Summary: The Deepbridge Technology Growth EIS is a discretionary portfolio service which will invest into a small portfolio of up to nine underlying companies, focussing on three sectors: resource and energy innovation, medical technology and high growth IT- based solutions.

Why Invest

Positives

Strategy: Well defined investment process to invest directly in companies in selected technology areas.

Issues

Concentration: Portfolio may be up to nine investments, though smaller investors may get greater concentration.

 

The Investment Manager

Positives

Team: The Deepbridge team is very experienced in the relevant areas and its Committees have very strong outside members.

Issues

Track record: Although the team is experienced, to date Deepbridge has only had one partial exit. The investment team is small, but growing.

 

Nuts & Bolts

  • Investing: Deployments take place on a monthly basis, so new money will usually be invested within that period.
  • Diversification: Portfolio of between three and nine companies.
  • Valuation: Unprofitable companies will be held at cost or at last relevant transaction. Profitable companies use a discounted average multiple from relevant companies.

 

Specific Issues

  • Fees: Only the performance fee is not charged directly to the company.
  • Performance fee: Performance fee of 20% on gross returns over £1.20 on a per company basis.

 

Risks

  • Risk mitigation: Deepbridge aim to mitigate risk by active ongoing support of the company and choosing conservative business plans. The companies are revenue
    generating, but still immature with the risks that brings.
  • Target return: The target return for the fund is £1.60 for each gross £1 invested over 3-4 years. Individual companies tend to have much higher targets, reflecting that success in a company will give an excellent return, but there is a real risk of loss in any project.