An enterprise investment scheme fund manager has launched one of the first taxman-approved knowledge intensive EIS funds, providing investors with tax relief at a pre-determined date.
Parkwalk told FTAdviser it had launched the fund, which invests in “groundbreaking deeptech businesses spun out of UK universities”, to run alongside its £330m flagship Parkwalk Opportunities EIS fund.
Investors are recommended to hold the fund for four to eight years, which comes with an entry fee of 3 per cent for advised investors, annual management fee of 1.5 per cent and a performance fee of 20 per cent on profits.
The Parkwalk EIS Knowledge Intensive fund works within the government’s recent changes to EIS rules.
From April 2020, at least 80 per cent of funds raised in an approved EIS fund structure must be invested in knowledge intensive companies.
Knowledge intensive companies are those that are carrying out research, development or innovation at the time they are issuing shares, and investing in them provides certain tax advantages for investors.
Most EIS funds currently in the market allow investors to claim income tax relief when the funds are deployed into underlying portfolio companies, the date of which is unknown and normally set over a 12-18 month period.
However with the new knowledge intensive EIS funds, the relief is dated for when the fund closes, with carry back options available.
Parkwalk said this provided investors with the benefit of a known tax date from which they could claim income tax relief, alongside overall reduced administration which was introduced with the new type of EIS investment.
The new fund will close at the end of the tax year in April 2021.
Moray Wright, chief executive of Parkwalk, said: “At a time of immense global change, we are pleased to be able to build on our recent success and offer this new Parkwalk EIS Knowledge Intensive Fund to investors.
“The fund will sit alongside our evergreen Parkwalk Opportunities EIS Fund, and follows the successful close early this year of our latest university specific EIS funds, the Imperial College Innovation Fund I and University of Cambridge Fund VII.
“The Parkwalk EIS Knowledge Intensive Fund takes advantage not only of the UK’s word leading position in research and development and our position as the most active investor into UK university spinouts, but also the government’s support for this sector to allow a simpler EIS investment.”
imogen.tew@ft.com
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