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Braveheart launches Beta EIS Fund


Braveheart (AIM: BRH), the technology commercialisation and investment management company, today announces the launch of its Beta EIS Fund (“the Fund”). The Fund, a successor to the Group’s Alpha EIS Fund, is an HMRC approved Enterprise Investment Scheme (‘EIS’) fund which will provide risk and investment diversification from a balanced portfolio approach, with exposure to various industry sectors and stages of company. Investments will be principally in technology-based companies which have the potential to make significant capital gains in the next five years.

Braveheart currently has interests in a portfolio of 48 companies and the Fund will provide follow-on funding to selected portfolio companies as well as making new investments. UK investors in the Fund will be able to take advantage of the favourable tax treatments associated with the EIS regime. The minimum subscription to the Fund is £10,000 and the maximum is £500,000 per individual (or £1m per couple). Copies of the Fund’s Information Memorandum are available to qualified investors or can be obtained via professional advisers.

Geoffrey Thomson, Chief Executive of Braveheart, said, 'We have been constructing EIS portfolios since we formed Braveheart in 1997. Since that time we have seen EIS grow from being a grossly under-utilised and misunderstood asset class to what it is today. With the 50% rate of tax looming, EIS has now come of age and is an asset class in its own right.

'We believe high net worth investors should have an exposure to the EIS asset class. The advantage of EIS is that investors can back high risk/high reward companies in a tax efficient way. If the investment fails, the investor can set the loss against tax: on the other hand, if the investment comes good, the investor can realise the gain without, in most cases, paying tax on the profit.

'But there is another side to EIS investing. We all require our money to work hard, but by EIS investing the investor is helping today’s little businesses become tomorrow’s large ones. That is important. Our EIS investors buy shares directly in the underlying entities we decide to back. This is very different from buying shares in a traded vehicle (such as a VCT) and ownership is much more tangible. It is good for investors to see the management teams that their money is backing – this makes it more real, more understandable and more personal.

'On balance over the last thirteen years, our rebased client portfolio of realised investments (both good and bad exits) has doubled in value every 30 months. This return is before any EIS tax breaks are factored in. We believe this performance leads the EIS market. Looking at specifics, six of our companies have listed on public markets and two of those companies were worth an aggregate £425m on the day they listed on London’s main market. We have also sold three companies by trade sale and/or secondary purchase.

We have interests in 48 companies and within this portfolio there are some outstanding businesses in which the Beta EIS Fund may invest. Alongside this we have a strong pipeline of new opportunities. Beta investors will benefit from a portfolio that is diversified in terms of sector and stage.'

For further information please visit www.braveheartinvestmentgroup.co.uk or contact:

Braveheart Investment Group
Geoffrey Thomson, Chief Executive
Tel: 01738 587555 / gthomson@braveheart-ventures.co.uk

Tavistock Communications (for Braveheart)
James Midmer / Simon Hudson
Tel: 020 7920 3150 / jmidmer@tavistock.co.uk

Seymour Pierce Limited
John Cowie
Tel: 020 7107 8000 / johncowie@seymourpierce.com


Key Features of the Fund

Objective
The objective of the Beta EIS Fund (‘Beta’ or the ‘Fund’) is to provide investors with a diversified portfolio of tax efficient investments. Investments will tend to be in technology-based companies and all investments will have the potential to make significant capital gains over a five year period.

Manager and track record
The manager of the Fund will be Braveheart Ventures Ltd, a wholly owned subsidiary of the Group. The Group’s Chief Executive Officer, Geoffrey Thomson, and the Chief Investment Officer, Carolyn Smith, have worked together at Braveheart since 2000 and have been responsible for establishing the existing client portfolio. This portfolio is showing what are believed to be market leading returns: as at 31 March 2009, 19 exits have been achieved of which six have been initial public offerings (‘IPO’s), three have been trade sales/secondary purchases and ten have been write-offs. This performance equates to an Internal Rate of Return (‘IRR’) of 33%. Two of the IPOs have been by way of main London market listings and both are technology companies.

Current portfolio and pipeline
The Group has interests in 48 portfolio companies. These interests are either by way of direct investment by the Group or by way of the management of client or fund portfolios. This portfolio comprises principally technology investments that span a number of different industry sectors. It also contains companies at various stages of development. This portfolio provides a strong pipeline of investments for the Fund.

The Fund
The Fund has been approved by HMRC as an Approved EIS fund. In order to comply with the legislation, the Manager will seek to invest at least 90% of the Fund within 12 months of its closing, and the Fund will make a minimum of four investments. Notwithstanding, the Manager expects that the Fund will invest in at least ten companies and that all of these investments will be made within the requisite time frame. The Fund will close to applicants on 31 March 2010. The maximum investment into the Fund is £500,000 per individual or £1m per couple. The minimum investment into the Fund is £10,000. There is no maximum or minimum Fund size.

Investment policy
The Manager will seek to build a balanced portfolio with exposure to various industry sectors and stages of company. Investments will be principally in technology and will be made by way of follow-on into the existing portfolio and also into companies which are not currently in the portfolio. Investments may be made alongside other private or public sector funds managed by the Manager. The Group has pre-emption rights in respect of existing portfolio companies and these pre-emption rights will be available to the Fund as a ‘first option’ in the event that existing Braveheart client shareholders do not take up their allocations in full.

Exits
The Fund will be managed from an EIS perspective and exits will be sought in three to five years. It is anticipated that the Fund will be wound up at the end of year five. Investors in the Fund will have a range of options for realising investments which are still active when the Fund is wound up.

EIS
Subject to personal circumstances, investors in the Fund will benefit from a range of tax reliefs that encompass income tax relief, capital gains tax (CGT) deferral, CGT exemptions, loss relief and business property relief (for inheritance tax).


Publisher Contact Information:

Braveheart Investment Group
+44 1738 587555
gthomson@braveheart-ventures.co.uk

Company profile of Braveheart Investment Group
Past press releases of Braveheart Investment Group .

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