University of Cambridge Enterprise Fund IX

Wealth Club exclusive allocation of £500k

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

The fund offers Cambridge alumni and investors an opportunity to invest in early-stage science and technology companies as they spin out of Cambridge University, one of the world’s top universities. 

To date, previous iterations of the fund have invested £17.6 million across 94 investments into 55 companies. The funds have since achieved 18 full exits, generating realised proceeds of £9.5 million, and a current unrealised portfolio value of £27.7 million (June 2022).

  • Aims to be fully invested within 12 to 18 months, not guaranteed
  • Minimum investment £25,000 – you can apply online
  • The fund is targeting a fundraise of £3-4 million. £500k is exclusively available through Wealth Club

Important: The information on this website is for experienced investors. It is not a 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: you could lose all the money you invest.

Read important documents and then apply

The manager

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

Parkwalk Advisors

Parkwalk Advisors (“Parkwalk”) is a specialist university spinout investor with £400 million assets under management. It was founded in 2009 and in 2017 acquired by IP Group, a leading intellectual property commercialisation company with net assets of £1.7 billion (December 2021) and a market capitalisation of £880 million (May 2022). IP Group also acquired Touchstone Innovations, which was set up to invest in promising technology companies spun out of Imperial College and University College London. 

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. It is consistently ranked as one of the best universities in the world.

Part of the University itself, Cambridge Enterprise was launched in 2006 to help commercialise ideas and inventions developed within the university. As the portfolio advisor, Cambridge Enterprise will source and evaluate opportunities for the fund. 

Investment strategy

The fund aims to invest in a portfolio of early-stage, high-growth – and hence very high risk – research-intensive companies spun out from the University of Cambridge and/or Cambridge-based research-intensive institutions or technology clusters.

Investee companies will be related to the University – founded by University staff, students or alumni or with a research or development link with the University. 

Companies are expected to offer the potential to transform society through new therapies, services and disruptive technology products within sectors such as healthcare, renewable energy, decarbonisation, clean water and nutrition.

Portfolio

The fund will aim to invest in a portfolio of 10-15 early-stage EIS-qualifying companies. 

The previous eight University of Cambridge Enterprise EIS funds have invested £17.6 million across 94 investments into 55 companies. The funds have a bias towards Hardware, Digital Health and Medtech, and Life Science sectors. The chart below shows the sector breakdown by investment cost.

Sector breakdown by investment cost (%)

Source: Parkwalk Advisors, June 2022.

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. 

River Lane – Cambridge University Enterprise FundRiverlane Research

Quantum computing is a rapidly evolving technology that aims to use principles of quantum mechanics to push past the current limitations of classical computing.

This advancement is expected to unlock substantially more computing power, capable of solving complex calculations and driving innovation in machine learning and artificial intelligence.

However, as hardware advances it needs software to match. For this purpose, Riverlane has developed its own operating system, Deltaflow, the equivalent of Windows 10 or macOS for quantum computing. An operating system makes computers useful, allowing them to run programs and applications on many different machines. Riverlane is aiming to make Deltaflow the global standard system for quantum computing.

The company spun out from the University of Cambridge in 2016 and by 2021 it had signed up a fifth of the world’s quantum hardware manufacturers to its Deltaflow software. In the same year, the company secured a $20 million Series A round led by Molten Ventures with participation from existing investors, Cambridge Innovation Capital, Amadeus Capital Partners, and the University of Cambridge EIS Enterprise Fund.

Sano Genetics – Cambridge Enterprise EISSano Genetics 

According to Dr Patrick Stuart, co-founder of Sano Genetics, it still takes 10-15 years for new drugs to reach patients and many never make it out of R&D due to prohibitive R&D costs. 

Founded in 2017, Sano Genetics aims to accelerate the future of personalised medicine, by making the R&D process much faster, more cost-effective, and a better experience for patients. 

Sano has developed a platform to help connect patients who have rare and chronic diseases with leading research and clinical trials, making patient recruitment faster and providing researchers with tools to analyse anonymous and aggregated data. 

The business claims to have doubled revenues every six months since its founding. It raised $11 million in February 2022 in a round led by Seedcamp and MMC, with participation from the University of Cambridge Enterprise EIS Fund. Proceeds are expected to accelerate research into long Covid, MS, Parkinson’s, and other chronic conditions.

Vocaliq – Amadeus Early-Stage EIS FundVocalIQ (example of previous exit)

VocalIQ is an example of an early-stage investment and successful exit for the University of Cambridge Enterprise Fund II. 

