GBI Editor Peter Wilson recently had an opportunity to chat to Kirsty Greenwood, who has joined Arie Capital as Director of their Arie Tech Fund.
PW: Welcome Kirsty, you’ve recently joined the Arie Group as Director and you are working to build out the Arie Technology EIS Fund so let’s start off by telling us a little bit about yourself and your current role?
KG: I moved to London after graduating with a degree in history and politics and my first boss was Steven Margolis, who is now the Director and Chairman of Arie. So Steven and I have gone through a 17 year circle. I always knew that I wanted to do something where I was giving something back. There’s something about the start-up world that’s really always intrigued me, questions such as how do you get the money and the new ideas into a start-up environment.
I spent some time working in Zurich and Luxembourg, but that was more in structured finance. I’ve also worked across film, renewables, property and media so I’ve done a little bit of everything across the EIS sector. I wanted to work in the more individual space helping high net worth clients look at different opportunities and when Covid happened I got a great opportunity to go and work with 02h as their Vice President of their fund, even though life sciences was something I’d never done. What it really showed me is that there’s space for so much opportunity in the start-up world. Steven and I have always stayed in touch and after much discussion Steven suggested that we build out something together so I joined as Director to build out their EIS capacity.
Arie for me is like a powerhouse as a group it was only founded in 2015-2016, and now it’s got five hundred million pounds of assets under management. It’s got 41 staff from six different countries across the world, including the UK, US, Israel, France, Mauritius and China Arie has done some great EIS and VC funding over the years and along with developing its own Fintech platform there’s also been an exit to Google. We have also got a couple of IPOs going through at the moment. Joining Arie gave me the opportunity to build a proper EIS fund, something that is not just giving mentorship or viability but using internal resources and also in my experience and my colleagues’ experience to raise money to help real people and create genuine opportunities in the UK.
PW: I think that’s really interesting because obviously you’ve got a wealth of experience all over the EIS industry and that clearly drives you.
KG: It is important to note that I am also really passionate, not just about the EIS sector, but advocating and promoting women in finance. I am going to be leading the EIS Association’s Females in Finance Committee. My aim is to go out into schools, reaching and helping girls and encouraging their potential. I wasn’t ever allowed into the maths classroom at school which is ironic given I am now managing my own fund. There’s a need to be actively pushing the EIS message and asking the fundamental question of how we get parity in the sector, and parity across investment committees. If we look at all these funds, and even if I look at my own investment committee we are not 50/50, so I’m currently rebuilding my own committee. Historically EIS has always been about the fund providers so at the moment I’m bringing in female accountants, lawyers and IFAs to create a complete cross-party group which will create real impact.
PW: That’s really great to hear. Hopefully we can chat to you further about that next year. Moving on slightly, there are a growing number of tech focused funds on the market so how is Arie different from the rest?
KG: When I first started working with the Arie group, my focus was on finding a differentiator, asking what makes us stand out. I think we have now found four key reasons why we are a little bit different. I would say reason one is that investing to solve real world problems and real issues. I’ll give an example a bit later.
The second reason is that we work closely with our investee companies. It’s not just a case of simply putting somebody on a board or saying we will help with x y z, we provide, hands-on expertise. I can think of two or three companies that we invest in already where our FC is their FD. So we’re providing proper financial services, actually doing their accounts and monitoring them so we can see what’s happening financially on a monthly basis and then, if needs be, we can step in. Obviously, alongside that, we do put people on the board and so we have sometimes a controlling vote as well. It is important to stress that we are financially in control of those companies.
Thirdly, we’ve talked a little bit about it before but the Arie Group is not just Arie in the UK, it’s Arie on an international level and for that reason, we do have a global reach. If somebody comes on with us and let’s face it, technology is something that has a worldwide span, you’ve got to think about where they are going to capitalise and where they are they going to commercialise. We’ve got our China Vision Fund, and available follow-on funding, so it means that we’ve got the capacity to take companies on to the wider world, not just in Asia, but in the US or say in Israel.
