University of Cambridge Enterprise Fund VII

Update (20 April 2020) - Offer closed

Please note, this offer is now closed. Any applications already submitted will be processed on a first come, first served basis.

Launched in 2012, the University of Cambridge Enterprise funds offer Cambridge alumni and investors opportunities to invest in early-stage science and technology companies as they spin out of Cambridge University, one of the top four universities in the world. 

This is the seventh University of Cambridge Enterprise EIS fund. It is a partnership between Parkwalk Advisors and Cambridge Enterprise, the commercialisation arm of the University of Cambridge. 

There is limited capacity. An exclusive allocation of £250k has been reserved for Wealth Club investors. Wealth Club is the only non-advised broker to offer this.

Highlights

  • Experienced portfolio manager
  • Exclusive deal flow from the University of Cambridge 
  • Co-investment opportunities with institutional investors, including Parkwalk’s parent company IP Group
  • Minimum investment £25,000

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.


Cambridge Enterprise FundThe manager

This fund is managed by Parkwalk Advisors. Cambridge Enterprise is the Portfolio Advisor. 

Parkwalk

Parkwalk is an experienced and award-winning EIS fund manager. Founded by Alistair Kilgour and Moray Wright, it is the UK’s most active investor into the university spin-out sector. The companies in which it has invested have raised over £1 billion in fundraising since 2010. This has been achieved through its relationships with UK Russell Group Universities and increased resourcing after its merger with IP Group, a leading IP commercialisation company, in 2017. 

Cambridge Enterprise

Cambridge University is a hub for research and innovation. The university has a pedigree spanning over 800 years and has been home to over 100 Nobel Prize winners and discoveries such as stem cell research and IVF.

Part of the University itself, Cambridge Enterprise was launched in 2006 to help commercialise ideas and inventions developed within the university. Its creation has helped the university spin out over 200 companies in the last two decades, 15 of which are now individually worth over $1 billion. As the portfolio advisor, Cambridge Enterprise will source and evaluate appropriate opportunities for the fund. 

Investment strategy

Cambridge Enterprise sources its deal flow through two main routes, Technology Transfer and Seed Funds. The Technology Transfer team helps academics develop and progress their research into viable commercial opportunities. The Seed Funding team focuses on creating new companies based on technology already owned by the university or its members.

Deals are selected if the idea or invention has the potential to be commercially attractive to businesses or investors. During the initial due diligence process, Cambridge Enterprise will assess the technical and commercial aspects of the opportunity. Typically, this will include looking for existing competitors or patents as well as measuring industry interest. 

If an opportunity is selected, Cambridge Enterprise will support the company continuously through its development. This can be from its initial patent application all the way to assisting in final sale negotiations. 

Prospective companies will be assessed by Parkwalk before being included within the fund. 

As with any Parkwalk fund, the companies must be able to demonstrate proven technology and should address a significant issue.

Target return

The manager has not specified a target return. 

Exit strategy

Parkwalk seeks to exit Investments through trade sales, secondary sales, listing Investee Companies on AIM (or other appropriate markets) or potential sales to other Parkwalk managed funds where appropriate. Please note, exits are not guaranteed. 

Portfolio

The target portfolio for each investor will be 10 to 15 early-stage start-up companies or later stage follow-on investments. As at 31 December 2019, the Cambridge University Enterprise Funds I–VI have made 58 investments in 34 companies.

Performance

From August 2012 to December 2019, the University of Cambridge Enterprise Funds I–VI have achieved 11 realisations generating over £8.9 million. In the same period, three of the funds’ investments have been written down to zero.

Below is a breakdown of the performance for each of the funds. It shows the returns for £100 invested in each of the funds as at December 2019. Please note, past performance is not a guide to the future. 

Source: Parkwalk Advisors, valuations as at 31 December 2019, based on Parkwalk’s valuation methodology. Past performance is not a guide to the future. Performance figures show the returns for investors investing in each fund excluding fees and tax reliefs. Realised Return refers to cash returned to investors per £ invested. Unrealised Return is the value of the balance of the portfolio including potential earn-outs on exits. Please note, the performance figures also exclude any performance fees (20% above £1 returned to investors). Performance data for Fund VI is not yet available. The annual performance of all Parkwalk EIS funds, including the Cambridge funds, is shown in the chart below.

The table below shows historic performance to 6 January 2019 across all investments made through all Parkwalk EIS funds per tax year. Please note, “Realised Return” figures include loss relief at 45% so cannot be directly compared to other EIS offers on this website: remember tax rules can change and benefits depend on circumstances. 

Source: Parkwalk, valuations as at 6 January 2020, based on Parkwalk’s valuation methodology. Past performance is not a guide to future performance. Performance figures show the average returns for investors investing in each tax year. Realised Return refers to cash returned to investors per £ invested (including loss relief where applicable for a 45% income taxpayer) before fees. Unrealised Return is the value of the balance of the portfolio including potential earn-outs on exits. Total Return is the sum of realised and unrealised returns excluding fees and initial income tax relief. Please note, the performance figures also exclude any performance fees (20% above £1 returned to investors). Performance data for 2019/20 is not yet available.

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 5%
Wealth Club initial saving
Net initial charge through Wealth Club 5%
Annual management charge 1.5%
Administration charge 0.25%
Dealing charge 0.2%
Performance fee 20%
Investee company charges
Initial charge
Annual charge
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

Parkwalk aims to deploy the money within nine to 18 months from investment. Historically, the average has been within 12 months, but there are no guarantees this will continue to be the case. As is typical with EIS and SEIS investments, it may not be possible to have all funds deployed before a deadline such as the end of the tax year.

Our view

In our view, this is a high-quality EIS fund offering within an exciting and hard to reach sector. The partnership between Parkwalk and Cambridge Enterprise has deep experience in this field and a strong track record. The prospect of investing in a portfolio of early-stage, cutting-edge technology businesses, spun out of Cambridge University might be an appealing proposition for investors looking to complement a wider investment portfolio, where gaining exposure to university spinouts might be more challenging. 

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
University spinouts
Target return
-
Funds raised / sought
-
Minimum investment
-
Deadline
CLOSED
Last updated: 20 April 2020

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