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

October Investor Forum: Shareholder value in ESG investing

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.
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If you'd like to be introduced to the team at Par Fund Management (Fund), get in touch.

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