Seneca Partners has announced the launch of its AIM focused EIS fund.
The Seneca AIM EIS Fund will offer investors a spread of five to ten investments in AIM only quoted companies and targets a return of at least 1.5x net of fees before any tax reliefs are taken into account. There will be no annual management charge and the minimum investment is £20,000. The Fund will seek to exit all investments within four years, thus bringing EIS investment horizons back within a more defined timeframe.
The first £5m tranche is now open for investment.
Seneca Partners has an impressive track record of AIM investing as a component within its EIS Portfolio Service. It has invested £24m in AIM-quoted companies since 2013 and has already returned £23.6m of cash to investors with its current AIM portfolio worth an additional £19.1m. This represents a combined return of £1.78 per £1 invested, excluding tax reliefs.
The Fund will be delivered across a series of small tranches to ensure deal flow and investor demand is well-matched. It’s designed to complement Seneca Partners’ EIS Portfolio Service, which blends both private and AIM-quoted investments.
Seneca Partners investment director, Matt Currie, commented: “Recent rule changes to EIS qualification generally means that exit horizons for privately owned companies are becoming stretched due to investments being made at an earlier stage in the lifecycle of a business. Investors in our existing EIS service have benefitted from much shorter exit timescales from their AIM quoted holdings which we expect to replicate in the new Fund, therefore enabling investors to utilise their initial tax reliefs much more effectively.
“The benefits of being AIM-quoted appeals to those who enjoy the inherent due diligence, daily market pricing, regulatory news flow and liquidity associated with public companies. This visibility and access to capital markets mean the size and scale of the investee businesses are generally much more substantial and less vulnerable than many of the privately-owned companies – which must overcome many more challenges in the route to an exit.
“Many providers see an IPO as one of their primary longer-term exit aspirations for their investee companies. In using AIM-quoted businesses as our starting point we have removed a large element of uncertainty for investors in understanding how their cash will ultimately be returned to them.”