Review: Parkwalk Opportunities EIS

The UK is an ideas factory. And it’s slowly but surely getting better at turning great ideas into commercial successes. Many of these ideas have come out of university research projects.

Indeed, Cambridge University has spun out 15 companies valued at more than $1 billion. One of these was ARM, the smartphone chips designer, acquired by Japan’s Softbank for $32 billion.

Cambridge University is not alone.

In 2018, University of Bristol spinout Ziylo was acquired by Novo Nordisk, one of the world’s biggest makers of diabetes drugs, for up to $800 million. Evox Therapeutics, a spinout of Oxford University has recently received funding from GV, the venture capital arm of Google. It was founded two years ago and is now valued at around £85 million.

The Parkwalk Opportunities EIS focuses on this specialist but high risk area of university spinouts.

Notable UK University spin-outs include: 

Company University Exit
ARM Cambridge Acquired by SoftBank in 2016 for $32bn
Xeros Leeds $290m stock market valuation
Vocal IQ Cambridge Acquired by Apple in 2015
Oxford Nanopore Oxford Raised $125m in 2016 at $1.25bn valuation
Cambridge CMOS Cambridge Acquired by ams AG in 2016

Ideally placed to spot rising stars 

Parkwalk was founded by two experienced capital markets managers in 2009, when they discovered a compelling company in which they wished to invest, Xeros. The brainchild of a Leeds University professor, it has developed a “waterless” washing machine. Parkwalk invested in 2010 and Xeros listed on AIM in 2014.

That original investment created the blueprint for what Parkwalk has become.

It is the leading EIS investor specialising in backing the commercialisation of technology or intellectual property developed at leading UK universities.

Parkwalk has investments in companies spun out of twelve universities.

In addition to the Opportunities EIS fund, it manages funds in conjunction with the tech-transfer departments of Cambridge, Oxford and Bristol Universities. This gives the team access to exclusive deals some other managers don’t see.

Watch an exclusive video interview with Enrico D’Angelo of Parkwalk:

Valuable links to institutional investors

In January 2017 Parkwalk was acquired by IP Group plc, a leading intellectual property commercialisation company listed on the London Stock Exchange.

IP Group recently also took over rival firm Touchstone Innovations plc, strengthening its foothold in the market as a result.

The relationship with IP Group gives Parkwalk access to potentially valuable co-investment opportunities, both with IP Group as well as other large institutional investors, including Baillie Gifford, Cambridge Innovation Capital, Invesco Perpetual, IP Group plc, Oxford Sciences Innovation plc and Woodford Investment Management.

Tracsis plc – Parkwalk Opportunities EIS FundManager's impressive track record to date

There isn’t a set target return for the fund, but Parkwalk looks for companies it believes can return five times the original investment. Clearly not all will do that, and investors’ returns will be determined by the performance of the whole portfolio (typically five companies).

Across all its funds, the manager has so far exited 19 companies, eight profitably, including Tracsis, which creates software for train operators and delivered close to 10x return in three years including tax relief. Investors in Parkwalk UK Tech Fund II received back substantially more than the original subscription into the fund on the Tracsis exit alone. Past performance is not a guide to the future, capital is at risk.

Source: Parkwalk Advisors. Valuations as of 1 Nov 2018, on all investments made across all funds per tax year. Total Return includes realised returns and unrealised returns. Performance figures exclude performance fees and tax relief. Returns calculated using Parkwalk's own valuations. Please note, data for the 2017/18 tax year is not yet available. Past performance is not a guide to the future.

What to consider next

Please visit the offer page to download the offer documents, read more (including risks and charges) and apply online.

EIS / SEIS investments are high-risk so should only form part of a balanced portfolio and you should not invest money you cannot afford to lose. They also tend to be illiquid and hard to sell and value. Before you invest, please carefully read the Risks and Commitments and the offer documents to ensure you fully understand the risks. 

The value of tax benefits depends on circumstances and tax rules can change.

Wealth Club aims to make it easier for experienced investors to find information on – and apply for – tax-efficient investments. You should base your investment decision on the provider's documents and ensure you have read and fully understand them before investing. This review is a marketing communication. It is not advice or a personal or research recommendation to buy the investment mentioned. It does not satisfy legal requirements promoting investment research independence and is thus not subject to prohibitions on dealing ahead of its dissemination.

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