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Register now for 4 October 2022 at 3:00pm -

October Investor Forum: Shareholder value in ESG investing

Blackfinch Ventures EIS Portfolios is a discretionary portfolio service, which will provide a portfolio of investments in unquoted technology companies. The target return is an average of 3x-5x capital. 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 technology companies that have achieved product-market fit and are starting to scale up.

Issues

  • Track record: Having been investing in this strategy since 2019, the track record is limited.

 

The investment manager

Positives

  • Team: There is a diverse range of experience in the team, with a clear strategy and well-designed processes.

Issues

  • Team size: The Ventures team in Blackfinch is expanding quickly, ahead of expected future growth.

 

Nuts & bolts

  • Duration: The fund is evergreen, with investors participating in transactions on an ongoing basis after investment.
  • Diversification: The manager expects to provide at least 10 investments to each investor.
  • Valuation: This usually changes at next financing or on writedown. From the end of 2021, the fund will follow IPEV guidelines and align with Blackfinch’s VCT.

 

Specific issues

  • Fees: A combination of direct fees and company charges.
  • Performance fee: This is charged at 20% on aggregate returns over 130% of the amount invested in companies on a per company basis.

 

Risks

  • Target returns: The target IRR of 3x-5x capital suggests a high-risk investment strategy.
  • Companies: Supplying risk capital to early-stage technology 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.
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If you'd like to be introduced to the team at Blackfinch Investments (Fund), get in touch.

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