SyndicateRoom launches Fund Twenty8, a unique EIS tracker fund
- Innovative approach set to challenge traditional EIS fund management industry __- New fund offers diversified portfolio with at least 28 investments across multiple sectors
Cambridge, UK – 8 June 2016 – SyndicateRoom today launches a new Enterprise Investment Scheme (EIS) fund designed to bring a portfolio approach to investment in early stage companies.
Fund Twenty8 brings a fresh approach to traditional fund management styles, by harnessing technology to make investment decisions. Each of the deals on SyndicateRoom’s platform is led by a business angel, venture capitalist (VC) other lead investor. The fund then automatically tracks and matches the investments made by SyndicateRoom members in these deals, to deploy capital.
Fund Twenty8 was developed and named based on industry research into early stage investment performance. NESTA research1 showed that business angels and VC investors can generate returns, on average, in excess of 20% IRR per annum. Further research by Intelligent Partnership2 then calculated that a suggested minimum portfolio size should hold at least 28 companies. Traditional EIS funds generally only invest in between 5 and 10 investments per fund and usually focus on a single sector. With Fund Twenty8, investors get access to a much larger portfolio of investments, across a broad range of sectors.
Rather than relying on a single fund manager, investments are sourced, structured and invested in by business angels, VCs and other lead investors. The fund then tracks and matches the appetite of SyndicateRoom members, who are sophisticated investors, staking their own capital, to define how much capital is allocated into each investment. This is done on a £ for £ basis until the company’s funding target is met. If an investment is oversubscribed and goes into overfunding, the fund then invests more, securing a larger weighting.
Investment in Fund Twenty8 is available from today to retail investors, SyndicateRoom members and institutional investors, with eligible private individuals benefiting from EIS tax benefits. These include:
- Income tax relief offered at 30% on up to £1m per tax year
- No capital gains tax on disposal of shares after 3 years
- Deferral of other capital gains up to the amount re-invested
- Combined income tax and loss reliefs of up to 61.5%
- 100% inheritance tax relief available if held for 2 years
Fund Twenty8 will be launched at the global asset managers and investors event, FundForum in Berlin on 8 June, where SyndicateRoom CEO and co-founder Gonçalo de Vasconcelos will speak about the future of fund management and how technology can be harnessed for investment decisions.
Gonçalo de Vasconcelos, CEO and co-founder commented: “Our mission at SyndicateRoom has always been to provide online investors with fair and transparent access to the high-growth investment opportunities the professionals are investing in. Fund Twenty8 is SyndicateRoom’s latest innovation as another step along that journey. We’re harnessing technology to achieve a unique way to deploy capital alongside business angels and VCs – the more interest from investors, the more the fund deploys.”
James Sore, Chief Investment Officer at SyndicateRoom, said: “Investors want choice - and we have a proven track record in providing that. Now we’re catering to the passive investors who prefer a portfolio approach to investing but don’t want to pay the hefty management fees that usually come with it. This new product offers a diversified portfolio for our investor community, while providing an even stronger route for companies to seek growth capital.”
1NESTA research http://www.nesta.org/publications/siding-angels
2Research from Intelligent Partnership (2014): Based on a 1 in 10 chance of selecting an investment that achieves a 10x return or better (NESTA), investors should invest in 28 or more early-stage businesses in order to achieve a 95% probability of including at least one of those businesses returning 10x or more.
For further information, please contact:
Katie de Cozar Rushforth
Rob Mindell / Darius Alexander / Kuldeep Mehmi
Notes to Editors
SyndicateRoom pioneered the investor-led model in crowdfunding, where members are able to invest alongside professionals and receive the same class of share and price per share. SyndicateRoom’s vision is that on a £1-per-£1 basis, all investors (big or small) should make or lose the same amount of money, sharing the risk and reward fairly. This applies to opportunities from early stage private companies to premium segment listings on the main market of the London Stock Exchange.
SyndicateRoom was founded by Gonçalo de Vasconcelos and Tom Britton, and its own lead investors and advisers include UK Business Angel of the Year Peter Cowley and super-angel Jonathan Milner.
SyndicateRoom is authorised and regulated by the Financial Conduct Authority and is a member of the London Stock Exchange.www.syndicateroom.com
Risk Warning: Investing in early stage businesses involves risks, including illiquidity, lack of dividends, loss of investment and dilution, and it should be done only as part of a diversified portfolio. SyndicateRoom is targeted exclusively at sophisticated investors who understand these risks and make their own investment decisions.