Jenson EIS Fund 2021/22

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The EIS Fund has a mandate to focus on long-term capital growth and enables private investors to invest in a range of committed and ambitious entrepreneurs and their early stage growing companies.

  • £10,000
    Min. Investment
  • Generalist
    Sector
  • EIS
    Fund Type
  • Evergreen
    Closing Date

All companies will be small unquoted UK companies that qualify under the EIS tax rules. The Fund is a generalist fund, thereby the sector focus is agnostic and the type of businesses and opportunities can be anything that is EIS compliant (typically small early stage companies in non-capital intensive sectors). The specific focus of the Fund is to target companies with: strong management, momentum in the business (i.e. not pure start-ups) and low risk for a start-up (e.g. have a low cash burn).

For our EIS dealflow Jenson has access to its existing portfolio of SEIS companies.

Highlights

  • Follow-on funding for 15 of our existing portfolio companies.
  • First Exit from Voneus providing returns across five funds.
  • Next tranche close - December 2021.

Market approach

To demonstrate our support of Investee companies our EIS follow-on Fund has primarily been used to cornerstone further funding rounds. The vast majority are externally led follow on investments from a variety of sources. To date our portfolio has received investment from:

• VC’s such as EC1, North Star Ventures;

• larger EIS/VCT funds such as Downing, Foresight, BlackFinch, Mercia;

• Crowd Funding sites such as Syndicate Room, CrowdCube, Seedrs;

• Angel Groups such as Angels Den, Equity Gap, Gabriel;

• Venture Debt providers such as Boost;

• Regional Funds such as North West Powerhouse, Scottish Enterprise, Invest NI;

• Corporates such as Britvic; and

• a number of well-known ultra HNW’s from the investment community.

Investment strategy

Jensons’ experience is that the EIS/VCT market is highly competitive in businesses that are typically generating £1 million of revenue and are seeking additional funding, which has the effect of driving up prices. As mentioned, Jenson has internal access to the existing SEIS portfolio of companies. Jenson therefore has access to companies that we have been working with for a number of years so are able to identify the most promising companies for follow on funding, additionally they are likely to fit the EIS criteria given the early stage of investment. We also receive many requests for funding from external companies and are therefore able to benchmark against these opportunities and also invest if we believe they provide a better opportunity. The key difference is that we will invest earlier than our EIS/VCT competitors as we have extensive experience of early stage investing, we are perhaps more comfortable at the associated risk this brings. This is higher risk than a traditional EIS/VCT is reflected in the favourable valuations we typically invest.

In fact, it is this reputation of nurturing early stage businesses that has led to follow on investment/co-investment from many of the larger funds out there. From the existing portfolio, at least 25 have had at least one round of follow-on EIS funding from the Jenson EIS Fund, others from external providers. Nearly all of these rounds are externally led thereby validating the valuation of the companies which highlights that larger funds, family offices, VC’s and angel investors continue to invest in the companies we nurture to the next investment stage.

Key team

Sarah Barber - CEO

After qualifying with Deloitte as a Chartered Accountant, Sarah spent two years working as an audit manager before moving into Reorganisation Services working on a variety of projects, including turnarounds, cash flow management, financial reviews and receiverships. Subsequently, Sarah moved into the interim market, providing services to a wide variety of clients gaining a broad experience in all aspects of accounting and financial management. Sarah has direct experience with interim finance director roles, financial modelling, IFRS conversions, due diligence reviews, share option valuations, planning and complex analysis. Sarah joined Jenson Solutions in 2005. Sarah has been involved in the Fund since its inception. Over the past five years Sarah has been instrumental in the growth of Jenson Funding Partners, leading the team in fund raising, deployment and managing the portfolio of investee companies utilising her experience and knowledge gained as an FD.

Jeffrey Faustin - Chief Investment Officer

Specialising in early stage companies, Jeffrey joined Jenson in 2013 and is now responsible for managing all aspects of the investment process from deal sourcing through to completion and including post completion support. Jeffrey is also responsible for the Fund’s internal processes.

