Calculus EIS Fund is a complying EIS fund, which will invest in a minimum of five 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 focused on capital gains, and investors are unlikely to receive any dividends. The aim is for the assets to be invested 15-18 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 15-18 months is longer than that for 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 writeoffs have adversely affected the company’s previously very good performance. An average realised 13% 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 a spread across each of healthcare, technology-enabled companies and media.
• 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 would expect for that risk category.