How high-risk is EII investing?

Sinéad Heaney, Partner in charge of the BDO Corporate Investment & Business Advisory department in BDO contributed to the Sunday Independent piece on How high-risk is EII investing? Read Sinéad's full extract below: 

Investing in EII Funds 

BES Management DAC, a joint venture company between BDO and Davy Stockbrokers, manages the Davy EIIS Funds, and is the country’s longest-running EIIS fund manager. It has raised and invested more than €215m in BES and EIIS funding over the past 25 years, investing in more than 150 companies, including The Happy Pear and Gym+Coffee. 

“We are part of the rising tide of funds out there,” says Sinéad Heaney, a partner at BDO Dublin and the director of BES Management. “When you are an individual investing in shares in private companies and there isn’t an open market for those shares, that’s what puts them into the high-risk category. Because of that, it makes sense to deal with a professional fund manager and it does de-risk it somewhat.”

BES Management raised €10m in funds in December and is currently carrying out due diligence on companies seeking EII funding. The minimum you can put into the fund is €5,000, though the average investment level is €40,000 to €50,000, Heaney says.

“A lot of the investment above €50,000 would come from Davy private clients who have a high net worth and are spreading risk throughout their portfolios,” she says. “But there are a number of PAYE people who get in at the €5,000 level because they want the tax break.”

While BES Management doesn’t publicly reveal the performance of its funds, Heaney says “70pc of our investors are repeat investors every year”.

Content adapted from The Sunday Independent.

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