PlayFund, an enterprise investment scheme and seed enterprise investment scheme fund, has launched targeting a return of 250 per cent.
The fund’s target return excluded tax reliefs.
The fund will invest in companies that own the intellectual property rights to video games, partnering with developers to create successful games and profitable revenue streams.
According to the investment house’s bosses, PlayFund will draw on the expertise and experiences of individuals who have held leading roles in some of the largest and most innovative companies in the gaming sector.
They include head of origination Harvey Elliott, who is a former chairman of the Bafta Games Committee and who has held senior positions at Electronic Arts, Acclaim Entertainment and Marmalade Technologies Ltd.
Mr Elliott has been involved with the Harry Potter videogame franchise.
He said: “The video games sector is one of the largest, fastest-growing and most commercially successful parts of the global entertainment industry.
“PlayFund gives UK investors the chance to access the growth of this market through the highly tax-efficient EIS and seed EIS structures, which provide 30 per cent and 50 per cent tax relief respectively, plus other tax benefits.
“The expertise that PlayFund draws upon means the investments made by the fund will have the greatest chance of success. That is why we believe our target return of 250 per cent after three years, is highly realistic.”
Ray Maguire, who is on the origination committee for PlayFund, has experience across the video gaming sector, including almost 20 years at Sony Computer Entertainment Europe.
PlayFund will be operated as an ‘evergreen’ fund, meaning investors will be able to commit capital at any time.
The minimum investment required is £20,000.
Jason Hollands, managing director of business development and communications at Tilney, said essentially Playfund was a discretionary management service, that will invested in these types of businesses, some of which may qualify for Seed EIS reliefs.
As a result of the SEIS status Mr Hollands said the businesses the fund will invest in will be very small, start-ups with no track records, while others will be structured as EIS deals.
He said: “The question investors in any such schemes which invest in wholly illiquid, unquoted companies, should ask themselves is ‘how and when will I get my money out?’
“While EIS rules specify that the minimum holding period to keep upfront tax credits is just three-years, that does not mean that in practice you will be able to realise your investment in that timescale.
“Exiting EIS positions usually results from a sale of the business.”