Investors have an opportunity to invest in a tax-efficient way and to help independent UK screen content companies looking to grow.
An Enterprise Investment Scheme (EIS) fund focused on the creative industries has been launched. Calculus Capital, the VCT and EIS investment manager and media advisory company and consultancy Stargrove Pictures (backers of films such as The Best Exotic Marigold Hotel and programmes such as Call the Midwife) have launched the UK Creative Content EIS fund in association with the British Film Institute (BFI) to help deliver vital funding for the UK's most promising screen content companies.
The recommendation for the UK Creative Content EIS fund came out of last year's BFI Commission for UK Independent Film, chaired by Zygi Kamasa, chief executive officer of Lionsgate UK, the British subsidiary of American film company Lionsgate The Commission set out to explore how to help UK companies diversifying across film and high-end television meet the growing demand for premium content fuelled by well-funded subscription streaming services, such as Netflix and Amazon.
One of its key recommendations was the establishment of an EIS fund to encourage a new wave of investors into the sector and deliver vital equity finance to help independent, UK screen content companies scale up.
The UK Creative Content EIS Fund, which is looking to raise £20m in the first year alone, will be managed independently, but in association with the BFI. All investments will have received advance assurance from HMRC before Calculus engages capital. The Fund is targeting £2 return for every £1 invested, over a target four to the six-year investment horizon. This does not include the EIS tax benefits, which are in addition. It has a minimum investment of £10,000.
Amanda Nevill, chief executive officer of the BFI said: "Never before has the world been so hungry for stories, to be enjoyed on screens big and small. The UK is at the centre, the master storyteller, driving an industry that is amazingly worth almost £8 billion to the economy and growing. In the midst of this expansion, we are acutely aware of the need for investment so that film and other screen content companies can scale up. The BFI is excited about the opportunities this Fund will present for a new wave of investors to get involved with our magical industry alongside Calculus and Stargrove, who have a wealth of experience and knowledge."
HM Revenue & Customs (HMRC) provides insightful information on the number of companies raising funds, the number of subscriptions and the amounts raised through the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS).
Here are the key points extracted from the EIS and SEIS report that was published last month:
Enterprise Investment Scheme
· Since the Enterprise Investment Scheme (EIS) was launched in 1993-94, 29,770 companies have received investment and over £20 billion of funds have been raised.
· In 2017-18, 3,920 companies raised a total of £1,929 million of funds under the EIS scheme. This is an increase from 2016-17 when 3,655 companies raised £1,901 million.
· In 2017-18, a total of £759 million of investment was raised by the 1,710 companies raising funds under the EIS scheme for the first time.
· In 2017-18, companies from the Information and Communication sector accounted for £641 million of investment (33% of all EIS investment).
· London and the South East accounted for the largest proportion of investment with companies registered in these regions receiving £1,283 million (67% of all EIS investment) in 2017-18.
Seed Enterprise Investment Scheme
• Since the Seed Enterprise Investment Scheme (SEIS) was launched in 2012-13, 12,900 companies have received investment and over £1 billion of funds have been raised.
• In 2017-18, 2,320 companies raised a total of £189 million of funds under the SIES scheme. This compares with 2016-17 when 2,425 companies raised £187 million.
• Over 1,700 of the companies were raising funds under the SEIS scheme for the first time in 2017-18, representing £159 million of investment.
• In 2017-18, companies from the Information and Communication sector accounted for £69 million (37% of all SEIS investment).
• London and the South East accounted for the largest proportion of investment, with companies registered in these regions receiving £117 million (67% of SEIS investment) in 2017-18.
While companies have a period of several years after shares are issued to submit a compliance statement (the EIS1, SEIS1 and SITR1 forms), the majority of these returns are made within three years. Therefore, the figures in this release, and particularly for 2017-18, are likely to be revised in future due to applications that have not yet been received or advance assurance applications received in 2018-19 that require further processing.
The next release is planned to be in Spring 2020. HMRC Official and National Statistics can be found on the gov.uk website: https://www.gov.uk/government/organisations/hm-revenue-customs/about/statistics