Before joining Jenson, he was a Technical Director working for WS Atkins across the Middle East where he ran a large technical team. Prior to that, Jeffrey spent the previous 10 years working as a design consultant advising clients on complex commercial and infrastructure projects.  Jeffrey studied at the University of Surrey, receiving an MSc in Structural Engineering. He also holds an MBA from the London Business School.

Exit strategy

Jenson had its first EIS exit in February 21, exiting Voneus provided a return across 5 EIS funds with returns to investors ranging from 2.2x to 4x.

Jenson have exited from seven of its SEIS portfolio companies with two further share for share deals and although our EIS is still too early to exit it will adopt the same strategies over time.

Jenson have demonstrated a variety of appropriate exit strategies on behalf of the Fund including trade sales to other companies in the same sector or industry as the investee company, listing on a stock exchange or by selling its share of the investee company to a larger private equity firm or instigated MBO’s.

Jenson takes a long-term view on the Fund’s investments and aims to only look at the possibility of exiting an investment after it has been held for at least three years, thereby ensuring that the investment has met one of the key qualifying conditions necessary for investors to obtain the tax reliefs. However, there may be occasions where an earlier sale is a commercially sensible decision.

It is anticipated that most exits from investments will take place after they have been held for between five to seven years, though some could take longer depending on market conditions and the nature of the investee companies.

Products and services

Jenson currently has an open evergreen EIS Fund, the Jenson Funding Partners EIS Fund 2021/22 and an open evergreen SEIS Fund, the Jenson Funding Partners SEIS Fund 2021/22.

Fee summary

Linked to the performance of your investment in the Fund Jenson will be entitled to a performance fee if and when a realisation of an investment in an investee company is achieved and the hurdles set out below are met. Performance fees will accrue on a deal by deal basis where funds are distributed back to investors following a realisation. Where:

a) aggregate distributions to the investor exceed the net cost of the investor’s subscription in the investee company in question by 20% an entitlement to a performance fee of 25% of further funds so returned will accrue to Jenson; and

b) accrued performance fees will become payable once, and to the extent, the investor has received 120% of their ‘Net Subscription’ (Subscription less facilitation fees) to the Fund.

By way of example, where sale proceeds are realised following an exit:

- NO performance fee is payable if the aggregate return from an investee company including dividends and other distributions to an investor is 120p (OR LESS) per 100p (ignoring tax reliefs) invested in that investee company;

- IF the aggregate return to an investor (including dividends and other distributions) from an investee company is MORE THAN 120p per 100p invested (ignoring tax reliefs), Jenson will accrue a performance fee of 25% of all returns from that investee company above that threshold – this fee will become payable if, and to the extent, that the investor’s overall distributions from the Fund are in excess of 120% of the investors’ Net Subscription. The entitlement to performance fees may be paid in cash or structured by way of subscriptions for shares in investee companies by or on behalf of Jenson.

Risks

Prospective Investors should be aware that the value of an investment in an investee company can fluctuate. In addition, there is no guarantee that the valuation of an investment will fully reflect the underlying net asset value of the investee company or of the ability to buy and sell the investment at that valuation. Investors should be fully aware of the high-risk nature of scale up investments in early stage companies. In addition, the statements regarding taxation in this document are merely a brief summary and should not be viewed as constituting tax advice. Representations in this Information Memorandum with respect to tax reliefs relate to the generic position of a UK-resident individual taxpayer and do not amount to tax advice to any person. The information below does not purport to be exhaustive. Additional risks and uncertainties, not presently known to Jenson, or which Jenson currently deems immaterial, may also have an adverse effect on the business of the investee companies. Investors should consider carefully whether an investment in the Fund is suitable for them in the light of the information in this document and their personal circumstances. If in any doubt whatsoever, an investor should not invest in the Fund. In any case, it is strongly recommended that Investors seek the advice of their Financial Intermediary or other appropriately qualified professional adviser.

More information on Risk can be found in our Information Memorandum.

Documents

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The content above has been provided by Jenson Funding Partners LLP who are authorised and regulated by the Financial Conduct Authority under firm registration number 820516.