Foresight Williams Technology
The Foresight Williams Technology EIS Fund is a collaboration of Foresight Group with Williams Grand Prix Engineering Limited. The offer focuses on early-stage, high-growth, technology companies.
- Investing in early-stage, high-growth technology businesses
- Combined talents of Foresight Group and Williams Grand Prix Holdings
- £10,000 minimum investment
- 6–10 companies expected in the portfolio
This offer gives the opportunity to invest in early-stage high-tech companies chosen and nurtured by Foresight Group, one of the UK’s leading venture capital companies and Williams Advanced Engineering, a division of Williams Grand Prix Holdings and owner of the Williams Formula One team. The relationship between Williams and Foresight began in mid-2015.
Foresight Group manages over £2.7 billion in client assets across VCT, EIS, IHT and third party funds.
Williams Advanced Engineering (‘WAE’) was established in 2010 and is a wholly owned division of Williams Grand Prix Holdings plc. WAE provides technical innovation, engineering, testing and manufacturing services to a diverse client base in the automotive, aerospace, defence and energy sectors. It specialises in the commercial application of aerodynamics, advanced lightweight materials, hybrid power systems and electronics derived from Formula One racing to other uses.
Example of a recent investment
In September 2017 the Foresight Williams Technology EIS Fund invested in Utonomy, a pioneering intelligent gas grid solutions provider. Utonomy has developed an innovative technology for reducing leakage in gas distribution networks. Its “internet of things” solution automatically optimises gas distribution pressures through electro-mechanical actuators retrofitted to the network and controlled by intelligent, cloud-based software.
To be considered for the fund, companies must have technology with potential for annual sales of at least £75 million and some defendable intellectual property. WAE brings the commercial, technical and scientific expertise and Foresight adds its experience in deal structuring, mentoring and knowledge of exits.
“Technology Readiness Level”
The EIS will invest up to £2 million per company. Companies are likely to be pre-profit, and with no revenue, typically operating in the hard tech sector (i.e. not software) as this is where Williams’ expertise lies: in designing, testing and manufacturing. WAE will only invest in companies where it can add value – this isn’t a passive portfolio where the underlying companies are left to get on with it.
For this EIS, the “Technology Readiness Level” scale is actively used. Number 1 on the TRL scale indicates only basic research has been conducted whereas 9 indicates it has been deployed fully into the market place. Between 4 and 8 on the scale is the hunting ground for this EIS. This means the concept is working as a minimum and quite likely prototypes have been produced and are in testing.
Materials science is a key area as it can be applied in many different sectors i.e. new lightweight structures. Battery and energy storage are other areas of expertise as are connected with vehicles and mobility. The fund won’t include biotech, fintech or cyber security.
For every deal, the underlying company will have a master service agreement with WAE. The agreement gives access to WAE capabilities, for example, wind tunnels and aerodynamicists, design and manufacturing of products.
Companies invested in 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.
Foresight has many exits under its belt with companies that could have been suitable candidates for this fund. Please note past performance is not a guide to the future. 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.
This is an earlier-stage, higher-risk EIS therefore it is quite likely there will be failures in the portfolio. Earlier-stage companies typically take longer to come to fruition therefore investors should not expect an exit within three to four years; it is quite likely the time frame will be six to seven years. Earlier-stage companies often need more than one round of funding and this could cause an investment to be diluted if new shareholders are required.
The usual risks with unquoted companies exist with this EIS offer. EIS investments are illiquid and capital is at risk. Investors should only invest money they cannot afford to lose.
Tax benefits will depend on individual circumstances and tax rules can change.
There is a 5.5% initial charge for investment in the fund. There is a 2% annual management fee plus an additional 0.3% annual secretarial fee. The first two years’ annual fee will be deducted at outset to cover the investment period. From year three the fee will accrue and be repaid upon the sale of investments or the receipt of dividends. There is a performance fee of 20% of proceeds once investors have received their original fund investment back in full. Arrangement and monitoring fees may also be payable by the underlying companies.
Despite the association with Williams, you won’t be investing in Formula One. This early-stage, high-growth, high-tech offer looks to invest in cutting edge companies that can benefit from help, expertise and nurturing from the Williams Advanced Engineering division of the Williams Racing team. Whilst it doesn’t guarantee success, WAE can add a level of expertise and technical knowhow in this high risk offer.
Wealth Club aims to highlight investments we believe have merit, but you should form your own view. You should decide based 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. 26.10.2017
- Target return
- Funds raised / sought
£20.7 million /
- Minimum investment