A discerning investment
It is extremely time consuming and often impractical to build a private equity portfolio; however, by joining the Club the hard work will be done for you. Our team has a proven approach to selecting high quality, unquoted investments.
The approach is meticulous yet simple – whilst we look at a range of investment opportunities, we will only select stable, SME businesses with strong, ambitious Management Teams that are most likely to deliver a good return for investors. In this vein, we introduce our Members to existing, profitable and cash generative companies and occasionally start-ups if they pose an interesting and low risk investment. These companies typically seek investment of between £0.5m and £3m across a range of transaction structures to achieve sound growth targets. Only opportunities which present a solid business model, in sectors we truly believe in, make the cut.
Unlike other private equity providers in the Small Companies sector, we don’t invest in property, funds of funds, or exclusively in start-ups. Each deal is sourced through our extensive network of brokers and industry contacts and, in the first instance, is completely exclusive to Club Members and their advisors.
Chelverton leads the entire investment process, from researching and vetting every opportunity, to managing the investment and the eventual exit of investors. The decision to invest in any company we present is entirely at the investor’s own discretion, based on the particular sectors they wish to focus on. In this way, Club Members build a self-selected portfolio of investments in established, growing UK SMEs.
All Club investments are targeted to achieve annual pre-tax returns of 20% – 25% plus and structured to use tax efficient schemes, where possible. Mechanisms for tax efficiency include the Enterprise Investment Scheme (EIS) and Business Property Relief, which offer the following benefits:
- An Income Tax refund of 30% of the amount invested against Income Tax liabilities.
- Capital Gains which are free from tax.
- The removal of the investment from the investor’s estate and 40% Inheritance Tax Relief (IHT) after a qualifying period.
Business Property relief comprises
- Exemption of equity investments which qualify for business property relief from 40% Inheritance Tax (IHT) after a qualifying period of two years.
The sources of funding for our target investee companies, with enterprise value of between £1m and £5m, have reduced significantly during the recession. This, we believe, provides excellent and highly competitive investment opportunities, which have long been overlooked by other private company equity providers. All our investors have a medium-term focus and commit to each investment for a minimum of three to five years, based on an entry level investment of £25,000.
Who is the Club for?
We have developed the Club exclusively for high net worth and sophisticated investors, with the ability to reduce systematic risk through investing in a broad portfolio.
Together, our Members share an active interest in the UK Small Companies sector and have strong commercial acumen. These investors are looking for a more involved investment, where they can meet investee companies and network with fellow investors.