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Setting up a new PE or Venture fund – Part 5: Raising Capital

Now that you have prepared your plan and your materials, and have your permissions, structures and advisers in place, there is nothing to stop you reaching out to investors and hoovering up commitments to Excellent Fund I. You (or someone else in your team) may be an experienced capital raiser, however this is one area where many first time managers look for outside help. The challenge, of course, is that most first time funds are seen as a risky proposition by

Hambro Perks to allow individuals to co-invest in its VC deals

Venture capital firm Hambro Perks, run by City grandee Rupert Hambro and former investment banker Dominic Perks, has opened its doors to retail investors for the first time. An innovative and interesting market development comes from Hambro Perks, which is now launching an EIS fund, administered by Mainspring, which will allow retail investors to make tax-efficient investments alongside the Hambro Perks business. With the new EIS fund, the firm aims to avoid the pitfalls which others have fallen into. While some funds

Setting up a new PE or Venture fund – Part 4: permission & formalities

Parts 1-3 of this series of articles have looked at the areas where you should have conviction in order to invest the time and other resources required to launch a fund, as well as covering the fundamental cash flow and pertinent business considerations for any want-to-be fund manager. An important feature of investment management that we have not yet touched on, however, is regulation. Private equity and venture capital managers must be regulated in any market in which they plan to

EIS Association: 2017 Best EIS Custodian and Fund Administrator

Mainspring picked up the gong at the industry EIS Association awards for ‘2017 Best EIS/SEIS Custodian/Administrator’ – the inaugural year for this award. The award included categories, amongst others, for investor reporting, range of services offered, new initiatives and though leadership on the industry. On announcing the award the judge’s comments included “Mainspring have demonstrated their commitment to investing in IT infrastructure. Their willingness to be flexible to different fund types and welcoming new entrants are admirable qualities.” Stephen Geddes CEO picked up

Setting up a new PE or Venture fund – Part 3, your fund as a business

Up until now, this series of articles has focused on some questions that need confident answers before it is prudent to sink the time, cash and other resources required into launching a new fund. This time we will concern ourselves with just one issue: How do I run the business side of being a fund manager? Like any business, your fund management company needs a financial plan.  You must have a clear plan as to how you will cover the costs and

Setting up a new PE or Venture fund – Part 2: creating value

So, let’s fast forward to the first investment from your new fund: how are you going to improve the value of your new portfolio company? Value creation has come under increasing scrutiny since the financial crisis, 10 years ago. Even if leverage is an important component in your investment strategy, using leverage as the primary tool to generate returns is no longer sufficient. Today, successful managers are able to point to strategies and operational improvements that they have successfully used

Setting up a new PE or Venture fund – Part 1: first things first

Launching a private equity fund will typically involve raising a large amount of capital from individuals and institutions, but there are many steps that need to be taken before it is time to reach out formally to potential investors with your proposition. This series of short articles aims to introduce first-time and would-be fund managers to the steps that need to be taken to launch a private equity fund. First, we will look at the tests you must subject your

Seedcamp: Fund IV first close – Building Tomorrows Unicorns

Europe’s longest standing seed fund announces the first close of its Fund IV raised from 60 leading corporates, venture capitalists, fund of funds and high net worth investors from across the world. Seedcamp, the European technology investor in start-up’s tackling global challenges, which already counts a Fintech Unicorn (in excess of $1B Company valuation) amongst its investee businesses, has today announced the first close of its Fund IV. Mainspring is pleased to announce it has been appointed as fund administrator for Fund

Improving your EIS fund operations with Mainspring Fund Services

EIS finished 2017 on a high after it received a ringing endorsement in the Chancellor’s budget by upping the limit of investment for knowledge intensive companies. While funds focused on capital preservation will now find it much harder to get clearance, the view from the IFA community was that despite a potentially enhanced risk to investors money, the overall demand for EIS investments will increase among their clients. To meet this growing demand, and in light of the increased attention

When starting your EIS fund, the role of custodian and nominee?

The legal structure of an EIS fund is such that the ‘fund’ isn’t in fact a legal entity but a figurative or marketing term used for the portfolio of investments structure seen in EIS. In order to qualify for EIS tax relief an investor must possess ownership of the shares in the company in which it invests, investment cannot be pooled (via a separate legal entity such as a fund) with other investors. The ‘fund’ is typically structured with: (i) a