Are there more clients becoming interested in the schemes?
Time will tell what the pandemic has done to medium and long term investor confidence. However, by their very nature the investee companies are small and many can adapt to change fast. If I was investing in these turbulent times, this is where I would be looking.
How can advisers continue to educate their clients about the investment opportunities in EIS?
I think first and foremost having an understanding of what is available and what type of investment do their clients wish to make. Historically it was all about investing in the biggest fund manager and getting the tax break; increasingly now it’s about the potential of the fund manager and the companies within their portfolio. This is exciting to see evolve and to be able to deliver the marketplace that is at the heart of this transformation is something the team here at CoInvestor are rightly proud of.
Does the industry need to do more to promote the schemes to a wider investor base?
It does and we are. We are all working ever closer together to ensure that the opportunities meet the capital and can be administered in a simple, digitally led world. Lengthy paperwork and an opaque market are now things of the past. We have made investing in these types of products simple and by taking the administrative burden away we, perhaps, have enabled you to put the words fun and investing into the same sentence.
Has the continued confusion over Brexit affected the future of EIS?
No.
Are there any clouds on the horizon that might spoil the party?
I think we have already entered uncharted waters for the global economy. Without wishing to predict the future we are clearly entering one of history’s most interesting times at the very least from an investor’s perspective. This can be and should be a time for any investor to take stock and above all to take caution.
However, with some of the brightest young companies being supported by these schemes, many of them being pre revenue let alone pre profit they may yet turn out to be the ones to back as they do not have large inventory, are yet to be reliant on existing supply chains that may be broken and short term cash client flow. They are potentially the companies that will be able to operate in the new normal, whatever that is. We will see.
Chris Sandfield, Chief Executive Officer at CoInvestor
