The latest in investments and funds activity from across Europe.

Vala Captial
Following the launch of its first enterprise investment scheme (EIS) portfolio last year, Vala Capital has opened a new EIS tranche for investors. Investments will carry no upfront charges or ongoing fees and money raised will be put to use by the 6 April 2020 tax deadline. The venture capital group founded by serial entrepreneur Jasper Smith in 2016, said that completing investments into companies before 6 April 2020 is critical to investors so that clients can use the 30 per cent EIS income tax relief in the 2019/20 tax year or carry it back to tax paid for the 2018/19 tax year.

The team is targeting a 100 per cent return over five to seven years, investing in six to 10 companies across sectors including engineering, lifestyle and fintech. These include the marine engineering firm, Cetus, travel group Pelorus and software services provider to IFAs Centology, the firm said. A typical portfolio investment is £500,000 to £1 million and the group has invested around £6 million so far, it said.

VCTs (venture capital trusts) and EIS schemes have been around for years but both have picked up steam in recent years as a gateway to more private equity style opportunities in unlisted companies. This guest feature from an industry specialist published last month makes the case for why EIS investing has the edge.

EIS portfolios generally work on performance. In Vala's case, investors don’t pay any fees unless profits are realised, and the venture firm collects a 20 per cent fee on a profitable exit. EIS shares have to be held for three years to obtain full tax benefits. However, most EIS-qualifying companies are unlisted, therefore, in liquidity terms, "even when minimum holding period has been reached investors are typically waiting for an exit ‘event’ of some sort before they receive any proceeds from a disposal of the shares," Vala indicated in a follow up.

It said that the new tranche aims to raise between £7 million and £10 million, with a minimum £25,000 investment. Last year, the venture firm’s EIS portfolio invested in 10 companies, including yacht designer Arksen, bakery Great British Biscotti Co and specialist video game maker PlayWorks.