Last checked at 18 Jan 2010 07:00
18 January 2010
Braveheart Investment Group plc
("Braveheart" or the "Group")
Braveheart Launches Beta EIS Fund
Braveheart (AIM: BRH), the technology commercialisation and investment management company, today announces the launch of its Beta EIS Fund ("the Fund"). The Fund, a successor to the Group's Alpha EIS Fund, is an HMRC approved Enterprise Investment Scheme ('EIS') fund which will provide risk and investment diversification from a balanced portfolio approach, with exposure to various industry sectors and stages of company. Investments will be principally in technology-based companies which have the potential to make significant capital gains in the next five years.
Braveheart currently has interests in a portfolio of 48 companies and the Fund will provide follow-on funding to selected portfolio companies as well as making new investments. UK investors in the Fund will be able to take advantage of the favourable tax treatments associated with the EIS regime. The minimum subscription to the Fund is £10,000 and the maximum is £500,000 per individual (or £1m per couple). Copies of the Fund's Information Memorandum are available to qualified investors or can be obtained via professional advisers.
Geoffrey Thomson, Chief Executive of Braveheart, said, "We have been constructing EIS portfolios since we formed Braveheart in 1997. Since that time we have seen EIS grow from being a grossly under-utilised and misunderstood asset class to what it is today. With the 50% rate of tax looming, EIS has now come of age and is an asset class in its own right.
"We believe high net worth investors should have an exposure to the EIS asset class. The advantage of EIS is that investors can back high risk/high reward companies in a tax efficient way. If the investment fails, the investor can set the loss against tax: on the other hand, if the investment comes good, the investor can realise the gain without, in most cases, paying tax on the profit.
"But there is another side to EIS investing. We all require our money to work hard, but by EIS investing the investor is helping today's little businesses become tomorrow's large ones. That is important. Our EIS investors buy shares directly in the underlying entities we decide to back. This is very different from buying shares in a traded vehicle (such as a VCT) and ownership is much more tangible. It is good for investors to see the management teams that their money is backing - this makes it more real, more understandable and more personal.
"On balance over the last thirteen years, our rebased client portfolio of realised investments (both good and bad exits) has doubled in value every 30 months. This return is before any EIS tax breaks are factored in. We believe this performance leads the EIS market. Looking at specifics, six of our companies have listed on public markets and two of those companies were worth an aggregate £425m on the day they listed on London's main market. We have also sold three companies by trade sale and/or secondary purchase.
We have interests in 48 companies and within this portfolio there are some outstanding businesses in which the Beta EIS Fund may invest. Alongside this we have a strong pipeline of new opportunities. Beta investors will benefit from a portfolio that is diversified in terms of sector and stage."
For further information please visit www.braveheartinvestmentgroup.co.uk or contact:
Braveheart Investment Group
Geoffrey Thomson, Chief Executive
Tel: 01738 587555 / gthomson@braveheart-ventures.co.uk
Tavistock Communications (for Braveheart)
James Midmer / Simon Hudson
Tel: 020 7920 3150 / jmidmer@tavistock.co.uk
Seymour Pierce Limited
John Cowie
Tel: 020 7107 8000 / johncowie@seymourpierce.com
Key Features of the Fund
Objective
The objective of the Beta EIS Fund ('Beta' or the 'Fund') is to provide investors with a diversified portfolio of tax efficient investments. Investments will tend to be in technology-based companies and all investments will have the potential to make significant capital gains over a five year period.
Manager and track record
The manager of the Fund will be Braveheart Ventures Ltd, a wholly owned subsidiary of the Group. The Group's Chief Executive Officer, Geoffrey Thomson, and the Chief Investment Officer, Carolyn Smith, have worked together at Braveheart since 2000 and have been responsible for establishing the existing client portfolio. This portfolio is showing what are believed to be market leading returns: as at 31 March 2009, 19 exits have been achieved of which six have been initial public offerings ('IPO's), three have been trade sales/secondary purchases and ten have been write-offs. This performance equates to an Internal Rate of Return ('IRR') of 33%. Two of the IPOs have been by way of main London market listings and both are technology companies.
Current portfolio and pipeline
The Group has interests in 48 portfolio companies. These interests are either by way of direct investment by the Group or by way of the management of client or fund portfolios. This portfolio comprises principally technology investments that span a number of different industry sectors. It also contains companies at various stages of development. This portfolio provides a strong pipeline of investments for the Fund.
