Growing demand from investors keen to get a slice of tax-efficient investment funding rewards has seen two new major funds being launched.
Investors are keen to take part in the increasingly popular Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS) because they can take advantage of generous tax reliefs which make any potential investment very attractive.
Described by supporters as being the world’s most generous investment schemes for tax purposes, those investing under SEIS can claim up to 50% income tax relief on their investment and another 28% in capital gains tax (CGT) relief.
Investors only need a minimum of £100,000 to take advantage of SEIS.
Those taking up EIS investments can invest up to £1 million and take advantage of 30% income tax relief and defer their CGT. Both EIS and SEIS are exempt from inheritance tax.
SEIS oversubscribed
Heartened by the response to its Mercia Growth Fund 1 which was oversubscribed by eager investors, Mercia Fund Management (MFM) has unveiled a second fund.
Called the Mercia Growth Fund 2, MFM says it is hopeful that the fund will prove just as popular since the first fund quickly raised £2 million with its SEIS allocation being oversubscribed.
Mark Payton, the firm’s managing director, said: “This is an extremely exciting time for our team, our investors and investment portfolio – we’re working on finalising our investments from Mercia Growth Fund 1, and the interest in our new hybrid fund is already high.”
MFM invest in a range of sectors including ICT and healthcare and has now pumped in around £7 million into businesses which qualify under EIS and SEIS funding rules.
Investors keen to get involved with Mercia Growth Fund 2 will have to move quickly since it is now open and likely to prove so popular that it will close before its June 2013 deadline.
Meanwhile, a new EIS scheme which is targeting returns of 46% has been launched.
Events EIS
Future Capital Partners (FCP), an alternative investment company, says its new EIS product will bring a profit of £2.83 for every £1 invested, utilising the tax relief offered under the scheme.
Their Torch Platforms EIS is to provide luxury hospitality at major sporting and social events such as football tournaments and celebrity awards ceremonies.
There’s a minimum investment of £15,000 needed and the firm says it has already invested £1 million of its own cash into the scheme.
Piers Denne, a director at the firm, said that the luxury hospitality market had defied the global economic downturn and seen robust spending in recent years.
He added that by focusing on events around the world they would reduce risk by having an event portfolio covering different countries and markets.
