This latest tranche of investment for Guinness EIS seeks to invest in a diverse range of non-correlated businesses.
- Latest tranche of investment from established EIS manager Guinness
- Targeting a portfolio of diverse businesses
- £1.25 per £1 invested target after 4-5 years (not guaranteed)
- Evergreen offering
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Guinness Asset Management is a specialist fund manager with assets under management of approximately £1.2 billion and approximately £120 million invested in EIS and estate planning assets. The Guinness EIS was launched in 2010.
Six key people, including Edward Guinness and Shane Gallwey, work in the Guinness EIS team, which manages this generalist EIS alongside the sustainable infrastructure IHT investments.
The managers will consider investments in businesses which have:
- Experienced management teams
- Good visibility on future growth
- Expanding working capital requirement.
They must also have EIS advance assurance. Guinness will invest between £500,000 to £5 million per company.
The management team has identified a range of businesses in the above areas. The possible pipeline for 2018 investments include:
- Craft brewery with supermarket exposure: this is an operational brewery looking to expand to service additional retail contracts
- Prawn farm: land-based breeding and supply of prawns
- Underfloor heating: an existing firm looking to expand and create a larger customer base in the UK.
These are just some of the investments Guinness is considering. Guinness tends to invest only in equity, avoiding businesses with high leverage as the manager wants to have claim over the cashflow of the business to help mitigate risk. Please remember: all investments can fall as well as rise in value, so you could get back less than you invest.
£1.25 per £1 invested is the target return (which is not guaranteed). This is intended to be a four to five-year investment but timeframes are not guaranteed.
As the companies chosen will all be very different, there is no predetermined exit strategy. Exits could potentially be achieved by way of trade sale, IPO, leveraged buyout or liquidation.
This could be a very diverse portfolio of investments. Therefore, it is quite difficult to assess the individual risks of potential underlying companies. One of the bigger risks is simply that this is a relatively new area of investment for Guinness who has previous specialised in renewable and infrastructure assets.
The usual risks with unquoted companies apply to this EIS offer. For instance, EIS investments are illiquid and capital is at risk. Investors should only invest money they can afford to lose. The value of tax relief depends on circumstances and tax rules could change.
There is a 3% initial fee, before Wealth Club saving. There is a 2% transaction fee, and a 2% annual management fee, charged to investee companies. In addition, there are other transaction fees of up to 0.35% and an annual custodian fee of £60. There is a performance fee of 20% of any amount returned to investors above £1. Please see the provider's documents and the key information document for more details on fees.
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. 13 April 2018
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- Target return
- £1.25 per £1 invested
- Funds raised / sought
- £45 million sought
- Minimum investment
- 28 Sep 2018