Three investments I like
Archived article: please remember tax and investment rules and circumstances can change over time. This article reflects our views at the time of publication.
Clients occasionally comment that we give too much choice. So I thought I would point out just three offers I like and in which have invested in myself. One VCT, one EIS and one SEIS.
Pembroke VCT - some of the lowest charges of any VCT
The Pembroke VCT, run by Oakley Capital, is more growth oriented than most. It invests in the earlier-stage companies VCTs were always intended for, so is relatively unaffected by new rules governing where VCTs can invest. The VCT focuses on four sectors the managers know inside out: health and fitness, media and technology, hospitality, apparel and accessories. The VCT leans towards high-class consumer brands, such as fashion label Alexa Chung, or the upmarket burger chain Five Guys. Refreshingly, Pembroke has some of the lowest charges of any VCT.
Silver Lining Screen EIS fund - a cautiously run EIS with up to 85% downside protection
It is estimated 6,000 new films are needed by the likes of ITV and Netflix each year. Yet supply is short. This fund will invest in a cautiously run portfolio of EIS-qualifying companies that will produce TV content to help meet that demand.
For every £1 invested, 75p to 85p typically supported by contractual revenues and film production tax credits.
Film and media is one of the most popular EIS sectors. We believe the Silver Lining Screen EIS is a welcome new edition worthy of consideration. It offers investors the potential of good returns whilst protecting the downside although you should note no EIS investment is risk free. The investment time frame of three to four years and a very clear exit strategy will be appealing to many investors.
Just opened – Amplify Music SEIS 5 – a music SEIS with downside protection
Following on from Amplify 4 in which I invested myself last year, Amplify Music SEIS 5 will invest in five artists with a few recordings under their belt and an established fan base. The fund will potentially profit not just from recording sales, but also from publishing, live events and merchandising.
Importantly, at least 50p per £1 invested should be underpinned by ‘minimum guarantees’. These include recording advances (against future sales), publishing advances (against future royalties) and live performance guarantees (against future fees). When you consider SEIS tax relief of 50%, an investor should benefit from considerable downside protection.
In addition, the fund is particularly well placed to choose artists with potential. It is a joint venture between Amp Channel Music and the Music Managers Forum (MMF), the global trade body for artist managers. MMF board members who are responsible for selecting the artists represent internationally-acclaimed artists such as Arctic Monkeys, Robbie Williams, Radiohead, Mumford and Sons and Sir Paul McCartney.
The target return is £1.45 per £1 invested (not guaranteed).
Photo credit: Images Money
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