Foresight Williams Technology EIS

Fund closing Wednesday 30 June 2021

The Foresight Williams EIS fund is managed by a collaboration between the Foresight Group, a £6.7 billion specialist asset manager, and Williams Advanced Engineering, a spin out of Williams Grand Prix Engineering.

The service aims to invest in early-stage, high-growth technology and engineering businesses where Foresight and Williams’ combined experience and technical expertise might offer a distinct advantage to investee companies.

The EIS fund is managed by ten investment professionals, four from Foresight Group, six from Williams. The team has been working together since 2015 and launched an EIS fund the following year, followed by a VCT in 2019.

To date the EIS fund has raised in excess of £50 million and invested £36.8 million into 20 investee companies.

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

  • Investing in early-stage, high-growth technology businesses 
  • Combined talents of Foresight Group and Williams Grand Prix Holdings
  • Minimum of 10 companies expected in the portfolio
  • £10,000 minimum investment – you can apply online

The manager

The EIS fund is managed by Foresight Group. Foresight Group now has £6.7  billion of assets under management, including £420 million in VCTs and EIS funds managed on behalf of over 24,000 investors . 

Williams Advanced Engineering Limited (‘Williams’) is the technical adviser to the EIS fund. Williams was formed in 2010 when Williams Grand Prix Engineering Limited spun out its specialist engineering division into a separate company. The business has since grown to more than 300 employees. In 2019 Williams was acquired by EMK Capital, a private equity group, with Williams Grand Prix Engineering retaining a minority stake. Williams continues to be based at the same Oxford campus as William’s Grand Prix Engineering.

Foresight believes Williams’ involvement will add value to its EIS and VCT funds in two ways. Firstly, Williams’ technical expertise should provide the team with enhanced due diligence on potential investee companies. Secondly, investee companies could benefit from Williams acting as a consultant to help develop, optimise or solve engineering problems, thereby potentially enhancing the company’s value, although there are no guarantees. Williams will provide pro bono advice and support, and any specific consulting projects will be provided at a discounted rate. Williams’ consultancy services will be provided at a discounted rate. 

Foresight believes the specialist technical knowledge of the Williams team; whether helping to design products that are cheaper and quicker to produce, understanding of electrical systems, where to file patents, or knowledge of advanced materials, has on occasion been instrumental in winning competitive funding rounds for investors in both the EIS and VCT. 

Foresight Group’s wider network of industry contacts should generate deal flow. The team will look for opportunities where Williams can add value through enhanced due diligence, technological, or engineering support. Note however this is not an opportunity to invest in businesses spun out of Williams, nor to co-invest with Williams. 

The investment team responsible for managing the EIS and VCT is made up of ten investment professionals: four from Foresight Group and six from Williams . The team is overseen by a seven strong investment committee which includes senior members of Foresight Group and Williams. The investment team can also draw on the wider experience of Foresight Group’s 30 strong private equity team.

Watch a video interview with investment manager John Holden:

Recorded 7 November 2018

Investment strategy

The Foresight Williams EIS fund aims to invest in early-stage companies with strong intellectual property, operating in attractive, substantive markets where the manager believes Williams’ technology, engineering, commercial and promotional support may offer a distinct advantage.

The EIS fund will invest between £500,000 and £3 million per company.

Foresight believes its focus on deep technology and innovative technologies within hardware and engineering sectors can often lead to Environmental, Social and Governance (ESG) benefits. 

The team looks for certain qualities when evaluating potential opportunities. For instance, investee companies must demonstrate they have developed innovative technology that offers clear advantages to the end consumer as well as a roadmap towards commercialisation within 24 months. Target markets should be in excess of £100 million per annum, and investee companies must be run by ambitious and experienced management teams. 

Williams’ core competencies are in:

  • Aerodynamics and thermodynamics
  • Battery systems and energy storage
  • Composites, materials and nanomaterials 
  • Data analytics
  • Electronics and control systems
  • Lightweight structures
  • Prototyping 
  • System Integration

It is expected (not guaranteed) the service will focus on opportunities where Williams’ technical, commercial or promotional support can add value.

Target return

The fund has not set a specific target return. Investee companies must have the potential to deliver 10x returns on exit, in the view of the investment management team. Please note, returns are not guaranteed and there are likely to be failures.

Exit strategy

The EIS fund, launched in 2016, has yet to experience an exit. Please note past performance is not a guide to the future. Foresight Group has  however had many exits as an investor in companies that could have been eligible candidates for this fund.