The Fund
The Fund has been approved by HMRC as an Approved EIS fund. In order to comply with the legislation, the Manager will seek to invest at least 90% of the Fund within 12 months of its closing, and the Fund will make a minimum of four investments. Notwithstanding, the Manager expects that the Fund will invest in at least ten companies and that all of these investments will be made within the requisite time frame. The Fund will close to applicants on 31 March 2010. The maximum investment into the Fund is £500,000 per individual or £1m per couple. The minimum investment into the Fund is £10,000. There is no maximum or minimum Fund size.
Investment policy
The Manager will seek to build a balanced portfolio with exposure to various industry sectors and stages of company. Investments will be principally in technology and will be made by way of follow-on into the existing portfolio and also into companies which are not currently in the portfolio. Investments may be made alongside other private or public sector funds managed by the Manager. The Group has pre-emption rights in respect of existing portfolio companies and these pre-emption rights will be available to the Fund as a 'first option' in the event that existing Braveheart client shareholders do not take up their allocations in full.
Exits
The Fund will be managed from an EIS perspective and exits will be sought in three to five years. It is anticipated that the Fund will be wound up at the end of year five. Investors in the Fund will have a range of options for realising investments which are still active when the Fund is wound up.
EIS
Subject to personal circumstances, investors in the Fund will benefit from a range of tax reliefs that encompass income tax relief, capital gains tax (CGT) deferral, CGT exemptions, loss relief and business property relief (for inheritance tax).
Notes to Editors
Selected current portfolio companies
Software & computer services
AppShare Ltd was formed in 2007 as a spin-out from the University of Strathclyde. The company has developed a collaborative software solution, simply known as 'AppShare™', which allows the sharing of electronic information and software applications between groups at different geographical locations. AppShare™ is unique in that it can be integrated with other existing software applications and its multiple collaboration sessions have minimum impact on network performance for other users. The company expects to pilot the technology in 2010 and commence the development of partner relationships and sales channels thereafter.
www.appshare.co.uk
Founded in 1999, Bloxx Ltd is an award-winning web filtering company which has developed novel approaches to prevent inappropriate use of the web by employees. The company uses its patented technology, Tru-View, to analyse and categorise web pages quicker and more accurately than other web filters. Over 1.5 million users from an impressive customer list already benefit from enhanced security and performance. Bloxx has expanded to a multimillion pound operation with products sold in Europe and North America.
www.bloxx.com
Dimensional Imaging Ltd is a spin-out from the universities of Edinburgh and Glasgow and was the first company to be supported by the Group's SMART Equity Fund. The company provides a range of 3D and 4D surface image capture and analysis systems which result in accurate, high-resolution 3D surface models of specific parts of the body e.g. the face, torso and limbs. Applications include medical and dental applications which can assist in planning and assessing maxillofacial surgery, the manufacture of radiotherapy and burns treatment masks and the manufacture of orthotics and prosthetics. The company has also recently revealed its new facial expression capture system for the entertainment industry.
www.di3d.com
Nutratech Limited, a Nottingham-based company operates one of the UK's leading online diet and nutrition websites, offering subscribers their own personal diet diary, a database of some 30,000 food items and nutritional meal plans. Founded in 2004, Nutratech secured two rounds of investment through the Group. It manages a number of white label websites for well-known high street brands, is operating profitably and expanding fast.
www.nutracheck.com.uk
Founded in 2004 by a group from the Real-time Systems Research Group at the University of York, Rapita Systems Ltd are experts at analysing the timing of real-time, avionics systems to identify potential problems and the make them as fast and as reliable as possible. Rapita's innovative RapiTime product is a world leader in software performance analysis and worst-case, execution time analysis. The company raised a single round of investment from VFM and private investors in 2005, and is now operating profitably, with many blue chip clients in the aerospace industry in Europe, the USA and China.
www.rapitasystems.com
Technology hardware & equipment
Cascade Technologies Ltd is a spin-out from the University of Strathclyde. The company has created novel technology which uses quantum cascade lasers to provide breakthrough products that create instant DNA-type fingerprints of gases, enabling their presence and quantity to be detected. The technology can be applied to multiple applications, such as emissions monitoring in the marine and power generation industries, and the detection of explosives and chemical agents. Cascade's technology is being used globally and is low maintenance requiring little or no calibration making the products a cost effective way of measuring emissions in real time.
www.cascade-technologies.com
Diamond Digital Holdings Ltd - founded in 2009 and based in Sheffield, Diamond designs, develops and manufactures dispersions for inks used in ink-jet printers, as well as supplying the refill market. It raised investment in 2009 from the Group and a consortium of private investors to expand its facilities and provide working capital to service new customers across Europe, South Korea, India, China and Brazil.
