EMV Capital Evergreen EIS
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The EMVC Evergreen EIS fund is a relatively new offer from EMV Capital Ltd. The fund is focused on Seed and Series A/B investment opportunities in companies operating in the industrial high-tech, energy, resource efficiency and smart cities sectors. Examples might include businesses using AI and robotics, the internet of things (IoT) or electronics.
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- Aims to invest in technologies that drive advancements of British high-tech industry
- Target return of £3 per £1 invested after six years – not guaranteed
- Investors should hold around four to six EIS qualifying companies
- Experienced team that has previously co-invested alongside international corporates such as ABB Group, Mitsubishi and Philips Lighting
- EMV Capital won ‘Best Newcomer for 2018’ at the EIS Association awards in February 2019
- Minimum investment £10,000 - you can apply online
EMV Capital is headed by Dr. Ilian Iliev, who spun it out from EcoMachines Ventures. Ilian leads the investment advisory team and is a board member of a number of EMVC portfolio companies. He holds a PhD from Cambridge University’s Judge Business School; MCom in Economics, and a BA in Politics, Economics and International Relations from the University of Witwatersrand.
The EMV Capital team has a history of investing in technology companies since 2014, this was through EcoMachines Ventures. In total, the team invested into nine companies, of which five were EIS-eligible, however, this is their first EIS fund. Currently the team is relatively small, with just six members, however this is expected to change as the fund recruits to support its growth. EMV Capital won ‘Best Newcomer for 2018’ at the EIS Association awards in February 2019.
EMV Capital is the investment adviser. The fund manager is Sapphire Capital Partners.
Watch a video interview with Dr Ilian Iliev:
EMV Capital focuses on B2B and B2B2C companies in the areas of industrial high-tech, clean energy, smart cities, and transportation. The EMV Capital team has collaborated on previous deals with ABB, Philips Lighting, Mitsubishi, Total, Evonik and Flex.
The fund will seek businesses with proprietary innovation in hardware or hardware-enabling software. Due to the nature of this sector, it is possible that these kinds of investments will require follow-on funding because of larger capital requirements. The time to maturity is also potentially longer, with investments expected to be held for six to eight years.
Any investment should be able to demonstrate a technology or product solution designed for a large and quantifiable market need, interest in the solution from large corporates, and an established core team with relevant experience and expertise.
Deals will be sourced from EMVC's existing network which includes universities, accelerators, and corporate referrals. In a year, EMVC expects to review around 100 EIS-qualifying companies, of these it is estimated that only around 4% of deals will be accepted into the fund.
As well as providing investment, EMVC seeks to take a hands-on approach by taking a seat on the board, assisting with the development of the business plan and providing access to industry experts.
Investors should hold a portfolio of between four to six companies. The fund will typically invest between £200,000 to £1,000,000 in companies raising at the Seed or Series A-B stages.
Exits are expected to be achieved by trade sales to corporates – however, exit options and timeframes are not guaranteed.
Investors may have the opportunity to invest additional capital into the portfolio outside the EIS fund structure.
The fund targets a return of £3 per £1 invested after six years, but it may take longer. Please note, returns and timeframes are not guaranteed.
The exit strategy will vary depending on each investment. Due to the fund’s focus, it is anticipated that for most investments, trade sales to corporates or secondary sales to financial investors will be the most likely exit routes, although there are no guarantees.
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.
Q-Bot develops robots for the building and engineering industry. Its first application is in underfloor insulation for Victorian and early-20th century housing, leading to significant decreases in heat loss and thus heating bills. Q-Bot’s patent-protected solution has already led to relationships with a number of city councils and housing associations.
In May 2019, Q-Bot's insulation technology was approved under the government's Energy Company Obligation 2 scheme. This will allow Q-Bot to secure government fund to subsidise the cost of its service as well as increase the types and number of properties it can access.
SageTech Medical Equipment
Although an essential part of modern medicine, anaesthesia is a significant pollutant. In fact, the global warming potential of some anaesthetic drugs can be up to 2,500 times greater than carbon dioxide.
The main cause of the emission is desflurane, a modern anaesthetic agent and potent greenhouse gas. During a typical anaesthetic procedure, a patient may only process as little as 2.5% of the gas and the rest is vented back into the atmosphere. This is not only damaging to the environment but inefficient, costing the NHS around £50-£60 million pounds a year.
As a solution, SageTech has developed a patented closed-loop procedure to capture waste agents allowing them to be collected, purified and reused. Additionally, with the use of robotics and automation, SageTech has been able to demonstrate this process at a commercially viable level.
In September 2018 the company was granted an Innovate UK Grant to collect anaesthetic waste across multiple NHS Trusts and to develop a new purification facility in Devon. EMVC identified the company through its internal research process and invested in 2019. The investment will be used to grow the team and support the company as it expands into new markets.
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.
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 providers documents, including the Key Information Document, for more details.
|Full initial charge||0.75%|
|Wealth Club initial saving||—|
|Net initial charge through Wealth Club||0.75%||Annual management charge||1.05%|
|Performance fee||20%||Investee company charges|
More detail on the charges
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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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