Insight – Custody

Observations from a blockchain PoC research project in Private Equity Fund Administration

Earlier this year Mainspring undertook a 3-month proof-of-concept (PoC) to get hands-on with our research of blockchain technologies. As a Fund Administrator, Mainspring holds the books of record for a client’s fund, independent of the fund’s investment manager, undertaking the accounting and reporting of the fund’s performance.  In addition, Mainspring provides administration services for operating the fund which are largely event driven and typically follow a defined workflow process, such as: making a new investee company investment; effecting a drawdown of

Private Equity LP Fund with HNW Co-Invest UK feeder

If you are considering creating a UK feeder fund for individuals to co-invest alongside the main fund, this may be a cost effective, simple solution. Mainspring has an award-winning nominee and custody platform which can be branded and structured as a discretionary or fully managed mandate.  Whether the main fund is domiciled in the UK, Jersey, Guernsey, Luxembourg or Cayman this dedicated feeder can be a co-investor for investors from any country into any primary asset. Use this dedicated FCA regulated UK

Improving your EIS fund operations with Mainspring Fund Services

EIS finished 2017 on a high after it received a ringing endorsement in the Chancellor’s budget by upping the limit of investment for knowledge intensive companies. While funds focused on capital preservation will now find it much harder to get clearance, the view from the IFA community was that despite a potentially enhanced risk to investors money, the overall demand for EIS investments will increase among their clients. To meet this growing demand, and in light of the increased attention

When starting your EIS fund, the role of custodian and nominee?

The legal structure of an EIS fund is such that the ‘fund’ isn’t in fact a legal entity but a figurative or marketing term used for the portfolio of investments structure seen in EIS. In order to qualify for EIS tax relief an investor must possess ownership of the shares in the company in which it invests, investment cannot be pooled (via a separate legal entity such as a fund) with other investors. The ‘fund’ is typically structured with: (i) a

EIS: increased investor limits for knowledge

Knowledge-intensive companies have received a boost in the Autumn Budget – annual investor limits have increased up to £2 million provided that £1 million is directed into these companies. This is in addition to the existing extended limits for investee businesses that are knowledge-intensive, that include being able to raise a total qualifying investment of £20 million rather than the normal limit of £12 million and the employee workforce being up to 500 rather than 250. In light of these enhancements

EIS & SEIS Under The Bonnet

We are very pleased to have worked with the EISA as one of the sponsors and contributors for their most recent guide ‘EIS: under the bonnet’. This is the second in a series of EIS guides designed to enlighten investors and companies seeking investment on how the structure of EIS works. The first issue was aimed at companies, explaining how EIS could be used to grow a business. This second issue looks at the mechanics of an EIS fund and

When am I ready to launch my EIS fund? Raising Capital

PART 4: RAISING CAPITAL With the legals in place for your new “fund”; the relevant permissions (directly or through an umbrella); and the right service providers, it’s time to raise capital. That’s the topic for this article. If you are already experienced at fundraising you may have all of the skills and contacts you need to successfully raise capital for your fund. If not, you may want to buy in some expertise and resources. You will find that most introducers (often termed “promoters”

Some practical advice on steps to take before engaging advisers

PART 3: WHO TO CALL? Last time, we looked at some of the technical details that require thorough investigation prior to launching a fund and also touched on the crucial area of agreeing a suitable cost base, setting the fees and the amount to raise to supply the required working capital for the team. You have confirmed where you will invest, how you will source deals and who might invest in the fund, as well as identified the fund size and fee

Some practical advice on steps to take before engaging advisers

PART 2: THE DEVIL IN THE DETAILS Last time we looked at a few aspects that someone looking to launch a fund should have in place with a high degree of conviction, prior to launch: 1. You have a clear understanding of the focus sector and focus geographies 2. You can pinpoint companies that qualify for EIS 3. You can source a pipeline of relevant, attractive companies 4. You have a viable target list of potential investors for the fund. So, you know you want to

Some practical advice on steps to take before engaging advisers

PART 1: FIRST STEPS Firstly it’s important to note that an EIS fund is not actually a “fund” in the sense that there is no separate legal entity which constitutes the “Fund”. Instead it’s a collection of individual managed accounts – one for each investor. From an FCA regulatory perspective, it can indeed be regarded as a fund (an AIF), but we will look at this in more detail in a later article. For this first article in the series it