Green Angel Syndicate EIS/SEIS Climate Change Fund
Green Angel Syndicate (“GAS”) is the only angel network in the UK that specifically targets investments tackling climate change and global warming. To date, it has made 28 EIS-qualifying investments and it claims its combined portfolio has prevented over 38,000 tonnes of CO2 pollution – equivalent to removing 18,000 cars off the road for a year.
The syndicate was founded in 2017 with a handful of investors. It has since grown to over 300 members with £14.2 million invested to date.
GAS launched its first EIS/SEIS fund in 2020 and this is its third iteration. The fund will co-invest with the syndicate in companies GAS believes capable of reducing emissions and protecting the environment.
The fund is targeting a portfolio of 10-15 investee companies the manager believes can demonstrate the potential to have a significant positive environmental impact. The fund intends to deploy investor capital over 12 months.
- Focus on climate change and global warming
- Potential blend of EIS and SEIS opportunities
- Co-invest alongside an angel network of 300 members
- Target return of £2 per £1 invested, not guaranteed
- Target portfolio of 10–15 companies, not guaranteed
- Minimum investment £15,000 – (you will need to qualify as an EPC client of SFC to invest)
Green Angel Syndicate was founded in its current form in 2017 by Nick Lyth (CEO) and Simon Acland (Chairman). Nick is a marketing and sales specialist and spent over a decade developing the International Resources and Recycling Institute (IRRI) – an applied research institute focused on improving global resource use. Simon is an active angel investor and was the managing director of Quester Capital Management, an early-stage VC investor, for 19 years. He currently sits on several boards, including Triple Point Income VCT, as well as the investment committee of Angel CoFund.
The pair originally launched the syndicate with just ten investors and in four years this has grown to over 300 members. To join the syndicate, individuals should have experience or expertise in Green Angel’s target sectors. The most active members form a core group of Associates who contribute to the assessment and selection of potential opportunities.
Antoine Pradayrol is Chief Investment Officer for the fund. Antoine spent 15 years as an equity research analyst and was an executive director and partner with Exane BNP Paribas. He is supported by an investment committee of five as well as the wider GAS team which oversees management of the syndicate.
GAS is the fund adviser and will conduct research, carry out due diligence, and recommend potential companies to SFC Capital Partners, the fund manager.
Climate change is a consequence of global warming – the gradual increase of the Earth’s overall atmospheric temperature. While several factors contribute to this, the main aggravator is the growing concentration of CO2 in the atmosphere. Over the last 60 years, the annual rate of increase in CO2 is more than 100x faster than previous natural increases. So, reducing CO2 emissions, as well as other pollutants, is essential to prevent further climate change.
In this respect, GAS will assess two key metrics: emission reduction (this is not necessarily limited to CO2) and/or ecosystem restoration and regeneration. In both circumstances, the primary measurement of impact will be the amount of CO2e (carbon dioxide equivalent) emissions prevented. Companies will also be benchmarked against the UN’s Sustainable Development Goals to highlight impact away from CO2 mitigation.
Investee companies must demonstrate the potential to have a significant positive environmental impact to be considered for the fund.
On average, GAS receives between 600–700 applicants each year of which only a small percentage will be considered for investment. Each application is assessed via a six-step filtering process which includes a pitch to the syndicate. To receive investment from the fund, the company must secure investment from the syndicate as well.
The fund predominantly targets EIS opportunities, however, it also has capacity to invest up to 20% in SEIS.
The fund’s target return is £2 per £1 invested (after EIS tax relief and fund fees) over an estimated holding period of seven years. Returns and timeframes are not guaranteed.
GAS anticipates exits routes to include trade sales or IPOs. The proposed holding period for companies is between five to ten years, however, realisations may take longer and are not guaranteed.
The fund aims to provide investors with a portfolio of 10–15 companies. Most of the investments are expected to be EIS qualifying, with the potential to have a small minority of SEIS-qualifying investments in the portfolio - not guaranteed. The maximum allocation to any one company is limited to 15%.
