Stellar Nova EIS Fund

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Now for the first time, as a private investor, you can invest in the Stellar Nova EIS Fund. In doing so you are investing alongside Nova in their Cofoundery portfolio. Along with benefiting from the many years of operating experience accumulated by the Nova team.
  • £10,000.00
    Min. investment
  • Generalist
    Sector
  • EIS
    Investment type

The Fund is an opportunity to invest alongside Nova in their portfolio of early-stage companies. Nova accepts the available data that suggests:

  • Companies within the technology market segment are on average growing at 34% year on year.
  • 92% of these technology start-ups typically fail within three years.
  • 80% of the mistakes that start-ups make are accounted for by five major errors.

Members of the Nova team have spent the last 10 years developing their Cofoundery model, in order to access this 34% year on year market growth, while minimising the risk of losses due to the high 92% failure rate of companies within this market.

The Cofoundery model works by seeking to address the most common reasons for failure which account for approximately 80% of all the mistakes which start-ups make:

  • Building something nobody wants.
  • Having the wrong cofounders.
  • Hiring the wrong people.
  • Failing to execute sales and marketing.
  • Chasing Investors, not customers.

Each Investor's funds are coinvested with Nova into a diversified Cohort within Nova’s portfolio of at least seven to ten early-stage knowledge-intensive companies, this diversification is large enough to reasonably mitigate the risk of failure across the whole Cohort.

The Fund further reduces investor risk and increases returns by allowing the investor to take advantage of considerable income tax, capital gains tax, and inheritance tax benefits available under the Enterprise Investment Scheme or Seed Enterprise Investment Scheme providing that the investor is a UK tax payer.

Highlights

  • An engaged hands-on approach from an experienced start-up team.
  • Free of initial fees to the Investor for subscriptions received via a financial adviser, facilitating up to 100% deployment of Investor funds ensuring maximum tax efficiency for the Investor.
  • EIS and SEIS tax advantages applicable, depending on personal circumstances.
  • The targeted return after six years is £2.85 for each £1 share held by Investors in the Fund which includes deductions for all investment management fees (including the performance incentive fee) and the benefits of EIS tax reliefs. Please note that this return is not guaranteed.
  • Performance fee aligned with Investors' interests.

Investment strategy

The Fund seeks to offer Investors exposure to a minimum of 7 to 10 Investee Companies each of which is engaged in solving industry problems with the use of a digital solution. It is envisaged that each Subscription will be deployed across each Investee Company on a diversified basis, at the discretion of the Investment Manager.

Nova takes a modern approach to deal origination and founder due diligence, regularly appraising over 25 opportunities before making an investment.

When combined with the EIS or SEIS benefits offered by the Fund we believe this makes a compelling proposition for investors:

  • A minimum return of 61.5p in the £1 in the unlikely event that every company in the cohort fails[v] (assuming maximum initial income tax relief and losses used against income at 45%).
  • The targeted return after six years is £2.85 for each £1 share held by Investors in the Fund which includes deductions for all investment management fees (including the performance incentive fee) and the benefits of EIS tax reliefs. Please note that this return is not guaranteed.

Key team

Tom Hind - Regional Account Manager

Tom is a senior member of the Business Development team. He focuses on devolping and expanding out network of supporting advisers and Investors and is based in London. 


Tom is halfway towards his Level 4 Diploma in Regulated Financial Planning and is also working towards his IMC. He is also a keen skier, supports Liverpool FC and plays football for his local team.

Jonathan Gain - Chief Investment Officer and CEO

Jonathan has been involved in financial services since 1993 when he graduated from Bournemouth University with a BA (Hons) in Accountancy. He joined the then newly formed Close Brothers Investment Limited in 1993 and was appointed Finance Director just five years later in 1998. In his role he was responsible for overseeing its property investment funds and numerous tax planning products, before becoming Managing Director in 2005.


When he left to set up Stellar, it had approximately £1 billion of funds under management. Drawing on his wide-ranging experience, Jonathan established Stellar Asset Management in 2007 along with the former founder of Close Brothers Investment Limited and two other colleagues. Jonathan remains the majority shareholder.


Outside of work he enjoys organising and participating in charity events, particularly sponsored cycle rides. He is a keen Manchester United supporter, as you would expect from someone who lives in the south! He also treats himself to a few days off work during the year to watch live cricket matches so he can follow the ups and downs of England’s test cricket team.

Alistair Marsden - Nova - Chief Marketing Officer

Alistair is both a founder of Nova and C-level sales and marketing professional with over 15 years of senior leadership and board experience of starting and growing industry-leading sales brands. 


He is responsible for oversight of the Nova Group’s commercial efforts as well as delivering the Fund Acquisition strategy. 

Pierre Clarke - Investment Manager – Corporate Development

Pierre joined Stellar in 2020. Pierre trained as a Chartered Accountant at Deloitte, and has worked in the tax efficient investment sector at a number of firms including most recently a partner at Downing LLP. 

Exit strategy

A clear exit strategy for investors is to be implemented within five to six years with an alignment of founder interests with shareholders.

For underlying investee companies, we expect that each exit will arise from a Trade sale, further capital funding, IPO or other exit opportunity triggered through a liquidity event.

Fee summary

The following fees will be charged to the investor:

  • Performance fee of 20% of the amount of cumulative total cash returned to the Fund by the Investee Companies into which the Investor's monies have been invested in excess of 120% of the amount of funds invested in the respective portfolio.

For clarification, once the Investor has received in cash the first 120 pence per 100 pence invested (ignoring any tax relief), any additional distributable cash will be paid as to 80% to the Investor and 20% to the Investment Manager.

The following fees will be charged to the Investee Companies:

  • Corporate advisory and arrangement costs - up to 5% of funds invested in the Investee Company.
  • Annual management charge - up to 2% per annum on the funds invested in Investee Companies.

From these fees, the Investment Manager will pay administration fees to Nova and up to 100% of investors investment may be allocated.

Risks

You should only invest in the Fund if you have financial security independent of any investment made. The value of shares purchased in the Investee Companies, and any income derived, may fall as well as rise and Investors may lose all capital invested. Past performance is not a guide to the future. Investing in EIS and SEIS companies is considered to be very high risk.

See Information Memorandum for full details.

Documents

Only registered investors can access the documents. Receive access by registering for an account.

Invest now

To digitally invest in this opportunity, review the documentation and start your application below.


The content above has been provided by Stellar Asset Management Limited who are authorised and regulated by the Financial Conduct Authority under firm registration number 474710.