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Upcoming Event | Hardman & Co: Bank North management presentation and Q&A

The Vala Sustainable Growth EIS is a discretionary portfolio service, which will provide a portfolio of sustainable investments across a range of themes. The target is a 2.5x return after fees. Returns will be focused on capital gains, and investors are unlikely to receive any dividends. The Fund is evergreen.

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: Sustainable investments across three themes with a strong framework for monitoring companies’ ESG capabilities.

Issues

  • Track record: Given Vala’s short history, the track record so far is limited with no exits.

The Investment Manager

Positives

  • Team: The team has a broad range of entrepreneurial and ESG experience and a successful track record prior to Vala.

Positives

  • Key man risk: Jasper Smith is the key person for Vala, although the growing team may mitigate some of that risk.

Nuts & Bolts

  • Duration: The Fund is evergreen, with investors participating in deal flow after investment. Vala aims to invest within 12 months.
  • Diversification: The manager aims to provide six to ten investments for each investor, with no more than 20% in one company.
  • Valuation: Mixture of last transaction and internal valuation.

Fees

  • Fees: A simple fee structure, with an AMC for up to five years and only an initial fee charged to the investee company plus the performance fee. The former is split, with three years charged upfront and any balance on exits.
  • Performance fee: Charged at 20% on aggregate returns over 110% of invested capital.

Risks

  • Target returns: The target return of 2.5x capital after fees suggests a
    medium- to high-risk investment strategy.
  • Companies: Supplying risk capital to early-stage companies, with a mix of pre-
    and post-revenue investments. There will be a spread of company returns as the successful ones will do very well, but those who fail may do so completely.
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