Hardman analyst Brian Moretta has taken a close look at The Hambro Perks Growth EIS Fund and he highlights the management team which “…has a broad range of experience in both finance and entrepreneurship, and has interests aligned with investors.”
The Hambro Perks Growth EIS Fund is from the Hambro Perks Asset Management/Hambro Perks Advisory stable. It was launched in February 2018 and has assets of £4.5m. The fund target is £15m per annum and total funds under management is £55m.
The fund’s strategy is to co-invest alongside Hambro Perks in a portfolio of fast-growth, disruptive technology-enabled companies. And as Moretta points out, Hambro Perks aims to be a supplier of patient capital, and some investments may take significantly longer than the target.
Moretta goes on to say about the team and the fund, “although it shows signs of promise, Hambro Perks has a short track record and, so, there is a lack of exits to date.”
As for duration, the fund is evergreen and the plan is to have exits in a three-to five-year timeframe. When it comes to diversification, the manager expects to provide 10 to 15 EIS investments, with a mix of early-stage and better-developed companies. The valuation is reviewed quarterly, with updates on company progress being sent twice a year.
All fees are charged direct to investors and a performance fee is charged on a portfolio and tiered basis, with a rate of 20% for aggregate returns over £1 but below £2, and at 30% above that.
As regards target returns, Moretta says: “The target return of doubling capital, excluding tax reliefs, over three to five years, suggests a high-risk investment strategy.”
Given the objective is to supply risk capital to early-stage technology companies at the start of commercialisation, Moretta concludes “…there will be a spread of company returns, as the successful investments will do very well, but those that fail may do so completely.”
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