The o2h Human Health EIS Knowledge Intensive Fund is a discretionary managed portfolio service structured as an Alternative Investment Fund and focused on investing in a portfolio of companies that develop therapeutics or supply services to such companies. The target return is an IRR of 20%. There is no income target.

Why invest

Positives

• Strategy: To invest in companies developing new therapeutics, AI companies accelerating development and enabling service companies.

Issues

• Track record: As a relatively new manager in the sector, o2h only has a record of deployment to date.

The investment manager

Positives

• Team: The o2h team is highly experienced in its specialist area, with plans to add to its support infrastructure.

Issues

• Team size: The investment team is relatively small, although it has surrounded itself with strong support from its network.

Nuts & bolts

• Investing: The fund operates with six-monthly closes. This is an HMRC Approved Knowledge Intensive Fund, the first of such funds in the market.
• Diversification: Portfolio of between five and ten companies across three subsectors.
• Valuation: Valuations will be provided semi-annually, with online access. The expectation is that most of these will be based on the latest transaction price.

Fees

• 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: o2h Ventures aims to mitigate risk by investing in companies that the manager knows well; only following on when milestones have been reached, and diversifying across a range of areas.
• Target return: The target return for the fund is a 20% IRR over three to seven years. While the prospect of secondary sales makes this timescale more realistic, and successful companies will give an excellent return, there is a real risk of loss for those that don’t.