Seneca Partners, the specialist SME investment business based in the North-West, has announced the launch of its new AIM focussed EIS Fund – the Seneca AIM EIS Fund.
The Fund will offer investors a spread of five to ten investments in AIM only quoted companies and targets a return of at least 1.5x net of fees before any tax reliefs are taken into account. There will be no annual management charge and the minimum investment is £20,000. The Fund will seek to exit all investments within four years, thus bringing EIS investment horizons back within a more defined timeframe.
Seneca Partners has an impressive track record of AIM investing as a component within its existing EIS Portfolio Service. It has invested £24 million in AIM quoted companies since 2013 and has already returned £23.6 million of cash to investors with its current AIM portfolio worth an additional £19.1 million, representing a combined return of £1.78 per £1 invested, excluding tax reliefs.
The Fund will be invested via a series of small tranches to ensure deal flow and investor demand is well matched. It is designed to complement its evergreen EIS Portfolio Service, which blends both private and AIM-quoted investments.
The first tranche is now open for investment.
Seneca Partners Investment Director, Matt Currie commented: ‘’We are long-standing Growth Capital investors through our existing tax efficient products which include the Seneca EIS Portfolio Service and Seneca Growth Capital VCT. The new AIM only EIS Fund further enhances our offering and will give our investors another option from which to optimise the very attractive features available from EIS and VCT investments.’’
“Recent rule changes to EIS qualification generally means that exit horizons for privately owned companies are becoming stretched due to investments being made at an earlier stage in the lifecycle of a business. Investors in our existing EIS service have benefitted from much shorter exit timescales from their AIM quoted holdings which we expect to replicate in the new Fund, therefore enabling investors to utilise their initial tax reliefs much more effectively.
“The benefits of being AIM-quoted appeals to those who enjoy the inherent due diligence, daily market pricing, regulatory news flow and liquidity associated with public companies. This visibility and access to capital markets mean the size and scale of the investee businesses are generally much more substantial and less vulnerable than many of the privately owned companies – which must overcome many more challenges in the route to an exit. Many providers see an IPO as one of their primary longer term exit aspirations for their investee companies. In using AIM-quoted businesses as our starting point we have removed a large element of uncertainty for investors in understanding how their cash will ultimately be returned to them.”
