Guinness launches AIM-investing EIS

Guinness Asset Management has launched an alternative investment market-listed (AIM) enterprise investment scheme (EIS) which will invest in AIM companies.

An EIS is designed to encourage investments in small, unquoted companies carrying on a qualifying trade in the UK.

The Guinness AIM EIS 2014 will be managed by lead fund manager Andrew Martin Smith, and assisted by Shane Gallwey and Hugo Vaux. The managers will be supported by an investment committee including Tim Guinness, Edward Guinness and chairman of the EIS Association, Lord Flight.

The target fund size is £5 million and the minimum individual investment is £10,000. The expected life of the fund is four years.

The EIS model offers attractive tax relief. An investor can claim relief at 30% on investments of up to £1,000,000 per tax year, as long as shares are held over three years.

The EIS is targeting capital growth by making investments in AIM-listed companies that qualify for EIS reliefs. Recent changes in 2012 will allow larger companies to benefit from EIS tax reliefs. The changes include increasing the maximum number of employees from 50 to 250 and the maximum gross assets from £8 million to £16 million following an investment.

Martin Smith, said: "The changes in EIS legislation allowing us to invest in a larger range of companies, coupled with the increased new issuance from AIM-listed companies, has made this an attractive area of investment for us and gives investors the opportunity to gain exposure to companies at interesting stages of development

Innovative Fee Structure

Guinness Asset Management says it plans to defer all its fees until they can be paid from the proceeds of investments.

This is different from traditional fee structures for EIS offerings and allows the investment manager to invest up to 100% of an investor's subscription in EIS qualifying companies.

Investors may claim EIS tax reliefs on the sums invested, so this structure helps maximize this amount for investors.

Why AIM?

The group believes AIM listed companies have an additional attraction to EIS investors, in that there is liquidity in the shares by virtue of their listing, enabling investors to exit more readily after the EIS three year holding period.

Guinness aims to deliver returns in excess of £1.30 to investors (£1.60 including £0.30 EIS Income Tax Relief) net of all fees per £1.00 invested.