Longbow Capital, a UK-based venture investor, is to launch a tax-advantaged fund, investing in emerging healthcare, life science and wellbeing companies.

The Longbow Approved EIS Fund hopes to take advantage of investing in this asset class and sector, after valuations fell due to shortages of venture capital available, leading to what the firm believes are attractive growth opportunities.

The new fund will invest in a portfolio of six to eight companies within a 12-month period; it closes to new investments on 1 April 2010 and is aiming to raise £10 million ($15,7 million).

Longbow is a founding partner of the Wales-based Boots Centre for Innovation, which works closely with early-stage companies or inventors to develop new products for its stores.

“The relationship with Boots ensures that these products have access to a distribution network, meaning that investors will see the products rolled out across the UK and through international networks,” said Julian Hickman, a partner at Longbow Capital.

“The innovations coming out of the BCI offer investors the opportunity to invest in tangible products at the market-ready stage and be involved in the cutting edge of innovation in the UK,” he said.

Enterprise Investment Schemes (EIS) offer tax reliefs open to investors. Depending on the investor’s tax status, EIS can offer mitigation across several different brackets including income tax, inheritance tax and capital gains tax.

Longbow was established in 2004 and is owned by its investment partners and outside members. It manages three EIS Funds and the Longbow SIPP Venture Fund. Longbow has led on investments of over £35million into 12 unquoted life science companies.