The Par EIS Fund is a discretionary portfolio service, which will provide a portfolio of investments in unquoted technology companies. The manager highlights that it is providing genuine risk capital. The benchmark is an average annualised IRR of 15%, equivalent to doubling capital over a five-year period. 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 across the north of the UK co-investing with experienced Angels.

Issues

• Diversification: While diversification has improved, and is in line with sector averages, it remains behind the best.

The investment manager

Positives

• Team:  Diverse range of experience in team, with clear strategy and good support from its Angel network.

Issues

• None: We cannot think of a meaningful issue with the team.

Nuts & bolts

• Duration: The fund is evergreen, with no formal closings, and investors simply participate in the deal flow after investment.
• Diversification: The manager aims to provide seven to eight equal investments for each investor, with a recent range of seven to ten.
• Valuation: Updated quarterly following IPEV guidelines, and reviewed.

Fees

• Fees: A combination of direct fees and company charges. Four years of annual fees are deducted upfront.
• Performance fee:  Charged at 20% on aggregate returns over 120% of subscription.

Risks

• Target returns: The benchmark average IRR of 15% (roughly doubling the gross investment in five years) suggests a medium- to 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 that fail may do so completely.