×

COVID-19: -

Our Commitment to Client Service & Investor Communications

Innvotec

Innvotec Technology EIS & SEIS Fund (Update)

06 May 2021 / Tax enhanced research

The Innvotec Technology (S)EIS Fund is a discretionary portfolio service focused on investing in a portfolio of technology companies across targeted sectors with a bias towards impact investments. No specific target return is given, although the performance fee includes a hurdle of 130% of the subscription, which suggests the expectation is of a return to investors in excess of that. There is no income target.

The report goes into details of how the investment process works, sourcing and decision-making, exit strategies, post-investment governance and monitoring, fees and more. It also includes Hardman & Co’s unique fee calculation table, allowing advisors and investors to properly investigate their effect.

Why Invest

Positives

  • Strategy: To invest in a range of technology companies in targeted sectors with a bias towards impact investments.

Issues

  • Track record: Although Innvotec has been (S)EIS investing for over a decade, it is under new ownership and management.

The Investment Manager

Positives

  • Team:  The Innvotec team has well-rounded experience in technology and entrepreneurship, and is a good size, with plenty of support around it.

Issues

  • Growth ambitions: The team is more than adequate for current operations, but Innvotec’s growth plans could require it to be significantly expanded.

Nuts & Bolts

  • Investing: The fund operates with quarterly closes. Deployment will usually take place that quarter, but always within the relevant tax year.
  • Diversification: A portfolio of between six and ten companies across several technology subsectors.
  • Valuation: Valuations are updated monthly and provided on an ongoing basis through Innvotec’s investor portal.

Fees

  • Fees: Mixture of direct fees, and charged via the investee companies.
  • Performance fee: 30% on gains over £1.30 for each pound invested.

Risks

  • Risk mitigation: As well as its own diligence, Innvotec funds only part of a round, so companies will need to have convinced other funders to invest. The team aims to have close contact with investee companies to supply ongoing monitoring and support.
  • Target return: No explicit target return is given, although each investment will be at the higher end of the risk spectrum. As usual in this area, successful companies will give an excellent return, but there is a real risk of loss for those that don’t.
Download the full report

Request a meeting

If you'd like to be introduced to the team at Innvotec, get in touch.

Request a meeting
Download the full report