We look to offer Investors the opportunity to invest in a diverse portfolio of EIS qualifying companies. The portfolio approach allows diversity in investment, giving Investors a mixture of holdings in more mature companies, some ‘earlier stage’ businesses (such as technology and biotech companies) and those identified as having the potential to provide capital growth.
The companies will either be unquoted private companies or AIM quoted. Putting together an individual portfolio for an Investor typically takes from 6 to 8 months to complete, although it can take up to 12 months, with each Investor holding shares in 4 to 6 companies for each year that they make an investment. We target well managed businesses that can demonstrate established and proven concepts along with good balance sheet strength and are looking to take the next step in their growth phase. We will back earlier stage investments where we have a successful existing relationship with management or where there is clear visibility of liquidity through an Initial Public Offering process. When doing so, we are looking to invest in companies where we have identified a genuine opportunity for a return of £1.60 to £1.80 for every £1 invested and to exit from an investee company broadly four years after the date of investment. We do not factor tax reliefs into our targeted investment returns and consider each opportunity on its merit regardless of the tax reliefs available.
The exit of investments will be via an initial public offering (IPO), trade sale or possibly a management buyout (MBO). The anticipated term in line with EIS is 3-5 years. The investment case presented pre-completion of each individual investment will include likely exit routes. This may on occasion highlight specific targets for exit, for example a potential trade buyer. This is indicative only and does not provide any certainty of exit inside the indicated timescales or at a specified price. The Enterprise Investment Scheme does not allow for exit arrangements to be made at the time an investment is place. Instead, the Service will start to look in more detail at potential exit routes from the end of year 2 and beyond. Our in-house Research and Origination Team have a specific role in preparing our investee companies for exit. This process is critical to the initial investment rationale and continues throughout the investment term.
An independent company purchases the intellectual property rights of the Portfolio Company at a price determined by an independent valuer
A sale or part sale of the Portfolio Company
The purchase by the Portfolio Company of shares held by shareholders
The introduction of new investors (not EIS investors, who must buy new shares) to the Portfolio Company
The reduction of the Portfolio Company’s share capital
The voluntary liquidation of the Portfolio Company or the sale of the Portfolio Company’s assets and subsequent distribution of proceeds to shareholders.
Seneca Partners Limited
Seneca Partners Ltd was formed in 2010 to provide services for high net worth individuals, entrepreneurs, companies, charities and trusts. It brought together a first class team of finance professionals with over 200 years of combined investment experience, an extensive contact networks and exceptional deal flow. Since inception, Seneca’s capabilities have grown steadily both organically and by selective acquisition resulting in a number of Seneca branded specialist companies.
The scheme is structured as Discretionary Managed Service and the Information Memorandum can be found at eis.senecapartners.co.uk
1.6 to 1.8 x after around 4 years, excluding tax reliefs
4 to 6 investee companies per subscription. The investee companies will typically be unquoted private companies or companies quoted on the Alternative Investment Market “AIM”. A typical portfolio will likely include a mixture of holdings in more established companies seeking capital growth and some earlier stage businesses (for example technology and biotech companies) identified as having the potential to provide capital growth.