The Praetura EIS Growth Fund is a discretionary portfolio service, which will provide a portfolio of investments in unquoted companies. The target return is an aggregate of 2x capital over 5-7 years. Returns will be focused on capital gains, and investors are unlikely to receive any dividends. The fund is evergreen with two tranches a year.

Why invest

Positives

• Strategy: Exposure to a portfolio of companies across a range of sectors, with around two thirds likely to be based in the north of England.

Issues

• Track record: Although the track record to date looks promising, it still lacks depth for the number of exits.

 

The investment manager

Positives

• Team: Diverse range of experience in team, with clear strategy and well-structured approach for post-investment support.

Issues

• Rate of growth: While Praetura is confident in the strength of its deal flow, it has added some new funds recently.

 

Nuts & bolts

• Duration: The fund is evergreen, with two closes a year, on 30 April and 31 October.
• Diversification: The manager expects to provide between 8 and 10 investments.
• Valuation: Co-investments in the VCT will be revalued in line with its policy, otherwise no formal valuation, with most recent transaction the main indication.

 

Specific fees

• Fees: Combination of direct fees and company charges. The annual management fee is mostly accrued and recovered from exits.
• Performance fee: Charged at 20% on aggregate returns over 120% of gross subscription on a portfolio basis.

 

Risks

• Target returns: The target return of 2x capital suggests a high-risk investment strategy.
• Companies: Supplying risk capital to early-stage companies, most of which will rely on technology. 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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