Edition EIS

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You could call this an “experiential” EIS. Consumers increasingly prefer to spend disposable income on experiences over products. These experiences are the kind of opportunity the Edition EIS will target: live entertainment, hospitality, competitive socialising, lifestyle and consumer engagement.

Important: The information on this website is for experienced investors. It is not advice nor a research or personal recommendation to invest. If you’re unsure, please seek advice. Investments are for the long term. They are high risk and illiquid and can fall as well as rise in value, so you could get back less than you invest.

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Highlights

  • Investors can expect to hold between 8 to 12 companies offering leisure experiences, such as festivals, fast casual dining or yoga studios
  • Focus on investing in companies that are already profitable or approaching profitability
  • Aims to deploy funds within 6-9 months after each tranche close, not guaranteed
  • Investment team has hands-on experience of investing in the sector
  • Target of £2 per £1 invested after 4-7 years (not guaranteed)
  • Minimum investment: £25,000

The manager

The team at Edition Capital started out at media investment specialist Ingenious working within the Live Entertainment division. Between them, they have managed and advised on more than £400 million of investment, of which £175 million was in tax-efficient products.

The team is led by Paul Bedford (Non-Executive Chairman) who began his career as a Chartered Accountant. Subsequently, he has spent over 40 years in the media & leisure industry, including 14 years at Ingenious. Paul has served as Finance Director on the boards of companies such as Cream Group (dance festivals), 19 Entertainment (the company behind Pop Idol and the Spice Girls) and SPZ Group (music management and production). There are three other partners: Lisa Boden, Harry Heartfield and Adam Spence.

Supporting them are three independent non-executive committee members responsible for investment strategy. 

David Heartfield held senior roles at IMG before leaving to form CSS Stellar and heading the entertainment division. The company went public in 2001. David set up Rewind Festival in 2008.

Martin Goldschmidt is MD and founder of Cooking Vinyl Group, home to The Prodigy, Marilyn Manson, Richard Ashcroft and The Cranberries. Mr Goldschmidt has sold two businesses: one to Sony Red and one to Rob Challice/CODA.

Jonathan Jackson set up JBS Media in 2001 to provide media consulting services. Before this, Mr Jackson spent six years at DRG, the UK’s largest independent international TV distributor, first as COO and latterly as Group Managing Director. 

Investment strategy

Consumers – particularly those of the millennial generation – are increasingly spending their disposable income on experiences rather than products. Accordingly, UK leisure spending has grown significantly, with the sector on track to reach £141 billion by 2022. To address this, Edition targets companies offering experiences rather than physical goods.

Within these areas, Edition looks for companies with proven business models and an ability to adapt to consumer demand. Companies should have strong management teams with a track record of executing similar strategies in the industry. Where possible, Edition will also target businesses who have already reached profitability and require further capital to scale. It is expected that at least 70% of the portfolio should be profitable at the point of investment.

Edition will use its industry connections to source deals not typically available to the wider venture capital market. The team will offer hands-on operational and strategic support to investee companies with an emphasis on improving operational efficiencies and profit margins. If required, companies can also make use of Edition’s Advisory Team, although this will incur an additional fee.

Target return

The fund aims to return £2 per £1 invested amount over a 4-7 year investment period, not guaranteed.

Exit strategy

Edition anticipates exit routes for successful investments are likely to be a trade sale or management buyout, not guaranteed. 

The fund has yet to achieve an exit (or have any failures), however, it only launched in 2017 so the majority of investee companies have yet to reach the minimum three-year holding period.

Portfolio

Since April 2017, the fund has invested over £50 million into 28 companies. It is expected that investors should receive exposure to 8-12 companies, with a minimum of 4 (not guaranteed). 

Below are portfolio company examples from previous iterations of the fund. They are outlined to give a flavour of the types of companies you might expect but are unlikely to be part of a new investor's portfolio. 

Borrow a boat – Edition EISBorrow a Boat

Following the Airbnb model, Borrow a Boat allows individuals to hire boats on demand while owners can easily rent out idle vessels. 

Founder, Matt Overden, launched the business after struggling with overly strict and inflexible chartering rules. He self-funded the business initially before launching the idea at the London Boat Show in 2017 where the company received an overwhelmingly positive reaction from consumers as well as manufacturers. Accordingly, annual revenues increased by 300% between 2018-19 and the company is now the UK’s largest boat charter marketplace . 

Edition was introduced to the company through a professional client and has subsequently supported the company through two funding rounds. Edition EIS contributed £1 million  in the most recent fundraising round, alongside other private investors to support the company’s domestic and international growth plans.   

Incipio Group – Edition EISIncipio Group

Launched in 2015, Incipio looks to create new social venues from unused or temporarily dormant sites. The businesses originated in Shepherd’s Bush Market after founder Charlie Gardiner converted a railway arch into a bar. The location expanded rapidly and led to the company developing its first major project ‘Pergola on the Roof’ in 2016. Inspired by childhood trips to France and Italy, Pergola aims to recreate the European alfresco dining experience.

The business revolves around keeping up with trends, so even if a site is permanent, Incipio will only grant short leases to restaurants – this means the venues can change frequently. Sites will be revamped and relaunched every few months. Since its first venture, the business has setup three more sites as well as its first permanent location, Pergola Olympia London. Over the last three years, Incipio venues have hosted over 1.6 million people through London and the company now has a portfolio of 10 locations.

Edition first encountered the business after looking into non-traditional food and beverage operators. In total the EIS fund has invested over £2 million into the company. 

Performance

The manager has to date not supplied performance details in the format used for other EIS offers on this website. 

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.

Charges

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

Investor charges
Full initial charge
Wealth Club initial saving
Net initial charge through Wealth Club
Annual management charge
Administration charge
Performance fee 20%
Investee company charges
Initial charge 5.5%
Annual management charge 2.15%
All fees and charges are stated exclusive of VAT, which may be applicable in some cases. Any fees and charges payable by the investee companies or the underlying businesses do not directly come out of your investment. However, they will effectively reduce the returns generated by investee companies and therefore impact your investment.

More detail on the charges

Timing of the offer

The fund anticipates taking between 6-9 months to fully deploy investor capital following the closing dates. However, it may take longer.

The fund has quarterly closes, the next allotment deadline is expected to be 5 October 2020.

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.

The details

Type
Fund
Sector
Leisure
Target return
2x
Funds raised / sought
-
Minimum investment
£25,000
Deadline
5 Oct 2020
Last updated: 15 May 2020

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