Par Equity is an award-winning EIS fund manager, investing in innovative, high growth technology businesses across the UK. They harness the expertise and contacts of their Par Investor Network and wider contacts to create a distinctive, operationally focused investment model that benefits both investors and entrepreneurs.
Par Equity’s objective is to put both financial and intellectual capital to work. They seek to align the Fund’s interests with entrepreneurs by investing in their businesses and working with them to add value for the benefit of all parties, helping the business to fulfil its potential.
The Fund will provide growth capital, targeting pre- series A and Series A funding rounds whereby the company has a monthly revenue somewhere in the region of £20k - £200k, i.e., the business has good traction, proven demand and is rapidly establishing its position in the market, but valuations are still in an acceptable range. They will also consider pre-revenue opportunities if the proposition is particularly attractive. Par Equity generally participates in investment rounds of at least £0.5 million per Investee Company and will consider rounds of up to £5 million of equity finance.
Exits are generally expected to come in the form of trade sales, although return of capital and IPOs can’t be ruled out Absent an exit event, liquidity is likely to be extremely limited. Should the Investment Agreement between Par Equity and an Investor come to an end, through termination or expiry, the Investor can have shares transferred to them from the nominee.
Par Fund Management Limited
Par Equity is an Edinburgh-based venture capital firm, formed to provide intellectual and financial capital to innovative young companies with high growth potential Par Equity benefits from a strong flow of investment opportunities, partly because the management of young companies recognise the power of Par Equity’s model to add value and partly because Par Equity operates in the equity gap where young companies struggle to find finance.
The members of the Investment Team have, collectively, a broad range of experience in investment, business management, transaction execution, commercial negotiation, deal structuring, strategy, corporate turnaround and corporate restructuring They work with the Par Syndicate and the Advisory Panel in evaluating potential investments and have a significant network of professional and personal contacts that they can call on in assessing opportunities Par’s collaborative model. with the active involvement of a network of investors and other contacts, allows it to access opportunities that may not be available to the general market.
Fees charged to Investor (including VAT)
Fees charged to Investee Companies (including VAT)
Annual Management Fee
Other Fee Information
Taken upfront: initial + 4 years of annual - 4%
The Performance Fee is set at 20% of aggregate exit proceeds received by the investor in excess of the Subscription and any other Investment Management Fees or charges paid, in other words, no performance fee is payable until an investor has had 100% of their money back, without taking EIS Reliefs into account.
In exceptional circumstances, the Manager may make a decision that leads to the loss of EIS Reliefs in respect of a specific Investee Company - for example, the Manager may decide to accept an offer for an Investee Company that results in an Exit within three years of the original investment.
Where this happens, not only would EIS Relief need to be repaid, but CGT would be payable on any capital gains.
The Manager will therefore apply an Equalisation Adjustment to reduce any Performance Fee due. This is done by applying a notional increase of 40% to that part of a Subscription invested in the Investee Company concerned.
For example, where £5,000 of a Subscription is invested in an Investee Company that is subject to an Exit Event two years after the investment is made (resulting in EIS Relief being lost) and Exit Proceeds of £15,000 are generated, the Equalisation Adjustment would be £2,000, giving a notional cost of investment of £7,000.
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