Lacomp British Enterprise EIS Fund 12

We had originally planned to launch this Fund on 6th October, however with the extreme market turmoil at the time we thought it best to delay while both investors and advisers were concentrating on the daily news as the financial drama unfolded.

Fund 12 is now open, and while we still hope to close it on 19th December as intended, there is a proviso that we may extend the closing Date to 5th April 2009 so as to optimise the amount of money raised.

Who knows how investors will behave following the recent credit crunch and banking crisis?  After all, investor confidence has largely disappeared and been replaced with outright fear.  Who knows whether people might be more risk averse than normal, and are EIS investments, by their very nature, not considered to be higher risk?

But are they? Given the recent meltdown in the value of quality shares, one might argue that the perception of risk has to be revisited and fundamentally re-evaluated.  Few asset classes escaped the severe downward corrections, and even traditional "safe havens" have proved volatile.  Even gold has lost some of its lustre.

By contrast, most investments in EIS companies, companies typically at an early stage of their development, have not been similarly affected.

We have always pointed to the relative lack of correlation between the main stock market and EIS investments, and statistics issued by the British Venture Capital Association support that argument.  In fact, the valuations of the businesses Lacomp has previously chosen have hardly been affected by the general malaise in the market.

At Lacomp, we have always maintained that our British Enterprise EIS Funds first and foremost represent an exciting investment opportunity.

Some of our competitors design their EIS offerings solely to exploit the tax breaks associated with EIS investments, without even attempting to achieve an uplift in valuations.

We at Lacomp, on the other hand, believe in the capability of British entrepreneurs and continually look for investment opportunities that offer significant potential for capital growth.  The tax angles, of course, are a bonus, as we describe elsewhere on this site (Income Tax Relief; Inheritance Tax Relief; Capital Gains Tax Deferral Relief; Capital Gains Tax Exemption; Loss Relief).

Incidentally, people who have paid (or are due to pay) CGT on a gain that was crystallised in the last two years or so may well be tempted to reclaim the tax paid by rolling over the liability through the use of an EIS investment.  This would be particularly advantageous if they paid CGT at the then applicable 40% rate, since rolling over that tax would automatically bring them into today's 18% regime if, indeed, they will ever have to pay the tax.

A brochure and application form for the fund, in pdf format, are available here.