SyndicateRoom has announced the launch of Fund Twenty8, a new investment fund designed to make investing in early stage companies easy and efficient. As we all know, portfolio diversification is key to capturing better returns. The company said the fund was available beginning today for individuals and institutional investors.
SyndicateRoom CEO Gonçalo de Vasconcelos is officially announcing the launch of Fund Twenty8 at the global asset managers and investors event, FundForum in Berlin today where he will speak about the future of fund management and how technology can be harnessed for investment decisions.
The SyndicateRoom Enterprise Investment Scheme (EIS) “tracker fund” is designed to bring traditional fund management strategies to the crowdfunding industry. Management states the fund will hold at least 28 different investments across multiple industry sectors.
According to SyndicateRoom, Fund Twenty8 was named based on industry research into early stage investment performance. Research from Nesta indicates that business angels and VC investors can generate returns, on average, in excess of 20% IRR per annum with portfolio diversification. Additional research suggests a minimum portfolio size should hold at least 28 companies. The company explains that traditional EIS funds only invest in between 5 and 10 investments per fund and usually focus on a single sector. With Fund Twenty8, investors get a broader range of diversification.
“Now we’re catering to the passive investors who prefer a portfolio approach to investing but don’t want to pay the hefty management fees that usually come with it,” said Sore. “This new product offers a diversified portfolio for our investor community, while providing an even stronger route for companies to seek growth capital.”
de Vasconcelos described the fund as creating a fair and transparent opportunity for high growth investments.
SyndicateRoom has always been an investor led platform where each deal includes a professional investor with smaller investors given the chance to participate alongside. Fund Twenty8 investments are sourced, structured and invested in by business angels, VCs and other lead investors. The fund will then track and match the activity of SyndicateRoom members, who are sophisticated investors, staking their own capital, to define how much capital is allocated into each investment. SyndicateRoom explains this is done on a pound for pound basis until the company’s funding target is met. If an investment is oversubscribed and goes into overfunding, the fund then invests more, securing a larger weighting.
- Income tax relief offered at 30% on up to £1 million per tax year
- No capital gains tax on disposal of shares after 3 years
- Deferral of other capital gains up to the amount re-invested
- Combined income tax and loss reliefs of up to 61.5%
- 100% inheritance tax relief available if held for 2 years
“We’re harnessing technology to achieve a unique way to deploy capital alongside business angels and VCs – the more interest from investors, the more the fund deploys,” said de Vasconcelos.