Calculus EIS Fund

The first Calculus EIS fund launched in 1999, making it the longest-standing in the industry. 

The fund seeks to invest in more established, revenue-generating companies in the technology, healthcare and entertainment sectors. 

Since adopting its current strategy in 2013/14, the Calculus EIS fund has invested £159.3 million in 58 companies. These investments have generated exit proceeds and dividends worth £110.9 million, with a remaining portfolio balance of £86.6 million (June 2024). Past performance is not a guide to the future and dividends are variable and not guaranteed.

• Target return of 2x over 4-7 years – not guaranteed
• Targets a portfolio of at least six companies, invested over 12-18 months – not guaranteed
• Minimum investment of £25,000 
• Deadline: 25 July 2025 for next close

Calculus Capital’s CEO, John Glencross, and Executive Chairman, Susan McDonald, made their first EIS investment in 1996. They founded Calculus Capital in 1999 and shortly after launched the UK’s first approved EIS fund. The Calculus team now manages £176 million in tax-efficient investments.

The investment team is co-led by Alexander Crawford and Richard Moore who are responsible for sourcing and executing new deals, as well as advising portfolio companies. They are supported by a wider team of seven, including Dominic Harris, Head of Portfolio Management and life sciences specialist and Investment Director Elizabeth Klein. The team’s most recent hire, Tim Robinson, is the former COO of Fifth Season, a $1 billion global film and TV studio based in LA. Tim will act as a senior advisor to the portfolio’s media investments and help generate deal flow in the sector.

To encourage alignment with investors, members of the investment team and other key employees can invest alongside the EIS Fund through a syndicate structure. Syndicate members receive a junior class of shares to those the Fund invests in and receive 12% of Calculus’ overall investment on returns above cost.

Before your subscription is invested, the cash will be held by Calculus as the custodian. Calculus also acts as the nominee after investment.

Meet the manager: Liz Klein, Calculus Capital

The Calculus EIS fund targets revenue-generating companies in the technology, healthcare and entertainment sectors. Investees are expected to show proven products and established business models, managed by an adaptable and experienced management team and with a clear route to exit. 

A large proportion of investments come from Calculus’s investor base and management teams it has successfully backed in the past. Calculus Capital also benefits from its longstanding industry experience and its investment team’s personal networks of lawyers, advisers, and brokers. 

The investment team assesses hundreds of deals a year, of which around 10 will make it through the selection process each year. When reviewing a deal, Calculus conducts its own comprehensive research then brings in external parties for in-depth financial, legal, and commercial due diligence.

Once investments are made, Calculus aims to mitigate risk with a “hands-on” approach. Calculus usually takes a board seat and will monitor performance closely through monthly management accounts. The manager also encourages portfolio companies to adopt strategies aligned with a transition to a more sustainable economy, including reducing energy consumption and promoting high standards of business ethics.

The fund targets and overall return of 2x over four to seven years, not guaranteed. 

The examples outlined below are previous investments made by the Calculus EIS Fund, which has backed 58 companies under its current strategy since 2013/14, but are unlikely to form part of a new investor’s portfolio. They are outlined to give examples of the types of companies an investor might expect.

As is to be expected, not all investments work out. Based in Brighton, Every1Mobile developed a communications platform for inclusion programmes across Africa, creating new communication opportunities for populations that had historically been inaccessible. 

The company worked with clients to create campaigns based on three main themes: health, education, and the ability to earn a living. In one example, the business partnered with Unilever to reach shopkeepers in Africa’s largest slum, Kibera. 

Calculus first invested £2.2 million in November 2017, with subsequent funding taking its total investment to £3.5 million. However, the company struggled following the merger between the Department for International Development and the Foreign and Commonwealth Office, which reduced funding for international projects. As a result, the investment was written down to nil and the company subsequently liquidated in November 2022.

The Calculus EIS fund has invested £159.3 million in 58 companies since adopting its current strategy in 2013/14. There have been 25 full or partial exits, of which 12 were profitable with an average exit multiple of 2.8x. Exits proceeds and dividends total £110.9 million, and the remaining portfolio is valued at £86.6 million. Past performance is not a guide to the future and dividends are variable and not guaranteed.

The chart below shows the average performance of the total subscribed into the funds each in each full tax year from 2013/14 (or from when the current strategy was adopted if later) to 2023/24. The chart is based on the latest valuations provided by the manager, expressed on a £100 invested basis. Please note, individual investor portfolios’ performance will deviate from the average. 

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. 

Calculus Capital has an exclusive focus on EIS and VCT investments, both of which are subject to HMRC rules which can change frequently. This could leave the firm and its investee companies vulnerable if rules change unfavourably.

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.

The initial charge consists of a 2% transaction fee and a non-advised investor set-up fee of 1%.

Calculus is one of the longest-standing EIS fund managers and the team follows an investment strategy that has now been well rehearsed for over a decade. The same strategy is used across Calculus’s EIS and VCT mandates, with the funds usually collaborating and co-investing alongside each other.

At present, the portfolio is weighted towards technology, healthcare, and entertainment. The investment team is confident in the growth prospects of these sectors and recent hires are intended to help grow deal flow and expertise in these fields. 

Calculus’s established market position has helped the team raise and deploy a sizeable amount of capital over the last 20 years. Since adopting the current strategy in 2013/14, the team has achieved a number of realisations, including 12 profitable exits - past performance is not a guide to the future.

In addition to the fund’s portfolio level performance fee, investors should note that the coinvestment syndicate effectively reduces returns to investors on profitable exits from eligible companies.

This financial promotion has been communicated and approved by Wealth Club Ltd on 11 November 2024

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.