The Committed Capital Growth EIS Portfolio Service aims to generate attractive tax-free rates of return from investments in UK, EIS qualifying, technology-enabled companies, which we believe is one of the most high-growth and dynamic sectors in the UK market, and our core area of expertise.
During the last 12 months, there was volatility within the portfolio arising from various challenges. These were mainly expressed in short term cash problems. In these circumstances, our view is that, provided an investment thesis remains correct, there is normally a remedy. This may consist of strengthening management, cutting costs and addressing issues in the marketing of a product or service.
Each of our portfolio companies has taken action in response to COVID-19, varying from cost cutting and adoption of help from Government initiatives to creation of new products relevant to the current environment. Since the beginning of the pandemic, we have been pleased to note that these initiatives, together with actions taken in 2019, have stood our portfolio in good stead to-date.
We have a strong interest in the edtech sector, which seems to be doing particularly well at this time given that students are in dire need of high quality digital content to support working from home. We are particularly impressed by Kortext, who have signed an additional 250 universities for their free textbook programme since March.
We are pleased to say that fundraisings in relation to five portfolio companies, namely Lightwave, Kortext, pi-top, Konsileo, Living Map and Smartology have progressed well, and remain open for investment.
The Committed Capital Growth EIS potentially provides an effective solution for investors who are considering an alternative investment option to the low returns on savings resulting from persistently low interest rates *1, or for those who are looking to defer (or potentially reduce) a capital gain, reduce their income tax liability, and reduce (or potentially eliminate) exposure to inheritance tax, and who are willing to accept the risks associated with such investments *2.
We are immensely grateful for the support investors have provided to our investee companies and wish you the best of health for you and for your families as we progress to a resolution of the current crisis.
(*1) It is important to note that the Committed Capital Growth EIS is a high-risk investment and much riskier than other savings options. Investors should be aware that they could lose all of the capital invested in this product. Any investor considering an investment, including as an alternative to a cash deposit (savings) account, should seek independent financial advice to fully understand the key differences between these financial products.
(*2) The availability of any tax relief may or may not apply to any specific individual depending on their circumstances and may change or be withdrawn at any given time.
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