The Deepbridge Life Sciences EIS is an alternative investment fund focused on investing in a portfolio of life science-focused companies across a variety of areas. The target return is £1.70 for each £1 invested (gross) in four to five years. There is no income target.

Deepbridge has been the manager since early 2021. Prior to that, it was the fund advisor, with Enterprise Investment Partners as the manager.

The report goes into details of how the investment process works, sourcing and decision-making, exit strategies, post-investment governance and monitoring, fees and more. It also includes Hardman & Co’s unique fee calculation table, allowing advisors and investors to properly investigate their effect.

Why invest

Positives

• Strategy: Well-defined investment process to invest directly in new companies in selected life science areas.

Issues

• Concentration: Portfolio may be up to 10 investments, although smaller investors may get greater concentration.

The investment manager

Positives

• Team: The Deepbridge team is highly experienced in the relevant areas, and its committees have very strong outside members.

Issues

• Track record: Although Deepbridge has been investing in EIS since 2013, it has very few exits to date.

Nuts & bolts

• Investing: Deployments take place on a monthly basis; so new money will usually be invested within that period.
• Diversification: Portfolio of 3-10 companies.
• Valuation: Unprofitable companies will be held at cost, or at the most recent relevant transaction. Profitable companies use a discounted average multiple from relevant companies.

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: Deepbridge aims to mitigate risk by active, ongoing support of the company and choosing conservative business plans. Most of the companies will be introduced by partners, who will also be bringing support.
• Target return: The target return for the fund is £1.70 for each gross £1 invested over three to five years. Individual companies tend to have much higher targets, reflecting that success in a company will give an excellent return; however, there is a real risk of loss in any project.