Venture Capital Trusts (VCTs) and Enterprise Investment Schemes (EISs) are viewed as a solution for sophisticated investors with relevant experience and an appetite for risk.Since they became available in the 1990s to encourage investment into small, ambitious companies, investors have committed around £18 billion into these two schemes.
Growth potential
Following the introduction of further pension limit restrictions over the last two years, there has been a surge in appetite for such schemes as investors hunt for the most tax-efficient investment option available for their capital. With pension limits being reached, and ISA’s full, VCT and EIS investments are often seen as the next in line to receive investment allocation.
Investors are increasingly seeking other ways to diversify their portfolios as they navigate challenging markets and macro conditions. The longer term nature of VCTs and EIS investments can be used to offset the increasingly volatile and shorter term nature of capital markets.
Risks
No investment is without its risks and by their nature, VCTs and EIS companies are at the riskier end of the investment spectrum. They provide the opportunity to invest in small and often very early stage, privately held businesses which can be hard to value and sell. It’s also important to note that as demand grows for these types of investments, there is a risk that the supply will not. This in turn may mean that the better quality products are likely to go quickly, pushing a large number of investors into higher risk products without their being aware of it.
So, how do we mitigate these potential risks in order to maximise the growth potential of such schemes?
The key is having access to quality information and advice. In recent years, ongoing financial uncertainty, increasingly sophisticated technology, and greater access to information have resulted in greater demand for direct, online investments. This has fragmented the traditional relationship between fund managers, private investors and their financial advisors, and in turn exposed private investors to higher levels of risk.
This change has generated a need for a new way of investing which restores the balance for all stake holders.
About us
CoInvestor has established a platform which helps to mitigate investment risk by letting qualifying private investors co-invest alongside experienced fund managers. The CoInvestor platform has been designed to offer easy access and transparency of investment opportunities to all stakeholders, demystifying a traditionally complex investment process.
Private investors have access to a premium list of trusted and credible fund managers, allowing them to hand pick their investment portfolio from a range of pre-vetted investment opportunities. Following the investment, the investor continues to benefit from ongoing management of the transaction. In short, CoInvestor gives investors the opportunity to invest directly in alternative assets while benefitting from, and mitigating risk through, access to professionals who take on the role of investment manager.
Investments shown on CoInvestor put your capital at risk. The investments listed are in unlisted companies which are likely to be harder to value and sell than quoted shares. Investors may not get back the full amount invested.