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- £20,000MIN. INVESTMENT
- EvergreenCLOSING DATE
Founded in 2008, Par Equity's investment model is designed to identify and back the most innovative, high growth technology companies in the North of the UK. We're based in Edinburgh and we're investing across Northern England, Northern Ireland and Scotland.
We harness the expertise and contacts of our Par Investor Network and wider contacts to create a distinctive, operationally focused investment model that benefits both investors and entrepreneurs.
The Fund is focused on innovative companies. These are companies which are developing new technologies for sale or using advances in technology to disrupt existing markets. Par Equity has invested in companies operating in areas such as software, public health, e-commerce, social media, consumer electronics, photonics, technical textiles and medical devices.
The unifying characteristic of Par Equity’s portfolio is therefore the importance of innovative technologies to the investment case underpinning each commitment of capital. In building the investment case, Par Equity draws on the experience, expertise and contacts of the Investment Team, but also the resources of individuals within the Par Investor Network. In this way, Par Equity can make informed decisions across a range of sectors, providing the potential for Investors, over a series of Subscriptions, to gain exposure to a diverse range of growth-oriented investments
- EIS Fund manager with one of the best track records in the industry
- A hands-on investor, providing access to opportunities at sensible valuations in Scotland, Northern Ireland and the North of England
- 96% of client monies invested through a fee light investment model, inclusive of VAT
- 9.8 months average deployment into 8 companies (at 30th September 2020)
- 96 days average receipt of EIS Certificates (at 30th September 2020)
- Providing access to a distinctive hybrid investment model built up by the extensive Par Investor Network, adding value across all 4 stages of the investment life cycle from deal origination to exit management
- Generating brilliant returns for our investors, demonstrating scale and strong statistical significance in what we’re doing.
The Fund has no maximum or minimum size. Investors may subscribe in multiples of £1,000, subject to a minimum Subscription of £20,000. There is no maximum Subscription, but individuals are currently restricted to £1 million of EIS investment for each tax year.
The Fund will provide growth capital, targeting preseries A and Series A funding rounds whereby the company has a monthly revenue somewhere in the region of £20k - £200k, i.e., the business has good traction, proven demand and is rapidly establishing its position in the market, but valuations are still in an acceptable range. The Fund will also consider pre-revenue opportunities if the proposition is particularly attractive. Par Equity generally participates in investment rounds of at least £0.5 million per Investee Company and will consider rounds of up to £5 million of equity finance.
Each Investor’s Subscription will be used to invest it into a target portfolio of 7-8.
Nearing £100m of realisations for our Investors through company disposal:
• Sold Symphonic Software for 8.3x for EIS Fund investors during the period.
• DeltaDNA is now sitting at 27x money to EIS Fund investors as our paper stock in the acquirer, Unity Technology, continues to appreciate.
• Our first two tax year cohorts of the EIS Fund are sitting on 8x money, with 1 company remaining to be realised. This is before tax relief, and after all fees, including performance fees.
Portfolio continues to perform well.
• Holding 39 companies, 30 of which are in the EIS Fund portfolio
• 9 companies have had acquisition interest in the quarter, 8 of those are in the EIS Fund portfolio
Leith has over 50 years’ experience in the financial services industry having held senior roles in large international banks with a focus on structured finance. Highly experienced in his field, Leith is disciplined and focused on exit strategy and planning for our portfolio companies.
Paul is a Chartered Management Accountant and has experience of corporate management, turnarounds, business development and active share holder engagement. He has a Bachelor of Laws degree from the University of Glasgow.
Paul has over 20 years’ corporate experience across several sectors, principally consumer goods, manufacturing and healthcare, with companies such as Mars Confectionery, BUPA and Price Waterhouse. He has worked in and has extensive experience of the US and the Far East as well as Europe. In addition to his management experience, Paul has acted as both principal and adviser in a number of corporate finance transactions. Paul joined Dawson International plc, an international textile business, in 1996, where he was appointed Group Finance Director before being appointed Chief Executive in 2000. Paul was a non-executive director of European Home Retail plc between 2002 and 2007. From 2005 until joining Par in 2008, Paul worked for Hermes Fund Managers Limited and was responsible for the successful commercial development of Hermes’ corporate governance and active shareholder engagement services.
Paul is an entrepreneur and serial angel investor. He has a substantial track record building value for companies in the technology and services sector and taking them to a successful exit. He has a BSc in Physics from Manchester University.
Prior to co-founding Par Equity, Paul has started three previous businesses: Head Resourcing, which was founded in 2001 (2017 turnover - £65 million); Direct Resources, which was acquired by NASDAQ listed iGate Corporation in 1999; and RecruitmentScotland.com, which was acquired by another NASDAQ listed business, TMP Worldwide, in 2000. As a business angel, he has also invested in a number of other fast-growing technology companies, including Rocela Group, which was recently acquired by Version 1 of Ireland, and Mobiqa, which was acquired by NYSE listed NCR Corporation. Paul stepped down from his executive role with Head Resourcing in 2008 to establish Par Equity LLP but remains a major shareholder in the business and is also non-executive Chairman. Paul also serves on various boards and industry bodies.
Since 2008, Par Equity has had 19 realisations delivering a composite 3.1x money multiple and a 26% IRR (as at 30th September 2020). Par Equity has been returning money to its investors every year since 2013. Exits are, of course, a key area of focus and critical to driving returns to Investors.
An investment in the Fund will create a portfolio of holdings in privately held companies, with no established secondary market for the sale of such holdings. Investments are therefore held for the medium to long term driven by a requirement to qualify for EIS relief (minimum holding period of 3 years) and to also allow enough time for the company to create significant value in the business. In the ordinary course of business, Par Equity will not look to dispose of holdings in portfolio companies within the 3-year period, although in exceptional circumstances it may be commercially sensible to do so. Critical to Par’s investment strategy, and once the 3-year holding period has been satisfied, we will work with the management team and our Investor Network to identify and secure attractive sale opportunities.
Par Equity retains 4% of the Subscription for Advised Investors, such that up to 96% of the Subscription is available for investment in EIS Qualifying Companies. Within this retention of 4%, we include a 1% Initial Fee and four years’ worth of Annual Management Charges at 0.75%, inclusive of VAT and any other dealing charges. For Non-advised investors, there is an additional 2% Initial Fee, subject to a loyalty discount.
For the fifth and subsequent year, Annual Management Charges will be deducted from the Investor’s EIS Share Account (subject to available funds and net of any realisations after year 4). There is also a Performance Fee of 20% (inclusive of VAT) on returns in excess of 120% of the Subscription. For the avoidance of doubt, the Performance Fee is not payable until the Investor has received, as a minimum, the entire value of their Subscription, plus 20%. The cost of the EIS Custodian Account is met from fees paid to Par Equity.
All fees are quoted inclusive of VAT where applicable.
Subscriptions to the Fund will be used to make investments in Non-readily Realisable Securities, which can involve a high degree of risk. The Fund may not be right for all investors and so potential investors should seek independent financial and tax advice before investing.
The content above has been provided by Par Equity who are authorised and regulated by the Financial Conduct Authority under firm registration number 485668.