EIS Industry Report 2018/19

52 53 A total of £217m was drawn out of British funds in August, according to the Investment Association, with domestic companies remaining out of favour in the run-up to the country’s formal departure from the European Union. 52 Private company investments are less likely to be sensitive to movements in the FTSE 100, for example. However, they do of course come with their own set of risks. A threat to human capital One impact of Brexit, that will likely be a challenge to growing companies, will be the availability of international workers. Companies that are R&D focused rely heavily on workers from all over the world. The lack of free movement of European workers could pose a challenge for growing, innovative companies. Be that as it may, the UK itself is home to fantastic talent, and has some of the best universities in the world. Brexit will not put a halt to innovation, but it’s something that prospective EIS investors should consider. A boost to KICs The last two Budgets have seen significant boosts to knowledge-intensive companies. Both through the knowledge-intensive fund structure in the 2018 Budget, and the increased investment threshold in the 2017 Budget. This drive towards these types of companies will no- doubt assist them in weathering the Brexit storm. MARKET RESEARCH “We must remain optimistic yet cautious; we need to ensure that investors have the confidence to continue to look to UK SMEs as a viable investment, and also ensure that there is enough capital for investors to reinvest back into UK businesses.” — MARK BROWNRIDGE, DIRECTOR GENERAL, EISA Considerations for Investment / The Brexit Impact