Highgate Tech Fund Reflects Both Government & FSA Ethos for Investing in Entrepreneurial Britain

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The Highgate Tech Fund, contrary to a recent FSA press statement, was only established to invest in British based companies and to deliver investors a profitable return, not just for the tax benefits.

Highgate Tech Fund

Highgate Tech Fund

Our intermediary clients, the advisor community and investors see the benefits and appreciate the ethos of a fund that exists to deliver profit not a tax break. A refreshing approach in this industry.

Highgate Tech Fund responds to recent concerns from the FSA about EIS fund marketing by proving again that not all EIS funds are the same. Since its inception in 2010, Highgate Tech Fund has taken a different approach to most EIS and VCT funds by focusing on the investments within the fund and working hard to deliver a profitable return on those investments. Many investment advisors are initially sceptical, but once they understand that the Highgate ethos is aligned with the government, with the investor and the investee company, they quickly recognise the benefits.

Highgate does not market its funds based on tax relief returns. In fact, the opposite is true. Highgate does not charge any fees to investors and only makes money after it has returned 6% annualised to the investor and therefore is only interested in profits and successful exits. At this point, Highgate shares profits with investors 75%/25% ensuring that the fund management team interests are completely aligned to those of the fund investors.

In addition, fund management puts its money where is mouth is by also investing their own personal money in the funds, and not just small amounts. To date, Tech Fund Managers have personally invested more than £500K across the two funds. The Fund Managers don’t do this for EIS tax benefits because they can’t. Instead, Highgate only invests in the very best of UK Tech Sector businesses, ones that the fund management team understand well (because that is what they have done all their working lives, create, build and exit tech businesses globally). Once the investment is made, the fund management team works closely with the investee businesses helping them to succeed and working towards a profitable exit for the investors. The Fund Management team have all worked extensively in the tech sector, building successful businesses and now want to help the most innovative and entrepreneurial British software companies to succeed, with investment and more critically, expertise.

Mr Matthew Lawrence, Principal of Horizon Funds says, “We were intrigued by the Highgate Tech Fund, which completely turns the EIS Funds sector on its head by not focusing on the tax breaks, although these clearly are still available. We could quickly see how our intermediary clients, the broader advisor community and end investors would understand the benefits and appreciate the ethos of a fund that exists to deliver profit not a tax break. A truly refreshing approach in this industry.”

The government led by David Cameron and George Osborne, are fully behind the true ethos of EIS (evidenced by recent improvements to the EIS Scheme), that is to support entrepreneurial Britain and incentivise wealthy investors to enter the higher risk arena of early stage companies. What Highgate seeks to do is to minimise that risk as much as possible by only focusing on a sector that they understand, investing in only the best companies in the highest growth areas and bringing in a broad range of businesses in each fund. By only taking any money from the fund on a successful exit, the fund management team ensures that their goals are entirely aligned with the fund investors, the government and the FSA.

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Emma Chablo
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