Strategy: Exposure to a portfolio of technology companies that have a social impact core to their strategy.
Issues
Track record: Although BGV has invested in 127 companies, there have only been a couple of successful exits to date.
The Investment Manager
Positives
Team: The team is experienced, having been managing social impact investments since 2012.
Issues
Team size: The team is small, and this may act as a slight constraint, although the use of an external mentoring team mitigates this.
Nuts & bolts
Duration: The Fund will close on 3 April 2020. Bethnal Green Ventures (BGV) guides that exits will take seven to ten years.
Diversification: The manager aims to provide more than 20 investments with a minimum of 10. These will be spread across different stages of company progress and sectors.
Valuation: Usually changes at next financing or on write-down.
Specific issues
Fees: Simple fee structure with investors paying an upfront fee and no annual charges.
Performance fee: Charged at 20% on aggregate returns over 110% of subscription.
Risks
Target returns: The target return of £2 for each £1 invested suggests a high-risk investment strategy.
Companies: Supplying risk capital to early-stage technology companies. There will be a spread of company returns as the successful ones will do very well, but those who fail may do so completely.