Foresight will lead the exit strategy. It is expected that most businesses will be sold to third party trade buyers rather than floating on a stock market, typically 4-8 years after investment.

Portfolio

The Foresight Williams EIS and VCT have together raised in excess of £50 million from investors to date and have invested £36.8 million into 20 companies (January 2021).

The EIS fund targets a minimum portfolio of 10 companies with funds fully deployed across 18 to 24 months (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. 

ReFeyn – Foresight WilliamsRefeyn

Identifying and measuring protein molecules is an integral part of life sciences research, particularly in the development of new medicines. Refeyn is commercialising a disruptive technology that uses light to measure a molecule’s mass (mass photometry). The patented technology was invented at and spun out of the University of Oxford and allows users to characterise molecules significantly faster and at a lower cost than existing techniques. 

Foresight Williams first invested £1.2 million into the business in February 2019 alongside Oxford Sciences Innovation. In 2020 the EIS and VCT invested an additional £2.1 million  as part of a larger growth funding round led by Northpond Ventures, a $1 billion US Life Sciences fund, Oxford Sciences Innovation, the University of Oxford, and Hong Kong-based Horizon Ventures. The investment will future support the commercialisation of Refeyn’s technology and position the company for future growth.

Open Bionics – Foresight Williams EISOpen Bionics

Open Bionics is a Bristol start-up that is developing a new wave of advanced bionic hands and arms. The company uses 3D printing and scanning technology to produce custom-made prosthetics at a lower manufacturing cost than usual, in an area considered an expensive area of prosthetics. Its first commercial product, the Hero Arm, secured commercial licenses from Disney, Marvel and Pixar to design arms for children with themes from Star Wars, Frozen and the Marvel Universe.

Foresight Williams invested £1.5 million alongside Downing LLP, Ananda Impact Ventures and Rathbone Nominees to complete a joint £4.66 million funding.

The deal was sourced via WAE’s relationship with the Bristol Robotics Laboratory. Following investment, the team at WAE have supported Open Bionics in areas such as programme management. Open Bionics is also benefiting from the investment management and growth experience of Foresight’s team of investment professionals.

Examples of previous exits and failures

To date, the Foresight Williams EIS Fund has had no failures or positive exits. Please note, due to the nature of early-stage investing, you should anticipate some failures. Past performance is not a guide to the future. 

Performance

The fund was launched in 2016 and has not yet had any exits or failures, please note past performance is not a guide to the future.

The chart below shows the average performance of the total subscribed into the fund each tax year, based on valuations as at 30 June 2020, expressed on a £100 invested basis. Please note, individual investor portfolios’ performance will deviate from the average.

Source: Foresight, as at 30 June 2020. Performance figures are supplied by Foresight and are net of all fees, based on Parkwalk valuation methodology. Past performance is no guide to future performance. In the above figures, initial tax relief of up to 30% could also apply on sums invested after paying initial fees. So, for the tax year 2017/18, the total return including initial income tax relief would be £119 – 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.

Exit could take considerably longer than the three year minimum holding period.

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 5.5%
Wealth Club initial saving 0.5%
Net initial charge through Wealth Club 5%
Annual management charge 2%
Administration charge 0.3%
Performance fee 20%
Investee company charges
Initial charge Up to 5%
Annual charges 1%
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 manager expects it will take up to two years to fully deploy investors’ subscriptions, although it targets completing this in around 18 months – not guaranteed. 

Our view

The Foresight Williams EIS proposition has enjoyed some success in raising capital since it launched in 2016. The fund has now invested £36.8 million into 20 investee companies, often in highly competitive funding rounds.

The involvement of Williams Advanced Engineering appears to add a disciplined sector focus to the investment strategy and an avenue in which the team might look to add value to investors’ capital. The combination of a large asset management business with a cutting-edge advanced engineering business may create a compelling destination for entrepreneurs seeking funding. Please note the track record is limited, and there are no guarantees.

The EIS fund is designed to offer investors exposure to a portfolio of at least ten early investee companies developing technologies within hardware and engineering sectors. This is a specific and differentiated EIS offer may offer diversification benefits to seasoned EIS investors. You should form your own view.

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
Technology
Target return
Not specified
Funds raised / sought
-
Minimum investment
£10,000
Deadline
30 Jun 2021 fund close
Last updated: 1 February 2021

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