Managing Tax Efficient Businesses Simply is Key
- On February 20, 2018
- By GrowthInvest Admin
Daniel Rodwell, managing director at GrowthInvest, explains why more support and education is needed in order to help advisers make better use of opportunities in the tax efficient universe
Q: How long have you been involved with the tax efficient investments?
I was a founding investor in GrowthInvest, then named Seed EIS Platform, back in 2012. I had been working in the equity derivatives market for 16 years prior to that, initially trading institutional capital then managing trading businesses. I began investing in early stage EIS companies around 2005.
Q: What attracted you to work in this space, and to build the GrowthInvest Platform?
I believe that investment in young companies, alongside the tax reliefs available, represents a realistic portfolio choice for suitable investors seeking portfolio growth. I also feel there is the potential for significant growth in the market, alongside the scope for technology to improve the efficiency and transparency of the market as a whole. I have direct experience of this having transitioned a previous business from open ’outcry’ floor-based trading to the highly-efficient screen-based trading that exists today.
GrowthInvest was originally founded by a wealth manager and the platform was designed for advisers. We believe the tax efficient arena is one where advisers can add real value to client portfolios and that more advisers should be using these products. For that to happen we needed to provide support, education and an environment where advisers can manage their tax efficient business in a simple and familiar way and therefore provide the best level of service to their clients.
We think of GrowthInvest as a centralised hub where advisers can do everything they require
Q: What are the three best features of your platform for advisers?
Investment Universe: In a world where diversification is increasingly important, we provide advisers a single environment to research, compare and then invest into an ever-increasing universe of tax efficient products on behalf of their clients.
Asset Consolidation: Advisers are able to register and consolidate historic investments. This enables them to provide accurate and comprehensive portfolio management and reporting across the entire tax efficient sector. It also removes the need to contact multiple providers for updates, valuations and HMRC documentation, as well as providing greater transparency on the underlying investments
Integration: We think of GrowthInvest as a centralised hub where advisers can do everything they require. As such, we provide simple integrations and links to third party analysts, Companies House, HMRC and adviser back office solutions.
Q: What does the GrowthInvest Portfolio Service offer advisers and their clients?
The Portfolio offers advisers and investors diversified access to the very best companies that have listed on our platform. We review hundreds of applications per annum, only list around 30-40 on the platform and invest in only 5-10 per vintage.
We specialise in companies that have a small amount of revenue but are not quite large enough to be of interest to the Venture Capital world. Within this ‘Seed’ stage investment we feel there is the ability to deliver large returns by working closely with portfolio companies. Alongside this we have strong relationships with later stage investors, with whom we always work to curate an exit opportunity where possible.
The portfolio will only consist of companies that we have conducted significant due diligence on, and that we know we have people within our network that can help them to succeed.
Q: What is the targeted return?
The target return on the blended SEIS/EIS portfolio is £2 for every £1 invested, net of all fees. We intend to achieve this outcome over an average of five years.
This article features in the latest tax efficient supplement, Spotlight: Tax Efficient Investing, available by clicking here.
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