“Increasing interest rates means that the EIIS scheme is even more attractive this year”, Sinéad Heaney, Partner, said.
“EIIS is a great way to support indigenous businesses and claim a tax relief at the same time. The investor can claim the full 40% tax benefit in the first year. Previously, the benefit was split across the first and fourth years. Relief can be claimed against income earned in the year of the qualifying investment.”
BES Management DAC, the manager of the Davy EIIS funds, is a joint venture between BDO and Davy. It is Ireland’s longest-running and most experienced BES/EIIS fund manager. “We have successfully raised and invested over €215 million in BES and EIIS funding over the past 25 years,” she said.
“As an investor, we align with our investee company management teams to support them to achieve their growth plans. Our teams are very experienced, with commercial and financial expertise. We bring this experience and market knowledge to assist and accelerate the growth potential of our investees.”
Examples of investments completed by the Davy EIIS funds, include Nutritics, the Happy Pear, Gym + Coffee, Horizon Offsite and Evercam.
“Essentially we go to market once a year,” she said. “With EIIS, individuals can invest directly in a company, or they can go to a fund like the Davy EIIS fund. The aim of the fund is to diversify the portfolio across a number of sectors to reduce risk. When an individual comes to us, we take their investment capital and invest it across a range of different companies, spreading the risk across businesses at different stages of development.”
“BES Management has significant experience in relation to the EIIS legislation and a very experienced investment board which assesses the companies we invest in. We are the longest-running EII scheme fund on the market, and we have seen the kinds of businesses that have done well and are delivering jobs and growth.”
“This year, we are targeting businesses that have strong management teams and strong market opportunities across all sectors throughout all counties of Ireland. Our EIIS funding has a fixed cost and is non-dilutive so existing owners retain control of their business – both of which are hugely attractive to shareholders.”
For three decades, the EIIS, has provided a vital source of alternative funding for businesses in Ireland.
“Self-certification by investee companies was introduced in 2019,” Heaney said. The move to self-certification was widely welcomed, as it significantly shortened the period between an investor making an investment in a company and being able to claim tax relief.
“However, there was and continues to be some nervousness in the market in relation to self-certification. Investors and investees see the benefit of dealing with an experienced fund manager as the legislation is renowned for its complexity.”
BES Management is seeking to raise a fund of up to €10 million this year,” Sinéad said. “This is based on the appetite we are seeing in the market. There are lots of opportunities around and that is hugely positive.”
“We are well established in the market and we are seeing very strong demand from indigenous Irish businesses,” she said. “It is great to see this support from the government in recognising the benefits that the scheme is delivering to indigenous business.”
“We are giving investors an opportunity to invest in indigenous Irish companies and avail of the experience of a professional managerial team who have a huge amount of experience working with investees in the Irish market,” she said.
If you would like more information on the Davy EIIS funds and are interested in being a part of our 2022 fund, visit our website at bes.ie.
Content adapted from the Business Post.