I think the fourth reason, and it’s probably a little bit different to some other funds, is that we offer two routes to market to investors to come into our fund. You can take on a fully discretionary option and we will place your funds, and you can rely on our investment committee. But alternatively, there are increasingly a lot of investors out there who are very, very knowledgeable, particularly in tech in the UK. So as well as offering the fund option, we’re offering them the option to come in on an individual basis and invest directly in specific companies. So I think that’s a quite a big stand out point for us in the market.
PW: That’s really interesting, especially in the tech arena.
KG: It is because they are knowledgeable enough, and they want to do their own due diligence, and they want to run the numbers themselves. They understand, if not the technology, they understand the business acumen behind it and so I want to make sure that we offer both options to them.
PW: Clearly you have some very interesting portfolio companies. Can you give us a couple of examples that demonstrate the sort of company you are investing in?
KG: I tried to pick up a couple of examples where you can see both sides. We’ve got a company called Peratech which is a 3D sensory solution for humans. It has patented technology which provides cost effective, mass-produced, next-generation touch solutions to really exciting and innovative companies in the mobile, consumer electronics and health/sport diagnostics markets. It was founded in 2014 and is based in North Yorkshire. So its all about using your appliances better, getting better use of your digital phone, better user experience in smart appliances in homes but importantly it also has industrial capacity in terms of the automotive and robotics industries. We took on the company and they are creating jobs across the UK. They’ve done very well and have just signed an agreement with a large, I’m not allowed to say who, but a large laptop provider in the U.K.
Another excellent example is a company called SatixFy. When I mentioned earlier about solving real world problems and creating solutions, this is I believe the perfect example. SatixFy uses innovative satellite systems to do things like creating wi fi where there is no alternative. Using satellite communication technology it radically reduces the costs while increasing the performance of the satellite capacity. To raise the money we did an EIS and a VC round, and they have now attracted a 40 million pound government grant. On the back of that, they are working very closely with the UK space agency and are now based around the offices that we’ve opened for them in Farnborough and in Manchester. And so an important success story and one which is all about giving back and building up the wider UK economy, not London-centric.
PW: You mentioned the China Fund earlier, can I ask how that works and how long has that been going?
KG: At Arie we see ourselves as a structured finance house and the China Fund is part of that. We have just hired a new Group Director of Strategy, called David Grunwald, who is ex Director of Google Ventures and Farfetch. But if I’m completely honest my focus is closer to home and always on our UK fund; it’s not just my bread and butter but it is my baby as well. Collectively at Arie the idea is that we will do our bit but we’ve got the capacity to build on with these companies without there being any preordained exits. So capacity not just for further finance but to take on bigger opportunities. We get a lot of our companies from our Israeli connections and what is interesting is that Israeli investors tend to exit really early in a company’s lifecycle and so we bring them into the UK. Here they become westernised and China loves western technology and it came as a bit of surprise to me at first to find that China really doesn’t build that much of its own tech. So that’s where we come in.
PW: It’s fascinating how transnational the whole space is.
KG: It really is and I speak to all my colleagues, every day in the UK, as well as the US, France, China, and as you know, we’ve got a big digital based bank in Mauritius. We really are on an incredible trajectory maybe not quite taking over the world but I feel very privileged to be given responsibility for the fund.
PW: Is there an equivalent to EIS in other countries?
KG: There’s not really. Some countries do have some tax incentives and I hate to say this because it sounds like I’m like sucking up to the government’s mantra, but we really are leaders in the UK in encouraging innovation and start-ups. It’s something that is probably not given enough attention to at home, but it is certainly noticed around the world.
Let’s face it, we have the biggest and best of start-up worlds here in the UK and we should be really proud of it.
About Kirsty Greenwood
Kirsty Greenwood, Director of the Arie Tech Fund Kirsty has worked in the alternative finance and EIS space for the last 15 years, working with several leading alternative investment houses providing her with diverse exposure to multiple investment sectors. Over the course of her career, Kirsty has been responsible for cultivating relationships with a network of sophisticated private investors, partners and introducers providing them access to tax efficient and equity and debt opportunities. Previously she was COO of an independent investment specialist which provided Financial Advisors, Accountants and Private Banks with an independent view of the media market, expanding into Property and Renewable Energy. Additionally, Kirsty also spent 6 years at a mid-market Investment Manager where she gained experience in business operations, financial compliance and working directly for the family office supporting the business.