The Oxford Innovation EIS Growth Fund 3 is an Alternative Investment Fund, which will provide a portfolio of investments in technology companies. The target return for the fund is 2x-3x the capital invested. Returns will be focused on capital gains, and investors are unlikely to receive any dividends. The fund has a limited lifespan – for the 2022/23 tax year only.

Why invest

Positives

• Strategy:  To invest in a portfolio of high-growth technology companies with an emphasis on science and innovation.

Issues

• Track record: The manager has been investing for two years, and has a limited track record.

The investment manager

Positives

• Team:  The team has a broad variety of entrepreneurial, angel and professional investing experience.

Issues

• Size:  The professional team is relatively small, but can draw on the support and insight of the large angel network and other Oxford Innovation staff.

Nuts & bolts

• Duration: This is the third in a series of annual funds, with a closing date of 31 March 2023, with investments to be made over the following 12 months.
• Diversification: The manager aims to provide 8-12 investments, with 9 being made in Fund 1.
• Valuation:  Reports will be sent out semi-annually, with movements on subsequent funding rounds.

Fees

• Fees: A combination of direct fees and company charges. Annual fees have three years deducted upfront, with the balance from exits.
• Performance fee: Charged at 20% on aggregate returns over 120% of subscription.

Risks

• Target returns: The target of 2x-3x invested capital, and potential for 10x on individual investments, suggests a high-risk investment strategy.
• Companies: Supplying risk capital to technology companies that show signs of traction. There will be a spread of company returns, as the successful ones will do very well, but those that fail may do so completely.