Calculus EIS Fund is a complying EIS fund, which will invest in 6-10 companies. The target return for each investee company is an IRR of 20% with a return of £2.5 for each £1 invested. Returns will be focussed on capital gains and investors are unlikely to receive any dividends. The aim is for the assets to be invested over the 18 months from closure of the tranche.

Calculus Capital Limited is the Fund Manager and there are no other companies involved in running the fund.

Why invest

Positives

• Strategy: To invest in a portfolio of more established unquoted companies with growth potential to attain capital appreciation.

Issues

• Time to invest: The target time to invest of 18 months is longer than many other EIS funds, although Calculus is looking to reduce this.

The Investment Manager

Positives

• Team: One of the longest standing managers in the VCT/EIS area, Calculus has a highly experienced and stable team.

Issues

• Past performance: Write-offs over the past couple of years have adversely affected the company’s previously very good performance. An average realised 9% IRR is still credible.

Nuts & bolts

• Offer period: Closing dates are quarterly on last Friday of October, January, April and June.
• Diversification: The aim is to invest in 6-10 companies, with approximately one-third in each of healthcare, technology-enabled companies and others.
• Valuation: Investors will receive valuations twice a year. Industry guidelines will be used, with two auditors examining the figures.

Specific issues

• Fees: Mixture of direct fees and charged via the investee companies.
• Performance fee: 20% on gains over a return of total capital invested.

Risks

• Risk mitigation: The aim is to diversify by sector and the focus on more established companies should also help mitigate some of the risk.
• Target return: Overall, the strategy is medium risk relative to other EIS/VCT products, with the target company IRR of 20% and capital return of 2.5x towards the top end of what we’d expect for that risk category.