Jenson Fund – SEIS & EIS

Deadline: 29 Jun 2018
This is the sixth tranche of the Jenson SEIS and EIS fund, raising up to £5 million. The fund offers a mixture of new technology investments and follow on funding into companies previously invested in by Jenson SEIS and EIS funds. 
  • Highlights

    • Target return of 185p per 100p invested (not guaranteed)
    • Choice of SEIS or EIS investment
    • Portfolio of a minimum of 10 SEIS companies, or around five EIS companies
    • Minimum investment £10,000

The offer

This is the sixth fund in the series. It is a hybrid offer, which allows investors the choice of SEIS or EIS investment, or a mix of both. 

SEIS investors will hold a portfolio of minimum 10 companies, EIS investors around five companies. 

Jenson Funding Partners was founded in 2012. Its first SEIS fund launched in 2012, one of first in the market. Jenson later launched the EIS fund to provide follow on funding for the more successful portfolio firms. 

The SEIS part of the fund aims to focus on innovative and disruptive technology firms. The EIS has a focus on providing follow-on funding for firms in the SEIS portfolio, combined with new investee companies.

Jenson invests across multiple sectors with the majority of early stage companies having some technology related angle. 

The investment committee includes Peter English, co-founder of Foresight Group and Colin Moore, a senior partner in Jenson Solutions. Of the companies that start the selection process, on average 4% receive funding. 

Jenson provides a support package to investee firms, covering various aspects of financial, sales and marketing, tech and operational support, which is mandatory for the first three years. After that, firms can choose whether to use it or not. 

Target return and exit strategy

The target return is 185p per 100p invested, which is not guaranteed. As is the nature of early stage investing, the investee companies that succeed may deliver returns many times that of the initial investment. The flip side is that some of the companies are almost certain to fail. 

Realistically, as many of the companies will be early stage, exits are largely expected from trade sales rather than from flotations. Exit is expected in five to seven years, although this is not guaranteed. 

Risks

These are early-stage businesses, which makes this a very high-risk investment. By their nature these firms will be more prone to failure than later-stage, more mature businesses. 

Out of five to ten portfolio companies held, all of these could fail.

A key risk is lack of funds for follow-on investing with the possibility of early investors being diluted. However, this can be mitigated to some extent by the EIS offer and prudent use of other external funding. 

Capital is at risk: investors should not invest money they cannot afford to lose. Investors should be aware these are long-term investments and are illiquid. Tax rules can change and the value of tax benefits will depend on circumstances.

Fees

There are no direct fees paid by investors: all fees are levied against the investee companies. 

There is an initial charge of 7.5%, charged to the underlying investee companies. In addition, Jenson receives an administration fee of £250 per month from each company.

Jenson requires portfolio companies to take up its support package (providing financial and operational support in areas such as sales, marketing, corporate governance, accounting and technical) for the first three years. This is designed to help them to grow and costs £750 per month. After the first three years, the support service package is no longer mandatory, but companies can choose to continue with it if they wish. Jenson will charge £3,500 for an initial due diligence report on potential investee companies.

There is a performance fee of 25% of any profits, on an individual company basis, once investors have received their original gross amount invested back (from that company), either from dividends or capital return. Jenson may also charge exit fees to underlying companies. Please see the information memorandum 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 June 2018

The details

Type
Fund
Sector
Technology
Target return
1.85x investment
Funds raised / sought
£1.5 million sought
Minimum investment
£10,000
Deadline
29 Jun 2018

News about Seed Enterprise Investment Scheme. Read all