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 executive support, an approach it calls “Executive Capital”. 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.
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- Technology focus, in areas such as FinTech, electrical 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. In 2009 it completed a management buyout of its Australian parent company Committed Capital Pty Limited, established in 1998.
Committed Capital’s investment team consists of eight professionals with backgrounds in investment banking, corporate finance and accountancy.
The investment team 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.
The fund is managed by Sapia Partners with Committed Capital acting as the investment adviser.
Watch a video interview with Steve Harris, CEO of Committed Capital:
Committed Capital believes fast-growing companies require support from their investors – in addition to funding – to realise their potential. Typically, Committed Capital will appoint a non-executive director to the boards of investee companies. Much of the team’s time is spent providing support in finance, strategy and governance.
The Committed Capital Growth EIS fund aims to invest in high-growth technology companies with proprietary technology, for which there is high 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 low competitive intensity.
- Well positioned company – A strong management team, robust forecasts for rapid growth over the investment period and clear potential for exit.
- In-demand product – A fully developed product or service, addressing a clear market need, with a sustainable, technology-based, competitive advantage.
- Post-revenue – Generating significant sales (typically in excess of £1m per year on a forward-looking annualised basis).
- Investor interests – 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 the amount invested after three to five years, before any EIS tax reliefs. Returns and timeframes are not guaranteed.
The fund aims to realise its investments after they have been held for three years. It is anticipated that exits will occur after three to five years from the investment, 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 - £5 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.
Knowledgemotion – trading as Boclips (recent investment)
Pitched as the ‘Netflix for education’, Boclips provides teachers with a huge library of educational videos. It aggregates some of the biggest names in content production such as the BBC, Bloomberg, and TED Talks, all in one place. Each video is mapped using algorithms to topics taught throughout the school system, allowing teachers to quickly find suitable videos for the classroom or assignments.
The company’s founder, David Bainbridge, made his career in TV, helping to launch Channel 5 as well as the BBC iPlayer. His background played an important part in encouraging big organisations to come together under the same platform.
Currently, the platform has more than 2 million videos available, with content across school and university levels.
Committed Capital first invested in Boclips in March 2019. The investment team were attracted to the fast-growing market, the lack of competition in the sector, and the strength of the management team.
Living Map is a leading provider of next-generation digital mapping and mapping services. It creates rich-content digital maps that can be defined and configured through its SaaS platform, allowing the visualisation of data from multiple sources and integration of other applications in real-time.
Living Map is in the late stages of developing proprietary, patent-pending software which provides hardware-independent on-device location positioning. The value of this is that it allows users, to a high degree of accuracy, to know the location of people or assets on their sites without GPS, WiFi or beacons.
Future sales are increasingly focusing on SaaS partnerships with global organisations to accelerate growth. Current and potential global partnerships are with IBM, Engie, STAR Alliance Group, ADAPT and a number of airports and cities.
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 2.7x (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 one exit and two partial exits from 15 EIS-qualifying investee companies. Each exit has been profitable, generating returns to investors of between 2.2x and 3.9x excluding tax relief.
For investments made more than five years ago (2014/15), on average for every £100 invested the fund has generated £115 in realised returns and has a remaining portfolio balance of £231 (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 31 December 2020, expressed on a £100 invested basis. Please note, individual investor portfolios’ performance will deviate from the average.
Source: Committed Capital, as at 31 December 2020. 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. So, for the tax year 2015/16, the total return including initial tax relief would be £112, 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 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.
Tax rules can change and benefits depend on circumstances.
This EIS fund invests in early-stage businesses which are more likely to fail than larger ones. So you should expect a number of failures in the portfolio, or even be prepared for all companies to fail.
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.
Exit may take considerably longer than the three year minimum holding period.
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 management 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’s “Executive Capital” investment approach has been in place 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.
Despite launching only in 2014, the fund has had some success, achieving one full and two partial exits from investments into 15 investee companies over the last five years: note past performance is not a guide to the future.
Read important documents and apply
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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