The UK’s first dedicated enterprise investment scheme (EIS) platform is being launched with the backing of two industry veterans.
Kuber Ventures is being run by John Williams, who was previously a director at Credit Suisse, worked for Barclays Wealth as a director of advisory and financial solutions, and also spent seven years as an executive director of wealth planning at UBS.
He is joined by former UBS Wealth Management director Dermot Campbell, and the pair have signed up well-established EIS fund managers, including Guinness Asset Management, Rockpool and MMC Venutres to the platform. The architect behind the platform is Jeremy Spencer, who works as a wealth management solutions manager at Origen Financial Services.
Kuber said the platform is based on the same principles as a traditional platform, except it was targeting sophisticated, rather than retail, investors.
Users will benefit from one application form for investing in a variety of EIS portfolios, consolidated reporting and all EIS schemes offered have been reviewed by due diligence manager Allenbridge.
Wealth Manager recently revealed the FSA is to include a vast swathe of EIS and venture capital trusts in its upcoming finalised guidance on unregulated collective investment schemes (Ucis).
In internal correspondence seen by Wealth Manager, the proposals currently mooted are that EIS structured as collective investment schemes (CIS) will be included in the rules and their sales restricted. But Rockpool's Matt Taylor said he did not expect many EIS providers to structure their products as CIS, and as such these would be outside the FSA's proposed rules.
'The whole essence of EIS is that the investor has to be a direct holder of shares in a company and an EIS fund has never existed,' he argued. 'We should talk about EIS portfolios not EIS funds.'
While many perceive EIS investing to be inherently risky, Campbell argued there are decent rewards to be had for those able to pick the best investments and spread their cash around.
'EIS is a double game. You need to work with skilled managers that are good at picking companies that are likely to be successful, and you need to diversify,' Campbell said.
'You need a range of managers so if you invest in all six of our managers you will probably end up with 50 positions. Some of them will do very well, and you will end up 20-30% up on your money, and then another 20% of them will fail. That is how it is.'
He said he expected the service to be particularly interesting to private banks, many of which do not invest in EIS at all, but would be glad to have one platform which offered a range.
The platform has a minimum single lump sum investment of £20,000 or a monthly contribution of £500 although the sum must accrue to £2,000 before it will be invested in EIS shares.
Charges have been set at a 1.5% initial charge, a 0.5% annual management charge alongside a £5 administrator charge and £16.66 charge for each regular contribution. Performance fees are set individually by the underlying managers.