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24Haymarket Limited

24haymarket Managed Portfolio Service

14 Jan 2022 / Tax enhanced research

The 24Haymarket Managed Portfolio Service (MPS) is an Alternative Investment Fund, which will provide a portfolio of investments in unquoted Series A and some seed companies. There is no explicit target return, but 24Haymarket believes the historical figures of a 2.2x multiple and a 24% IRR are reasonable expectations. Returns will be focused on capital gains, and investors are unlikely to receive any dividends. The fund is evergreen.

Why invest

Positives

  • Strategy: Exposure to series-A investments in companies looking to accelerate sales growth, investing alongside experienced angels.

Issues

  • Track record: The track record so far is very good, but could do with a little more depth.

The investment manager

Positives

  • Team: The directors have decades of experience at senior level in private equity, while the Investor Network is high-calibre.

Issues

  • Team size: The executive team is slightly smaller than we would expect, although the Investor Network compensates for this.

Nuts & bolts

  • Duration: The fund is evergreen, with a closing likely in spring 2022, and then as required, with investors participating in the deal flow after investment.
  • Diversification: The manager aims to provide 10-15 roughly equal investments for each investor, with a maximum investment of 10% in any one company.
  • Valuation: This usually changes at the next financing, or on writedown.

Fees

  • Fees: These are a combination of direct fees and company charges. Four years’ worth of annual fees are deducted from the initial payment and drawn down as required.
  • Performance fee: Charged at 20% (plus VAT) on aggregate returns over the subscription.

Risks

  • Target returns: There is no target return for the fund, but 24Haymarket suggest that the historical returns are around its expectation, which suggests a medium- to high-risk investment strategy.
  • Companies: 24Haymarket supplies capital to technology companies looking to accelerate their growth. There will be a spread of company returns, as the successful ones will do very well, but those who fail may return little or nothing.
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