Braveheart fund seeks to ease taxing issues of investing

BRAVEHEART has launched a fund to pump money into technology firms without investors attracting large amounts of tax.

The Perth-based investment house yesterday unveiled its Beta Enterprise Investment Scheme (EIS) fund – approved by HM Revenue & Customs – which will invest in companies from within its existing portfolio of 48 firms as well as making new investments.

Personal investors can put between 10,000 and 500,000 into the fund, which the company believes can make "significant capital gains" over the next five years.

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Braveheart expects the fund to invest in at least ten firms within a year of it closing on 31 March.

Chief executive Geoffrey Thomson said: "With the 50 per cent rate of tax looming, EIS has now come of age and is an asset class in its own right.

"The advantage of EIS is that investors can back high-risk, high-reward companies in a tax efficient way. If the investment fails, the investor can set the loss against tax. On the other hand, if the investment comes good, the investor can realise the gain without, in most cases, paying tax on the profit."

The Beta EIS fund is the successor to Braveheart's Alpha fund, which invested in very early-stage university spin-outs.

Thomson said the Beta fund would invest in firms at different stages of development, spreading the risk wider.

He added: "We all require our money to work hard, but in EIS the investor is helping today's little businesses become tomorrow's large ones. That is important."

The 48 firms in Braveheart's portfolio include Livingston-based website filtering firm Bloxx, Edinburgh University spin-out Pufferfish, which makes inflatable spherical displays, and medical device outfit Tayside Flow Technologies, into which Sir Tom Farmer has also invested.

As of 31 March, 2009, Braveheart said its portfolio had delivered an internal rate of return of 33 per cent, with its exit from 19 firms including six that listed on stock markets, three through trade sales or secondary purchases and ten that were written off.

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