Committed Capital Growth EIS Fund
The Committed Capital Growth EIS Fund seeks to invest in early-stage technology businesses across a range of sectors. Committed Capital provides both capital and extra finance, strategy and governance support. The Growth EIS fund was launched in 2014, however, Committed Capital has been investing along these lines for more than two decades, on behalf of its investment syndicate of over 150 successful entrepreneurs and senior professionals. This syndicate still provides valuable deal flow.
Investments are considered once a company has demonstrated an ability to generate sales of over £1 million per annum. Committed Capital looks to take a significant minority shareholding and a board seat in each investee company.
Read important documents and then apply
- Technology focus, in areas such as FinTech, electric vehicles, IoT (Internet of Things), SaaS (Software-as-a-Service) and EdTech
- Target portfolio of 8-12 companies, not guaranteed
- A close-knit team of experienced investment professionals
- Target return of 2-3x, not guaranteed
- Minimum investment £15,000 – you can apply online
Committed Capital Ltd (“Committed Capital”) is an investment and corporate advisory business based in London. The business was initially founded in 1999, and was bought out by the management team in 2009.
Committed Capital’s investment team consists of ten professionals with backgrounds in investment banking, corporate finance and accountancy. It is led by Steve Harris, Chief Executive Officer. Steve joined the business in 2004 and is its largest shareholder. He has worked in investment and corporate finance for nearly 30 years and has held a number of senior roles, including Director of Corporate Finance at Société Générale and Head of Mergers and Acquisitions at PA Consulting. Between 1999 and 2003, Steve was Finance Director of investment banking at antfactory, an internet start-up incubator which grew to become one of the UK’s leading technology investment vehicles with $600 million assets under management.
Supporting the investment team is Committed Capital’s Syndicate and advisory board. The Syndicate comprises over 150 successful entrepreneurs and businesspeople. The Advisory board is made up of three individuals with significant experience in private equity, investment banking and entrepreneurship. Both the Syndicate and advisory board introduce investment opportunities to Committed Capital, provide support and guidance to the portfolio companies and invest their own capital. Committed Capital sees approximately 500 deals per year.
Committed Capital believes fast-growing companies require operational support from their investors – as well as funding – to realise their potential. Typically, Committed Capital will appoint a non-executive director to the boards of investee companies, providing support on finance, strategy and governance issues.
The Committed Capital Growth EIS fund aims to invest in high-growth technology companies with proprietary technology, for which there is significant demand. Typically, Committed Capital favours B2B businesses over consumer-facing ones, which tend to have higher go-to-market costs.
The fund typically invests when it believes the following criteria are met:
- Dynamic market – A fast-growing addressable market with little competition.
- Well positioned company – A strong management team, robust growth forecasts over the investment period and clear path to exit.
- In-demand product – A fully developed product or service, addressing a clear market need, with a sustainable, technology-based, competitive advantage.
- Post-revenue – Achieving significant sales (typically on track for £1 million+ in the coming year).
- Investor protections – A significant minority (often 20-40%) of the equity in the business, a board seat and typical shareholder rights are required.
Sectors in which Committed Capital have made investments to date include software as a service, education technology, security, internet of things, fintech, and electric vehicles.
The Committed Capital Growth EIS fund targets a return of 2-3x after three to five years, before any EIS tax reliefs. Returns and timeframes are not guaranteed.
The fund aims to realise its investments only after they have been held for three years, although this is not guaranteed. Possible realisation routes are trade sales, management buyouts, share buybacks, or refinancing. IPOs may also be considered as appropriate.
Committed Capital aims to invest in 8-12 companies. No single company investment (at cost) should account for more than 15% of the portfolio. The fund will seek to make investments into companies which are achieving sales of over £1 million per annum, on a forward-looking annualised basis. Committed Capital looks to invest £1 - £3 million in each opportunity.
The companies outlined below are historic investments made by the Committed Capital Growth EIS fund and give a flavour of the types of companies a new investor might expect. EIS funds tend to be managed on a discretionary basis so each individual portfolio is likely to be different.
CHC Global – recent investment
CHC is a specialist insurance broker and risk adviser. The company was founded in 2016 by Chris Holt, after eight years in the Lloyd’s Insurance Market and a 10-year career in the Royal Engineers, during which he received an MBE for services to Bomb Disposal.
CHC’s consultancy services help corporate and individual clients understand and manage malicious risk. CHC will help develop the systems and governance necessary to handle adverse events, from kidnapping to cyberattacks. This is supported by a global terrorism insights platform and paired with a specialist insurance broking business allowing customers to pass risks through to international underwriters.
The company is already profitable, and projected to grow substantially over the next three years - although as with any small company this cannot be guaranteed. Committed Capital initially invested in the business in July 2021, attracted by the logical combination of insurance and expert advisory tools in what it believes is a growing market.
