Blackfinch Ventures EIS Portfolios is a discretionary portfolio service, which will provide a portfolio of investments in unquoted technology companies. The target return is an average of 3x capital. Returns will be focused on capital gains, and investors are unlikely to receive any dividends. The service is evergreen.

Why invest

Positives

• Strategy:  Exposure to a portfolio of technology companies that have achieved product-market fit and are starting to scale up.

Issues

• Track record: Having been investing in this strategy since 2019, the track record is limited, although there is now a successful exit.

 

The investment manager

Positives

• Team:  There is a diverse range of experience in the team, with a clear strategy and well-designed processes.

Issues

• Team size:  The Ventures team in Blackfinch has expanded quickly, ahead of expected future growth.

 

Nuts & bolts

• Duration: The fund is evergreen, with investors participating in transactions on an ongoing basis, after investment with option for deployment in the current tax year.
• Diversification: The manager provides at least 10 investments to each investor.
• Valuation:  The fund will follow IPEV guidelines and align with Blackfinch’s VCT (which is audited).

Specific issues

• Fees: A combination of direct fees and company charges.
• Performance fee:  This is charged at 20% on aggregate returns over 130% of the amount invested in companies, on a per-company basis.

 

Risks

• Target returns: The target return of 3x capital suggests a high-risk investment strategy.
• Companies: Supplying risk capital to early-stage technology companies at the start of commercialisation. There will be a spread of company returns, as the successful ones will do very well, but those who fail may do so completely.

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