GAS expects most companies will fall into the following sectors:
To date, GAS has invested £14.2 million across 28 companies, all of which were EIS-qualifying.
The companies outlined below are historic investments made by GAS. They are examples of the types of companies an investor might expect but are unlikely to form part of a new investor's portfolio.
Based on research from the University of Bristol, QLM has developed a patent-pending quantum gas detection camera, that uses a Lidar beam to visualise and quantify greenhouse gas emissions. Its unique technology means it is highly sensitive, long-range, and can precisely map gas leak locations and flow rates.
The technology has been designed to detect methane gas leaks, a billion-dollar market. Methane is a potent greenhouse gas and has more than 80x the warming power of CO2 in the near term.
One of the largest contributors of methane pollution is the oil and gas industry – which in 2020 emitted just over 70 million metric tons of methane into the atmosphere. As part of a raft of new regulation changes, the industry has committed to reduce and report emissions and therefore requires more effective monitoring techniques. QLM’s technology offers an industrially scalable solution which enhances compliance and emissions reduction when compared to previous labour-intensive methods.
In 2021, QLM was named as one of the winners of Bloomberg’s Pioneers program, an annual selection process that seeks to identify early-stage leading innovators driving the low-carbon transition. Shortly after, QLM closed a £3.1 million seed funding round, led by Green Angel Syndicate. Other coinvestors included Newable Venture Fund, the Development Bank of Wales, British Robotics Seed Fund, and Champion X.
Rovco’s specialism is submersible autonomous vessels. Its founder, Brian Allen, spent most of his career working with submersible vehicles and held a variety of positions including pilot, engineer, and even shipwreck hunter.
After over a decade in the industry, Brian launched Rovco to develop and deliver new technologies for the sector. Rovco’s focus is 3D computer vision and artificial intelligence as these provide the biggest efficiencies in terms of cost and time. Using its autonomous vessels, Rovco can coordinate crewless surveys and marine work. Such tasks would normally require a ship with a 50-man crew and can cost upwards of $100,000 a day.
Currently, Rovco mainly services offshore windfarms, however, its technology has recently been spun off into a subsidiary, Vaarst. Rovco will continue to target windfarms, whilst Vaarst will look to scale the offering to the global marine market– a $4.1 billion potential opportunity .
GAS first invested in Rovco in November 2018 and has since participated in two further rounds, one of which was alongside strategic investor, Global Marine. In that time, the company has grown revenues to £7.5 million (2020), an increase of 286% on the previous year – note past performance is not a guide to the future.
Exit and failure examples
This is a relatively new fund and to date, the fund has not achieved any exits or had any failures, however, due to the nature of early-stage investing, you should anticipate some failures.
The performance chart below shows all EIS-qualifying investments made by Green Angel Syndicate to January 2022, rather than the investments made specifically by the EIS fund.
The chart shows the average performance of the total subscribed each year, based on valuations as at 6 January 2022, expressed on a £100 invested basis.
Performance per £100 invested in GAS EIS-qualifying investments each tax year
Source: GAS. Figures correct as at 6 January 2022, 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/SEIS 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/SEIS 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.
Any exits are likely to 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||—|
|Performance fee||25%||Investee company charges|
More detail on the charges
Timing of the offer
The fund aims to deploy investments within 12 months of the closing date; however, it may take longer.
The Green Angel Syndicate EIS/SEIS Climate Change Fund looks to invest in early-stage, growing companies that could have a meaningful impact in preventing and reducing the effects of global warming.
To do so, the fund has centred its investment strategy around the Green Angel Syndicate, its own network of angel investors. The syndicate offers deal flow opportunities together with deep sector expertise which should add resources and complement the investment team’s own due diligence process. Furthermore, the fund will only invest in deals the syndicate is prepared to co-invest in, providing an added layer of external validation to the fund.
Overall, the investment strategy seems disciplined and the investment process appears well thought-through. However, it is important to note the portfolio is still young and it is too early to comment on the performance of this strategy.
In our view, the offer may have appeal to experienced investors seeking targeted exposure to an increasingly important global theme.
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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