EIS report and guide

This year’s EIS Showcase series was a special one for the Intelligent Partnership team. Not only did it promote the launch of our latest EIS Industry Report, the London event was also the scene for the launch of our first ever Adviser’s Guide to the Enterprise Investment Scheme.

However, these were not the only things to be discovered at the events, which nearly 200 people attending six events that ranged the length of the country, starting in Exeter and taking in Glasgow, London, Cheshire, Yorkshire before completing in Southampton.

Over the course of the events, one of the key themes to come through from the investment managers was the importance of team. This is both in the sense of having a good team within the provider, which is able to effectively and carefully select the right investments for the portfolio, but also in relation to the companies receiving investment. “It is the people behind the business that are important,” explained one speaker.

As another put it: “Fundamentally you have to have a personality due diligence.”

That’s because those providing the investment need to be able to get on well with their investee companies when things get difficult and tough conversations and decisions have to be made.

Editor Paul Jarvis introducing the EIS Report 2019 and the EIS Guide at the Showcase held at the London Stock Exchange

But it is not just the individuals that the fund managers are looking at these days. Many speakers over the course of the Showcases discussed the importance of investing in companies that are delivering a positive impact on society. “We want to do well by doing good,” explained one speaker, while still aiming to maximise the financial return on offer.

This search for those providing a major impact was a theme that was also taken up by others, who pointed out that the key in EIS investing now is on businesses that have truly disruptive plans in their sector. Gone are the days when managers might be content to invest in companies simply looking to replicate the success of others. The risk to capital condition in EIS now means that investments must be into genuinely risky businesses, and that means finding those that are willing to bring genuinely new and innovative products or services to market.

However, the Showcases also demonstrated very clearly that the risk to capital changes do not mean it is the end of opportunities in the creative industries. As our Industry Report demonstrated, there remain opportunities in the media & entertainment sector, provided companies can be properly structured. 

With Great Point Media and Calculus Capital both discussing their investment opportunities in the media & entertainment space, it was evident that this is an areas which, while perhaps no longer the powerhouse of EIS that it once was, will continue to play a role in the market.  

Indeed, it was clear from all the managers present across the six events that there is a broad range of opportunities for investors to get involved with when looking at EIS opportunities. While there was some co-investing, the overwhelming impression that attendees will have got is of the impressive diversity available through EIS, from film and media, to retail, to medical technology products.

One thing that the Showcases could not escape, perhaps unsurprisingly, was Brexit. It was a question that often found its way into the Q&A sessions.

The full lineup of our EIS Showcase in Southampton

However, the managers were generally upbeat about the UK’s prospects post-Brexit, with several pointing out that there are plenty of companies in search of funding. One pointed out that there is also a more generous climate towards investment from the public at large, with “more appetite in the general public to invest in early stage businesses”.

Furthermore, some see Brexit as providing an opportunity for this part of the market, suggesting that tax advantaged investments such as EIS have “never been more important” as the next government will be keen to stimulate growth in small UK businesses to underpin the economy.

We’d like to say a big thank you to all our attendees, who made the sessions lively with their participation during the Q&A panels, as well as all the speakers, from Blackfinch Ventures, Calculus Capital, Committed Capital, Deepbridge Capital, Fuel Ventures, Great Point Media, Guinness Asset Management, Symvan Capital, Seneca Partners, Triple Point and Vala Capital.

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