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ARM Innovation Hub
8 January, 2021 - 16:47 By Tony Quested

Parkwalk launches groundbreaking DeepTech fund

Parkwalk Advisors has launched a novel fund to boost investment in DeepTech businesses spun out of UK universities such as Cambridge and the new vehicle packs extra punch thanks to some shrewd pre-planning.

It is one of the first HMRC Approved Knowledge Intensive EIS Funds to open to retail investors and comes with the bonus facility to carry back income tax relief to the previous tax year and reduced admin for investors. 

Launching in early January 2021, the fund will close at the end of the tax year in April.

Parkwalk has been the largest EIS fund in the market for the last couple of tax years, raising c.£50 million a year and this new Parkwalk EIS Knowledge Intensive Fund will co-invest alongside its multi-award winning Parkwalk Opportunities EIS Fund. 

The new vehicle will build on the company’s track record of investing in over 100 EIS qualifying companies and 10 years’ experience investing in the distinct asset class of UK university spinouts from the likes of Cambridge, Oxford, Bristol and Imperial University.

The Government recently changed the rules surrounding ‘approved Funds’ to align these funds with the UK’s modern industrial strategy and encourage more investment into R & D-led businesses.

As a result, HMRC will only approve investments where fund managers are prepared to and able to deploy capital into Knowledge Intensive qualifying EIS companies.

The initiative builds on a number of recent announcements to support and leverage the UK’s global position in R & D, including a commitment to increase research investment to £22 billion a year and create an enhanced R & D roadmap for the UK.

The benefit for investors in these ‘approved funds’, vs other EIS funds, is the known tax date from which they can claim income tax relief and reduced administration.

In most EIS funds currently in the market, investors can claim income tax relief when the funds are deployed into underlying portfolio companies which is unknown (normally over a 12-18 month period). 

However, in the new Knowledge Intensive EIS Funds, the relief is dated when the fund closes (with carry back options depending on individual circumstances).

In addition, investors in these new ‘approved funds’ will receive one EIS5 certificate vs 5-15 separate EIS3 certificates, depending on the fund.
Parkwalk has been the UK’s most active investor in companies commercialising world-changing technologies emerging from the UK’s leading universities and research institutions over the last few years. 

University spinouts are a unique asset class in early-stage and growth investing because they typically have years of R & D underpinning their technologies, with strong Intellectual Property protection.These types of companies are ideally suited for the new EIS Knowledge Intensive Fund.

Moray Wright, CEO of Parkwalk, said: “At a time of immense global change, we are pleased to be able to build on our recent success and offer this new Parkwalk EIS Knowledge Intensive Fund to investors.

“The fund will sit alongside our evergreen Parkwalk Opportunities EIS Fund, and follows the successful close early this year of our latest university specific EIS funds, the Imperial College Innovation Fund I and University of Cambridge Fund VII.

“The Parkwalk EIS Knowledge Intensive Fund takes advantage not only of the UK’s word leading position in R & D and our position as the most active investor into UK university spinouts, but also the Government’s support for this sector to allow a simpler EIS investment.”

Parkwalk is the largest growth EIS fund manager, backing world-changing technologies emerging from the UK’s leading universities and research institutions. 

With £330m of assets under management, it has invested in over 120 companies across its flagship Parkwalk Opportunities EIS Fund as well as the award-winning enterprise and innovation funds Parkwalk manages for the Universities of Cambridge, Oxford, Bristol and Imperial. 

Parkwalk invests in businesses creating solutions to real-world challenges, with IP-protected innovations, across a range of sectors including life sciences, AI, quantum computing, advanced materials, genomics, cleantech, future of mobility, MedTech and big data.

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