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Oxford Capital innovates EIS investing with new fee structure for 2024

by | Feb 1, 2024

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Oxford Capital has been at the forefront of groundbreaking initiatives, including pioneering fund investing through their Enterprise Investment Scheme (EIS) work since 1999. The company is once again embracing innovation, staying attuned to market dynamics and seeking closer alignment with investors. In a bold move designed to enhance investor value, Oxford Capital are introducing a fee structure for 2024 to significantly reduce the lifetime cost of investment. 

Oxford Capital’s fee structure change: 

Following the success of their recent second 10x exit within the past two years, Oxford Capital takes pride in unveiling their unique fee tariff for 2024. This comprehensive framework addresses longstanding concerns expressed by both Venture Capital (VC) and Enterprise Investment Scheme (EIS) investors across the market. The result is an overall enhanced investor experience, reflecting Oxford Capital’s commitment to providing solutions aligned with the critical needs of the investment community.

 
 

The changes provide their investors with: 

  • Complete transparency by clearly outlining the maximum lifetime cost from the outset 
  • A tiered initial fee structure that recognizes the principle that investors subscribing a larger amount should not bear the same initial fee percentage as those subscribing a smaller amount 
  • Streamlining the initial fee and custodian purchase/sale fees, eliminating the VAT requirement to reduce overall costs 
  • Enhanced investment potential with an increased subscription percentage available for investment, ranging from a minimum of 91.8% to a maximum of 95.8%, allowing for greater capital deployment and minimising retained cash 
  • Optimised cost efficiency with a reduced Annual Management Charge (AMC), capped at 7 years in alignment with the upper end of the anticipated investment holding timeline 
  • Elevated performance standards by raising the performance fee hurdle from 100% to 120%, calculated on a portfolio-wide basis 

An example of a £100,000 investment In 2024:

Mark Bower-Easton, Head of Distribution at Oxford Capital, commented on the new fee structure: 

 

“Oxford Capital has a history of innovation over the years – from creating the first EIS fund structures in 1999, to now, where we are excited to be launching an innovative fee tariff for 2024 and beyond. It’s another good news story coming out of Oxford Capital, following closely off the back of our second 10x exit in the past two years. 

The changes are aimed at disrupting the industry, and providing investors with fully transparent and cost-effective fees, which further align ourselves to our investors and our portfolio companies. 

Following on from the FCAs new Consumer Duty rules, consumer feedback and extensive market research, we established that the key issues investors have in the venture capital and EIS industry include fee opacity, uncertainty around lifetime cost, lack of alignment between investors, VCs and portfolio companies, and an overall excessively expensive proposition – particularly for investors who are minded to write larger cheque sizes. 

 

The changes we have made will provide investors with the clarity they desire around charging, whilst also providing them with one of the most cost-effective EIS solutions available in the UK today.” 

David Mott, Founder Partner at Oxford Capital, commented: 

“Having invested over £500m into over 100 start-ups, we are proud of our record of backing innovation in the UK and are grateful for the support of thousands of clients. With our new fee structure we will be even more aligned with them and we look forward to helping more investors access the high return opportunities from high growth start-ups and the tax advantages of the EIS investments.

 

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