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

October Investor Forum: Shareholder value in ESG investing

The Oxford Capital Growth EIS is an Alternative Investment Fund, which will provide a portfolio of early-stage technology investments. The target is a 2x return after fees. Returns will be focused on capital gains, and investors are unlikely to receive any dividends. The fund is evergreen.

Why invest

Positives

  • Strategy: Investing in a range of technology companies across various themes and with a spread of stages of development.

Issues

  • Track record: The current strategy has only been in place since 2016 – so the track record is limited, with a small number of exits.

The investment manager

Positives

  • Team: Oxford Capital is a long-established EIS manager that has invested in growth EIS for over 20 years.

Issues

  • Corporate history: Oxford Capital has, in the past, faced challenges in some of its energy asset businesses, which it has now exited.

Nuts & bolts

  • Duration: The fund is evergreen, with investors participating in deal flow after investment. Oxford Capital aims to invest in 12-18 months.
  • Diversification: The manager aims to provide 8-12 investments for each investor, with a spread of investments from seed up to series C.
  • Valuation: Uses IPEV guidelines, with a mixture of last transaction and internal valuation.

Fees

  • Fees: Apart from an initial company fee, all are charged to investors. A 10% deduction is made upfront, with the balance of annual fees collected from exits.
  • Performance fee: This is charged at 20% on aggregate returns over subscribed capital.

Risks

  • Target returns: The target return of 2x capital after fees suggests a
    high-risk investment strategy.
  • Companies: Oxford Capital supplies risk capital to early-stage technology companies, with some pre-revenue companies, but mostly post-revenue. 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 Oxford Capital, get in touch.

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