www.diamonddispersions.com
Elonics Ltd was founded in 2003 and is a fabless mixed-signal semiconductor company specialising in the development and sale of multi-band radio frequency IC products. DigitalTune™ is the company's flexible radio tuner chip platform that can be configured to support different standards and frequencies for a number of applications. The E4000 is the company's initial release and is a flexible TV tuner component for portable and handheld devices offering the manufacturer low power consumption and low system costs.
www.elonics.com
Edinburgh-based Pyreos Ltd manufactures infrared component products aimed at mainly industrial applications such as spectroscopy, gas sensing, and security and energy management. The technology was transferred to Pyreos from Siemens and Pyreos has gone on to rapidly develop a range of infrared sensors for each of its target markets that offer compelling advantages over competitors' products. Pyreos is building an international customer base, including early adopter brand names in the field of infrared technology, and has recently signed two long-term supply agreements with an export value of £8m over the next five years.
www.pyreos.co.uk
Electronic & electrical equipment
Conjunct Ltd was formed in 2003 as a start-up from Heriot-Watt University. The company was established to develop disruptive technology for short range, high speed optical communications. Its proprietary technology 'Fibre-Lyte' aims to offer benefits in the packaging of optical components in the data communications market, the size of which has typically been restricted due to the high cost and specification of components.
www.conjunct.co.uk
Design LED Products Ltd has developed a printed light guide technology which provides an inexpensive method of producing thin, flexible signs and displays illuminated by embedded light emitting diodes. The displays can be formed into 3D shapes and can incorporate different colour and lighting effects as well as movement and animation. Application areas include consumer electronic displays, backlights for LCDs, automotive and industrial panels and keypads, and brand logo enhancement. The company has also collaborated with ITI Scotland to develop a thin, power-efficient backlight unit which can be manufactured at a cost point that is attractive to the display market.
www.designledproducts.com
Pufferfish Ltd - established in 2004 as a spin-out from the University of Edinburgh, Pufferfish designs and develops inflatable spherical projection displays for use in the audio visual industry. The PufferSphere is of lightweight design, has a stable image projection and a compact footprint making it easy for artistic creators to incorporate into their installations. Equally, it offers camera teams the ability to fly-by, zoom, pan and jib around displays creating a visually stunning effect for the audience. Recent successes include six units used by Coldplay during their recent world concert tour, the PGA Tour opener in Scottsdale, Arizona and the Eurovision Song contest in Moscow.
www.pufferfishdisplays.co.uk
Healthcare equipment & services
Biopta Ltd is a contract research company which provides specialist GLP-compliant services using ethically donated human tissue to evaluate compounds in a model close to human in vivo conditions. This serves to provide data on the human safety and efficacy of selected compounds much earlier in the drug development process, thereby increasing the predictability of drugs likely to be successful. The company delivers both validated assays and bespoke services to global pharmaceutical and biotechnology companies across therapeutic areas such as cardiovascular, gastrointestinal, inflammation, respiratory and CNS.
www.biopta.com
Tayside Flow Technologies Ltd ('TFT') was formed in 2000 and is focused on the research, development and commercialisation of vascular devices based on a new understanding of blood flow dynamics called Spiral Laminar Flow™ technology. This innovative technology restores the natural blood flow pattern in grafts and stents and TFT received section 510k approval in April 2009 from the US Food and Drug Administration to market its first graft product, a peripheral artery bypass graft. Sales commenced in June 2009.
www.tayflow.com
EctoPharma Ltd is a 'virtual' pharmaceutical company commercialising patented technology in the areas of human and veterinary medicine to compete in specific healthcare and pesticide markets. The company's proprietary technology has the potential to be the basis for a new generation of safer pesticides with less adverse health effects and reduced environmental implications. The lead product KindaPed for head lice treatment has completed phase 2 clinical trials demonstrating 95% efficacy. Research and development work is also underway with the London School of Pharmacy into a novel gene therapy employing cutting edge nanotechnology believed to have the potential to treat several forms of cancer.
www.ectopharma.com
About Braveheart Investment Group
Braveheart Investment Group is a technology commercialisation and investment management company based in Perth, Scotland. It was founded in 1997 by a small group of investors in order to encourage and syndicate investments in privately held companies that offered opportunities for significant growth. Twelve years on, Braveheart is a public company with offices in Perth, London and Yorkshire, and a demonstrable track record in early stage technology investing as well as an established client base of high net worth individuals. Service offerings include bespoke EIS portfolios, fund management, investment facilitation and management services.
Investments are made in young, emerging, unlisted companies where there is potential for significant growth through successful commercialisation of IP. Through close relationships with a number of leading universities and innovation centres Braveheart has access to a wide variety of emerging commercial opportunities at early stages.