Oxford closes HMRC-approved EIS fund

02 April 2009

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Fund

Oxford Capital has closed its latest Enterprise Investment Scheme (EIS) fund, Oxford Gateway Approved EIS Fund No 5. Because of its approved status, which is granted by HM Revenue and Customs in advance, the fund's backers can benefit from tax relief in the year they subscribe to the fund. Furthermore, the fund offers income tax relief, capital gains tax deferral, CGT exemption (which allows tax growth) and 100% inheritance tax relief. At the time of going to press, Oxford Capital expected to raise between £3m-4m until the closing date 3 April 2009. The fund has a life span of seven years, while the average life of the capital invested by Oxford Capital is 4.5 years. Daniel Tunkel of SJ Berwin provided legal advice to the fund.

Investors

The fund has mostly private investors, who are predominantly UK taxpayers and are therefore attracted to the model. Minimum subscriptions to Oxford Gateway Approved EIS Fund No 5 are set at £25,000 with a maximum commitment of £2m. The fund has an initial fee of 5%. The annual management fee amounts to 2.5% and the performance fee is 20%. In order to obtain all tax advantages, a holding period of at least three years is required. Oxford Capital will also contribute to the fund.

Investments

The fund will invest in development stage companies in the healthcare, sustainability and communications sectors in the UK. It will also consider special situations investments. In total, Oxford Capital plans to make between six and nine investments and will invest alongside other venture capitalists to reach an accumulated controlling majority. The fund's minimum investment is set at £250,000, the maximum at £1m. The "approved" status is granted by the HM Revenue and Customs and requires the fund to invest 90% of the subscribed capital within the 12 months. Meanwhile, the "unapproved" EIS funds must be fully invested after 18 months, and provide income tax relief as each portfolio investment is made.

People

David Mott is the head manager of the fund at Oxford Capital.

Name: Oxford Gateway Approved EIS Fund No 5

Target: £3-4m

Focus: Expansion, special situations

Address: Oxford Capital

201 Cumnor Hill

Oxford, OX2 9PJ

United Kingdom

Advisers: SJ Berwin (Legal).