WHEN THE ADVISERS MET THE EIS FUND MANAGERS Back at the end of November, Calculus Capital kindly played host to GBI Magazine’s latest EIS Round Table session; the participants were an even even split of financial advisers / planners and fund managers / providers. The highly flexible agenda included the Patient Capital Review’s effect on EIS, investee company selection, levels of investment success and failure and how to make the Scheme work harder. The intention was for both sides to get a clearer picture of the issues and concerns that they each face.
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ohn Glencross, CEO and co-founder of Calculus Capital, kicked off with a sobering statistic: “The UK is number 3 in the world when it comes to starting companies – but we’re 13th in terms of being able to scale them.” He noted that in the 25 years of EIS, it had proved to be the most important source of funding for UK growth companies. Two years ago he had taken part in the Patient Capital Review and the result had been “a mixed bag – which is normal. EIS was supported, but certain abuses and misuses were addressed. VCTs were supported too – both were regarded as playing a significant role.
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GB Investment Magazine · February 2020
“What it didn’t crack is scale-up. We’re still struggling when a UK company needs £30-40m to grow, except in certain tech areas. A lot of our best companies end up getting bought, usually by Americans. That’s fine for investors, but what UK PLC needs to sort out is scale-up. Do we persuade the big pension funds to put in more? Woodford hasn’t helped there. Ask a fidelity with a small company fund, they won’t put in less than £250m. “The Patient Capital Review closed a few loopholes around film project finance, but it didn’t do much for companies which want to continue growing but aren’t in the corporate tech bubble. Such funds are
