MMC has launched a second Growth Generation Fund – the only EIS venture capital fund targeted specifically at young investors. MMC’s first fund, raised in 2010, is now filly invested.
The new fund is aimed at investors aged 18-35 with GBP2,500 to GBP10,000 to invest. Investors in the Growth Generation Fund benefit from EIS tax relief and a portfolio of high growth UK companies.
Rory Stirling (pictured), investment director at MMC, says: “We believe this generation plays a vital role in growth, innovation and the wider economic recovery effort in the UK. Venture capital investing has typically only been accessible to high net worth individuals. Our first fund proved that younger investors want access to venture capital as an asset class and the opportunity to build long term capital gains. Our investors benefit from direct ownership of high growth companies, EIS tax benefits, and the opportunity to learn about venture capital investing.”
Stirling says: “We’re very keen to include young people in what we do. We hosted several events last year, which proved to be a great networking opportunity for an exceptional group of bright and talented young professionals. This is something that MMC plans to continue in the future.”
Following the successful investment of the first fund MMC expects a number of existing investors to re-subscribe in Fund II as it provides an opportunity to create an even more diversified EIS portfolio.
Clare Johnston, CEO and founder of The Up Group, an executive search and networking firm for leading global digital and technology talent, is an investor in MMC’s Growth Generation Fund.
Clare Johnston says: “MMC’s Growth Generation Fund has provided me with an innovative, low cost and tax efficient way to diversify my assets and to potentially generate higher than average returns. Against the backdrop of the wider financial crisis, young professionals are increasingly looking to safeguard their financial futures. It is really encouraging that MMC have been able to open up the venture capital market to the next generation of investors and the entrepreneurial leaders of the future. Personally I have enjoyed meeting other likeminded investors as part of the Growth Generation networking events.”
MMC invests in businesses that operate in high growth sectors; the first Growth Generation Fund was invested in consumer internet (AlexandAlexa and LoveHomeSwap), digital media (Base79) and healthcare (The Practice). MMC expects the second fund to have similar growth sector exposure.
EIS tax reliefs mean that profits on each investment are tax free and an investors’ after-tax risk exposure is sharply reduced. The most an investor risks is GBP42 for every GBP100 invested (reduced to GBP35 for investors in the top tax bracket).
Alongside other MMC funds, the Growth Generation Fund II will invest in at least four companies, within 12 to 18 months to create a portfolio of EIS qualifying companies. MMC initially invests between GBP500,000 and GBP2 million of capital in fast growing UK businesses that have already demonstrated market acceptance of their proposition.
MMC has a strong track record and was named ‘EIS Fund Manager of the Year’ by the EISA in 2009. All investments are made on their commercial merits whilst retaining substantial tax advantages for UK tax-resident investors under the EIS Scheme. MMC currently has GBP80 million under management and aims to invest GBP8 -10 million each year in a range of new deals and follow-on funding.
