The vehicle is called Parkwalk UK Technology Fund III. Investors obtain 30 per cent up front income tax relief and unlimited capital gains tax referral.  Profits are free from CGT after three years. For higher rate tax payers, any losses are capped at 35 pence in the pound.  The fund’s minimum investment is £25,000 ($39,223) and it levies an initial fee of 5 per cent then a management fee of 1 per cent, which is charged only upon a liquidity event or exit. The performance fee is 20 per cent.

The EIS investment model has been boosted in recent years by more generous investment limits, making them more attractive to clients such as family offices, as described in an interview in this publication by a firm operating in this space. Unlike some tax-mitigation vehicles, the EIS structure, created in the early 1990s, has gained, rather than lost, some of its tax benefits despite the changes in government.

“Universities in the UK benefit from a £4.2 billion annual, publicly-funded R&D budget.  The technologies developed as a result are global products, with their value more often denominated in US dollars than sterling, and so returns from Parkwalk’s EIS funds are not dependent on the UK economy,” said Moray Wright, partner and director of fund management at Parkwalk Advisors.

The firm has also offered the Twenty12 EIS fund, which pursues an identical investment strategy to the Parkwalk UK Technology Fund III but has been structured for wealth managers and financial advisors, the firm said.