EIS fund manager MMC Ventures is among the first companies to allow investors to take advantage of HMRC’s revised approved fund EIS rules.
Via the new knowledge intensive EIS fund, MMC investors will be able to invest in the high-growth technology companies MMC is known for without the two most common pain points of EIS investing, timing uncertainty and administrative burden.
With most EIS funds currently in the market, investors can claim income tax relief when the funds are deployed into underlying companies. This can take anywhere between 12-24 months for full investment. However, with the new knowledge intensive EIS Funds, the relief is dated when the fund closes (with carry back options depending on individual circumstances). In the case of the MMC knowledge intensive fund, it will close on 1st April 2021. In addition, investors in these approved funds will receive one EIS5 certificate, rather than the typical 10–15 separate EIS3 certificates, depending on the fund.
HMRC has introduced these tax changes in response to an industry-wide consultation designed to provide more flexibility to investors in claiming relief and to align Approved funds with the UK’s Modern Industrial Strategy. Additionally, the changes aim to improve the supply of capital into ‘knowledge intensive’ companies – young and innovative businesses that invest heavily in research and development to bring their product or service to market.
MMC Ventures is well positioned to channel funds into these types of businesses, having backed UK technology startups and scaleups for more than 20 years. MMC is known for investing in companies transforming sectors in which the UK is a world leader such as fintech, healthcare and the circular economy. MMC is also known for its deep research into the technologies driving these transformative changes, most recently Artificial Intelligence (AI) and Blockchain.
Notable MMC EIS investments to date include Gousto, which announced its most recent funding round in November valuing the business at more than USD1 billion, Current Health, the remote patient monitoring platform that is collaborating with Mayo clinic to detect Covid-19, and Signal AI, the artificial intelligence-powered media monitoring and market intelligence platform that transforms the world’s information into accessible, actionable business knowledge.
Bruce Macfarlane, managing partner, MMC Ventures, explains: “MMC has always been committed to supporting innovation, both in the businesses we support and as a fund manager ourselves. The launch of this new product reflects that commitment as we strive to solve the most common challenges for our investors. But fundamentally this is not just about a new investment structure, it’s about encouraging more investors to support innovation, which in turn increases productivity, creates jobs, and boosts growth for UK PLC.”
In another first for this industry, MMC Ventures recently became the first EIS fund manager to be recognised as a B Corp, an accreditation for businesses that meets high standards of verified social and environmental performance and public transparency, with legal accountability to balance profit and purpose.