VocalIQ had developed proprietary software to improve dialogue interactions in voice-activated systems. The technology enables users to talk more naturally with their smart devices – phones, wearables, smart-home devices. 

The business was originally spun out of Cambridge University. The University of Cambridge Enterprise Fund II participated in an initial £0.75 million funding round alongside co-investment from Amadeus Capital Partners. 

VocalIQ’s technology proved highly desirable and Apple acquired the business 15 months later, generating a significant multiple return for the fund. Past performance is not a guide to the future. 

JukeDeck (example of a previous failure) 

As to be expected, not all investments work out. One example is JukeDeck. JukeDeck developed a state-of-the-art technology that brings artificial intelligence to music composition and production. 

The technology was very advanced but potentially ahead of its time as the market for royalty-free AI generated music had not grown sufficiently. Jukedeck managed to garner some good traction with early adopters but failed to become self-sustaining financially which led to management securing an offer from an Asian tech company ByteDance, the owner of TikTok, that allowed an orderly liquidation of the business and the transfer of its employees.

The company was backed by the University of Cambridge Enterprise Fund II. The orderly liquidation resulted in no return for equity investors.

Performance

The Cambridge funds have developed a track record of returning cash to investors, although past performance is not a guide to the future.

The previous eight University of Cambridge Enterprise EIS funds have invested £17.6 million across 94 investments into 55 companies. The funds have since fully exited 18 of these investments, generating realised proceeds of £9.5 million, and a remaining portfolio balance of £27.7 million (June 2022). 

The chart below shows the average performance of the total subscribed into each tax year, expressed on a £100 invested basis.

Performance per £100 invested in each tax year

Source: Parkwalk, as at 9 June 22. Past performance is not a guide to future performance. The chart shows realised returns (where share proceeds have been returned to investors as cash) and unrealised returns (where cash has not yet been returned and the value of the investments is based on the manager’s own valuation methodology). There is no ready market for unlisted shares. The figures shown are net of all fees and do not include any income tax relief or loss relief.

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 and should only form part of a balanced portfolio. As must be expected with early-stage investments, some or even all of the companies in the portfolio could fail: the fewer the companies included in the portfolio, the higher the risk of loss if things don’t go to plan. You should not invest money you cannot afford to lose.

There is no ready market for unlisted EIS shares: they are illiquid and hard to sell and value. There will need to be an exit for you to receive a realised return on your investment. Exits are likely to take considerably longer than the three-year minimum EIS holding period; equally, an exit within three years could impact tax relief.

To claim tax relief, you will need EIS3 certificates, normally issued once shares have been allotted. This can take several months: please check the deployment timescales carefully. Tax reliefs depend on the portfolio companies maintaining their EIS-qualifying status. Remember, tax rules can change and benefits depend on circumstances.

Before you invest, please carefully read the Risks and Commitments and the offer documents to ensure you fully understand the risks. 

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

Our view

The University of Cambridge EIS fund provides investors with the opportunity to invest in a diversified portfolio of 10-15 early-stage technology companies emanating from one of the world’s leading universities. 

The longstanding collaboration between Parkwalk and Cambridge Enterprise may allow the fund access to opportunities other EIS managers would be hard-pressed to replicate. Previous University of Cambridge Enterprise EIS funds have invested in some of the university’s most promising spinouts and earlier investors have been well rewarded. Please note, past performance is no guide to the future. 

In our view, this is a high-quality EIS fund within an exciting and hard to reach sector. However, the focus on intellectual property means these investments are very early stage, so it is also high-risk. 

The prospect of investing in 10-15 early-stage, cutting-edge technology businesses might appeal to investors looking to complement a wider investment portfolio, where gaining exposure to university spinouts might be challenging. Additionally, the link with the University of Cambridge may appeal to investors who wish to invest alongside Cambridge Enterprise and value the discipline of specifically targeting opportunities within Cambridge. 

Read important documents and then apply

Wealth Club aims to make it easier for experienced investors to find information on – and apply for – investments. You should base your investment decision on the offer documents and ensure you have read and fully understand them before investing. The information on this webpage is a marketing communication. It is not advice or a personal or research recommendation to buy any of the investments mentioned, nor does it include any opinion as to the present or future value or price of these investments. 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
£1.8 million / £3.5 million
Minimum investment
£25,000
Deadline
Limited capacity
Last updated: 22 June 2022

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