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 15-18 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: Some write-offs have adversely affected the company’s previously very good performance. An average realised 12% IRR is still credible.
Nuts & bolts
Offer period: Closing dates are quarterly on the last Friday of October, January, April and July.
Diversification: The aim is to invest in a minimum of five 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.
