The Seneca EIS Portfolio Fund is an Alternative Investment Fund, which will provide a portfolio of investments in a mixture of unquoted and AIM-listed growth companies. The target return is 1.8x the amount invested, excluding fees, or 1.5x net of fees. 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 portfolio of growth companies with roughly equal exposure to unquoted and AIM-listed investments.

Issues

• Diversification: Lower than many established EIS funds.

 

The investment manager

Positives

• Team: Has a wide range of experience, with particular strengths in accounting and corporate finance.

Issues

• Size: Seneca runs a lean team – while it seems adequate for its current level of activity, it is smaller than others of similar scale.

 

Nuts & bolts

• Duration: The fund is evergreen, with no formal closings, and investors simply participate in the deal flow after investment.
• Diversification: The manager aims to provide at least four investments, although five or six is typical.
• Valuation: Updated quarterly following IPEV guidelines, and reviewed.

 

Fees

• Fees: A combination of direct fees and company charges. The latter are not charged to AIM investments, while the annual fee is contingent, aligning fees with investors.
• Performance fee: Charged at 20% on aggregate returns over 100% of subscription plus fees.

 

Risks

• Target returns: The target of 1.8x invested capital before fees suggests a medium-to-high-risk investment strategy.
• Companies: Supplying risk capital to companies that have revenue and are scaling up. There will be a spread of company returns, as the successful ones will do very well, but those that fail may do so completely.

 

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