MMC Launches Growth Generation Fund
MMC Ventures (MMC) has set out its stall as the only EIS fund to open its doors to younger investors. From Monday 22 March 2010, any 18 to 35 year old who has £2,500 or more can invest in venture capital as an asset class, through the MMC Growth Generation Fund. To encourage investment MMC has waived its usual management fee and subscription cost. The Fund, which benefits from EIS tax relief, provides priority access to invest in MMC’s pool of fast growing UK companies.
Rory Stirling, investment manager at MMC comments: “We felt that there was a gap in the market for a fund that encourages the younger generation to look at investing for their future. Venture capital has typically only been open to high net worth individuals with over £25,000 to invest. The younger generation is a vital source of deal flow for us; a pool of talent available to fill gaps in the management teams of our portfolio companies; and it provides prime strategic input into emerging trends in the new economy. Now is a good time to have the opportunity to access such an exciting asset class. Funds invested during previous downturns have produced above average returns for investors. Furthermore our EIS tax reliefs mean that the most an investor risks is 48% of capital invested at a 40% tax rate, falling to only 40% at a 50% tax rate.”
“We’re looking to fund businesses that operate in high growth sectors and where MMC’s involvement will accelerate growth, providing significant returns to our investors. This is a unique proposition designed for the entrepreneurial leaders of the future and we are confident that savvy investors will put their money into our Growth Generation Fund.”
The Growth Generation Fund is structured as an unapproved EIS fund. The Fund comprises a pool of money managed by MMC on a discretionary basis. The Fund will be closed to new subscriptions as of 1st July 2010 and MMC will invest the fund in at least four companies, within 12 to 18 months, to create a portfolio of EIS-eligible companies. These investments include both new deals and follow-on funding rounds for existing investee companies.
MMC initially invests between £500,000 and £2 million of capital in fast growing UK businesses that have already demonstrated market acceptance of their proposition. MMC supports investee businesses through follow-on funding as they grow and achieve forecasts; typically investing up to £5 million in any single business. Founded in 2000 by Bruce Macfarlane, Alan Morgan and Alan Cockell, the business has grown to a team of 9 professionals, who have carried out 21 deals since the company was founded and made a number of profitable exits.
MMC has a strong track record and was named “EIS Fund Manager of the Year” by the EISA in 2009. All investments are made on strict commercial merits whilst retaining substantial tax advantages for UK tax-resident investors under the EIS Scheme. MMC currently has £70 million under management – through a combination of managed funds and a syndicate of experienced private investors – and aims to invest £8 -10 million each year in a range of new deals and follow-on funding.