Strategy: Exposure to a small portfolio of digitally-enabled companies focused on the team’s areas of experience.
Issues
Track record: Only a small number of exits to date, mostly predating the EIS fund, but the results so far look promising.
The Investment Manager
Positives
Team: The team brings very strong entrepreneurial experience, having started, grown and sold several businesses.
Issues
Team size: The Haatch team is small, and this may act as a slight constraint if the company grows.
Nuts & bolts
Duration: The fund is evergreen, with a target of bi-annual closes, or whenever sufficient funds are raised.
Diversification: The manager expects to provide four to six investments for each closing, with deployment within 18 months.
Valuation: Usually changes at next financing, or on writedown.
Specific issues
Fees: Combination of direct fees and company charges.
Performance fee: Charged at 25% on aggregate returns between 1x and 5x, and 30% on returns thereafter.
Risks
Target returns: The target return of 10x 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 who fail may do so completely.
