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EMVC Evergreen EIS Fund is a discretionary portfolio service that will give each investor exposure to four to six technology companies. The target return is £3 for each £1 invested. Returns will be focused on capital gains, and investors are unlikely to receive any dividends. The Fund, as the name indicates, is evergreen.

Why invest

Positives

  • Strategy: Exposure to a portfolio of technology companies that focus on hardware and hardware-enabling software and applications.

Issues

  • Past performance: The Fund is new and has no past performance, although we note that the team has one exit from other investments.

The Investment Advisor

Positives

  • Team: The EMVC team has significant experience of building new businesses and making Angel/Venture Capital investments.

Issues

  • Team size: The EMVC team is relatively small, although recruitment is under way to expand capacity.

Nuts & bolts

  • Offer period: The Fund is evergreen, with investors sharing in the deal flow subsequent to investment, although there may be a close before the 2018/19 tax year ends.
  • Diversification: The aim is for each investor to have exposure to four to six companies.
  • Valuation: There will be little or no change in the valuation, except at further fundraises, and investors will receive regular updates on progress.

Specific issues

  • Fees: Mixture of direct fees, and charged via the investee companies.
  • Performance fee: 20% on gains above £1.10 per £1 invested on a per company basis.

Risks

  • Target returns: The target return of tripling invested capital over six to eight years suggests a higher-risk strategy within the EIS area and is appropriate for the strategy, although investors should note the slightly longer term than some other funds target.
  • Companies: Individual investments will be high-risk, with the return profile likely to be skewed. Those that do well will give a larger-than-target return, but the failures may return little or nothing.
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