IFA space ripe for EIS investment: Committed Capital

IFA space ripe for EIS investment: Committed Capital

Steve Harris, the chief executive of London-based investment managers Committed Capital, has said he is investing EIS funds into the financial advice sector.

He said the regulatory changes which have taken place in the financial advice space have made it a “fascinating” area for investment.

Mr Harris said: “There are interesting things happening in the IFA space and we have been investing there.

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“We have spoken to a couple of companies and one of them was Fairstone Group [established as Moneygate Group in 2008] and it has been a real success. It has grown from nothing under advice to about £4.2bn to date.

“They have got phenomenal software. There is an element of technology and automation in their process but we think the advice they give is above average.

“We think what they are doing is the way forward.”

Mr Harris’s London-based firm runs a £20m EIS growth fund which has delivered annualised returns of more than 41 per cent from 24 investments since 2001.

His fund invested £2m into Fairstone Group in June 2011 and still has money invested.

Moneygate Group, which was rebranded as Fairstone Group earlier this year, has funds under management of £1.5bn and 60,000 clients.

Mr Harris added that the wider fintech market is also “exciting” and said his fund has invested in TradeRiver Finance, an online trade finance provider.

He added that one of the issues facing EIS funds at the moment is the fact that unlisted technology companies can be overvalued.

Mr Harris said: “One of the issues we have got at the moment is that unlisted technology companies look over the pond, where valuations have gone up really quite dramatically since 2008.

“But we cannot stop investing, we just need to find other opportunities.”

Adviser view

Steven Williams, a director at London-based Evolve Financial Planning, said: “EIS is active management and I have got thousands of reports which tell me active management doesn’t work.

“Having said that, in light of the recent Budget and the changes to pensions there are not enough advisers to deal with the demand so I suppose it is as good an investment as any.”