFERS 48% 23% 25% 4% HISTORICAL OFFERS