The Haatch EIS Fund is an Alternative Investment Fund, which will provide a portfolio of investments in unquoted, early-stage companies. The target return is 3x the capital invested. Returns will be focused on capital gains, and investors are unlikely to receive any dividends. The fund is evergreen.

Why invest

Positives

• Strategy: Exposure to a small portfolio of B2B SaaS companies, focused on the team’s areas of expertise.

Issues

• Track record: Only a small number of exits to date, mostly pre-dating the EIS fund, but the unrealised results look promising.

The investment manager

Positives

• Team: The team brings strong entrepreneurial experience, having started, grown and sold several businesses.

Issues

• Expansion: Haatch is expanding rapidly. While the team has experience of managing growth, it brings some risks.

Nuts & bolts

• Duration: The fund is evergreen, with a target of four closes a year, or whenever sufficient funds are raised.
• Diversification: The manager expects to provide 4-6 investments for each closing, with a deployment targeted within the same tax year.
• Valuation: Usually changes at next financing, or on writedown.

Fees

• Fees: All fees are charged directly to investors.
• Performance fee: Charged at 25% on aggregate returns between 1x and 5x, and 30% on returns thereafter.

Risks

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