MMC Ventures is launching an enterprise investment scheme fund for younger investors.
From 22 March, any 18 to 35 year old who has GBP2,500 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 (pictured), investment manager at MMC, says: “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 GBP25,000 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 per cent of capital invested at a 40 per cent tax rate, falling to only 40 per cent at a 50 per cent tax rate.”
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 1 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 GBP500,000 and GBP2m 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 GBP5m in any single business.