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EIS Association launches risk guide

18 June 2018

The Enterprise Investment Scheme Association has published a new guide to help investors understand the risks that accompany enterprise investment scheme investments.

The free guide EIS: Managing the Risks follows a number of changes made to EIS in the 2017 Autumn Budget and 2018 Spring Statement and seeks to explain how these announcements have affected the level of risk that financial planners and their clients face.

The changes included increasing the investment limits for knowledge-intensive business and removing the option to invest in lower-risk, asset-backed EIS offerings.

The guide also seeks to highlight how risks can be managed, exploring the importance of diversification as well as a credible and coherent investment strategy in helping financial planners choose the right fund manager for their clients.

Since inception, EIS has raised a total of £16.2bn for over 26,000 small and medium-sized enterprises. By giving companies the opportunity to raise up to £5m a year – capped at a total of £12m in a company’s lifetime – the EIS has grown to become an important platform of growth finance for start up and scale up entities.

The guide, sponsored by EIS fund managers Oxford Capital, Symvan Capital and the Kuber Ventures Platform, as well as law firm Mills & Reeve, is the latest in a series of educational guides from the EISA.

Mark Brownridge, director general of the EISA, said: “A detailed survey we conducted with investors and consumers in the wake of the Spring statement announcements showed that almost a third of British investors believe that knowledge-intensive companies, such as those in the energy-tech, med-tech and fin-tech arenas, are set to grow in the next year. These sectors are set to rely heavily on EIS and SEIS funding, so we felt it was important to produce a guide to to help explain to investors and financial planners where EIS now stands.”

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