PensionsJun 24 2016

Product Review: SyndicateRoom Fund Twenty8

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Product Review: SyndicateRoom Fund Twenty8

SyndicateRoom has launched a Enterprise Investment Scheme (EIS) tracker fund.

Fund Twenty8 offers a diversified portfolio with at least 28 investments across multiple sectors. This differs from the usual approach within traditional EIS funds, which generally hold between five and 10 investments and focus on a single sector.

It aims to adapt traditional fund management techniques, by using technology to make investment decisions, and each deal on the platform is led by a business angel, venture capitalist and other lead investor.

The fund automatically tracks and matches investments made by SyndicateRoom members on a pound-for-pound basis until the company’s funding target is achieved. If an investment becomes oversubscribed and goes into overfunding, the fund will continue to invest and secure a larger weighting.

The fund is available to retail investors, SyndicateRoom members and institutional investors, with eligible private investors benefiting from the standard EIS tax benefits.

Minimum subscriptions of £10,000 and multiples of £10,000 thereafter are required. The fund has a maximum raise size of £25m with a minimum of roughly £10m, although this is at the discretion of the fund manager.

Initial and annual management fees sit at 1 per cent.

www.syndicateroom.com

EIS investment may be anticipating a surge following the most recent raft of government restrictions regarding pensions. Reduced limits on the amount that can be contributed annually and accumulated over a lifetime, will likely lead investors to explore other options providing tax relief.

The nature of investing through an EIS means the most risk-hungry investors would be suitable as small, newly formed companies will always have a higher tendency for failure.

By spreading investment into additional companies and sectors, the fund will be able to mitigate some of the risk, which may attract a wider range of investors. As the healthy tax relief on offer is the most attractive feature for EIS investors, the reduced risk offered here will be seen as huge opportunity for many investors.