By Claire West
MMC Ventures (MMC) has attracted considerable interest in its new fund, the only EIS venture capital fund specifically created for younger investors. The Growth Generation Fund, which was oversubscribed, closed today with over 60 new EIS investors.
Rory Stirling, investment manager at MMC said: “The interest in the MMC Growth Generation Fund exceeded our expectations and we are delighted with the result. The average investment was nearly twice the minimum subscription and shows that younger investors want access to venture capital as an asset class. Given the current economic environment and pension expectations it’s more important than ever for investors to be creating capital growth in their portfolio over the long term.”
“Our new investor base, made up of successful young professionals, has told us that not only do they see this as a good investment opportunity, but that this type of fund provides them with a sense of ownership and the ability to learn about venture capital investing, which they believe to be of real added value.”
The fund is unique in that it creates accessible venture capital investing for 18 to 35 year olds with a minimum investment of £2,500 (maximum of £10,000) and no management fees.
Venture capital has typically only been open to high net worth individuals with at least £25,000 to invest. The EIS tax reliefs mean that the most an investor risks is 48% of capital invested at a 40% tax rate, falling to only 40% at a 50% tax rate.
MMC invests in businesses that operate in high growth sectors and where MMC’s involvement accelerates growth, providing significant returns to our investors.
The Growth Generation Fund is structured as an unapproved EIS fund. The Fund comprises a pool of money managed by MMC on a discretionary basis. MMC will invest the fund in at least four companies, within 12 to 18 months, to create a portfolio of EIS-eligible companies. These investments include both new deals and follow-on funding rounds for existing investee companies.
MMC initially invests between £500,000 and £2 million of capital in UK businesses that have already demonstrated market acceptance of their proposition. MMC supports investee businesses through follow-on funding as they grow and achieve forecasts; typically investing up to £5 million in any single business.
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