Gone are the days of lugging a backpack full of expensive and heavy textbooks around a university campus. Instead, those same textbooks can now be accessed online – particularly useful during the enforced remote learning many students experienced during the pandemic.
Kortext is the UK’s leading digital textbook platform. Since it was launched in 2013 the company has grown to offer over 2 million digital textbooks from over 4,500 publishers. It serves over 50% of UK universities and 85% of the Russell group – and is increasingly expanding globally, working with students in 80 countries around the world.
Committed Capital first invested in the business in April 2016, and provided further funding in 2017, 2018, 2019 and 2020. Kortext has also received support from DMG Ventures, the Daily Mail’s investment arm which has previously backed Cazoo and Zoopla, most recently at a pre-money valuation of £111 million.
Committed Capital’s total investment is currently valued at 3.3x cost.
FSB Technology (UK) Ltd – example of previous exit
Founded in 2007, FSB is a leading B2B sports and internet gaming technology supplier. Using a SaaS business model, the company offers full end-to-end sports betting and internet gaming solutions, including data and pricing feeds, proprietary sports betting software, and fully managed trading services.
Committed Capital investors’ holding in FSB Technology (UK) Ltd was bought by strategic buyer Clairvest Group Inc in July 2019. Investors achieved a return on investment of 2.8x (before tax relief), in line with the fund’s target return of 2-3x return. Past performance is not a guide to the future.
Example of previous failures
No company backed by the Committed Capital EIS Growth fund has failed to date. Please note due to the nature of early-stage investing, you should anticipate some failures. Past performance is not a guide to the future.
Since launching the EIS fund in 2014, Committed Capital has achieved two exits from 16 EIS-qualifying investee companies. Both exits were profitable, generating returns to investors of between 2.8x and 3.5x.
For investments made more than five years ago (2014/15 and 2015/16), every £100 invested in the fund has on average generated £76 in realised returns with a remaining portfolio balance of £101 (before tax relief).
The chart below shows the average performance of the total subscribed into the fund each tax year, based on valuations as at 5 January 2022, expressed on a £100 invested basis. Please note, individual investor portfolios’ performance will deviate from the average.
Performance per £100 invested in each tax year
Source: Committed Capital, as at 5 January 2022. Figures are net of all fees. Past performance is no guide to future performance. These figures do not include any realised returns which would be available through loss relief. In the above examples, initial tax relief of up to 30% could also apply. Remember tax rules can change and tax benefits depend on circumstances.
Risks – important
This, like all investments available through Wealth Club, is only for experienced investors happy to make their own investment decisions without advice.
EIS investments are high-risk and should only form part of a balanced portfolio. As must be expected with early-stage investments, some or even all of the companies in the portfolio could fail: the fewer the companies included in the portfolio, the higher the risk of loss if things don’t go to plan. You should not invest money you cannot afford to lose.
There is no ready market for unlisted EIS shares: they are illiquid and hard to sell and value. There will need to be an “exit” for you to receive a realised return on your investment. Exits are likely to take considerably longer than the three-year minimum EIS holding period; equally, an exit within three years could impact tax relief.
To claim tax relief, you will need EIS3 certificates, normally issued once shares have been allotted. This can take several months: please check the deployment timescales carefully. Tax reliefs depend on the portfolio companies maintaining their EIS-qualifying status. Remember, tax rules can change and benefits depend on circumstances.
Before you invest, please carefully read the Risks and Commitments and the offer documents to ensure you fully understand the risks.
The fund relies heavily on the knowledge and experience of Steve Harris. Whilst Steve is the largest shareholder of Committed Capital, the key-person risk is worth highlighting.
A summary of the main charges and savings is shown below. Some of these will be payable by the investor, whilst others by the investee companies. The investment may have additional charges and expenses: please see the provider documents, including the Key Information Document, for more details.
|Full initial charge||1.5%|
|Wealth Club initial saving||—|
|Net initial charge through Wealth Club||1.5%||Annual management charge||2%|
|Performance fee||20%||Investee company charges|
|Initial charge||3%||Annual charge||—|
More detail on the charges
Timing of the offer
Committed Capital anticipates taking up to 12 months to fully deploy investor capital.
Committed Capital has been following its more ‘hands-on’ investment approach for over two decades. The company’s chief executive, Steve Harris, has led the investment team since 2004. The experience Steve brings to this EIS offer – and to investee companies seeking executive capital – is key to its appeal.
The “hands on” approach has led to a relatively concentrated portfolio. In total the fund has invested £58.6 million into 16 investee companies. The fund has enjoyed some success, two profitable exits have returned £13.1 million to investors, and the portfolio contains several promising investments, including Saietta, which listed on AIM in 2021, and Kortext, detailed above: note past performance is not a guide to the future.
Committed Capital is a well resourced and experienced investment boutique, and investors may find the managers’ focus on a small number of investments appealing to diversify a wider investment portfolio, although you should form your own view.
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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