3. Clifton Asset Management
Second largest provider of alternative
business funding in UK
1.
2.
3.
Funding Circle
Clifton
Market Invoice
£200m
£166m
£100m
4. Why am I here?
Pensions
=
=
Disruption - transformation
5. It all starts with an idea!
2004 - £100 billion
Use your own money to
grow your ideas and
business
Intellectual Property – an asset class that can
be held within pension
6. What is IP?
• Not just technology
• Ideas, databases, processes
• Most businesses have it
• Most don’t realise they have!
7. Who has got it?
Banks don’t understand
84% of 500 SMEs valued their IP at zero
9. Banking on IP?
“The increasing use of IP and intangibles
in the pensions area is a particularly
interesting development.”
“One company which has made considerable
use of pension-led funding to finance
businesses is Clifton Asset Management.”
“Asset-based and alternative financing
methods should be prioritised for IPbacked finance interventions.”
10. So how do we do it?
£ NEED
£ Released
Company
£
Lease
payments
made
Scheme
Bank
Account
Sets Up
Combined
Pension
monies
IP
Value
£
Sold to
Scheme
SSAS or SIPP Pension Scheme
Transferre
d
12. Who are our clients?
• DMACK Tyres set up
by Dick Cormack 2007
• Matched funding £75,000 use of pension
and SIPP, £75,000
from bank
• £10m turnover
13. Imaginet
• Web solutions company founded
1995 by Nigel Roberts
• Lack of tangible assets meant banks
not interested in lending
• Used pension-led funding to access
finance - since accessed two further
times
• Recently used pension-led funding
to secure £60,000 matched funding
from Welsh Government’s Digital
Development Fund
14. Secrets of success: Social importance, Stakeholders
•
Working with IP
Office and Government
•
Business Bank
•
Invited to Financial
Innovators Summit at
No. 10
15. Secrets of success: Customer journey
Built integrated
way of delivering
our product
seamlessly
across our range
of brands
Customer
Journey
16. Secrets of success: Awareness
• Press coverage,
battle for
awareness
• Business
Development,
getting partners
18. Alternative funding
• Alternative financing
approaches, such as crowd
sourcing, pension-led funding and
peer-to-peer lending, have
matched the ingenuity of SME
owners with innovative finance
methods, allowing them to raise
vital funding to support growth
•But greater signposting needed
19. Eureka!
• We have created a new
relationship with an old
product
• Bringing pensions out of the
darkness and making them
useful at a time when people
need them
• Our Eureka moment has
seen us add value to what
seemed a valueless asset
class – Intangible Assets
20. Fintech and the future
“SMEs are the lifeblood
of the UK economy.
Their ability to grow is
a key determinant of
the nation’s future
economic health”
Banking on IP? Report 2013
Editor's Notes
I’m Adam Tavener, Chairman and founder of Clifton Asset Management plc.
A financial innovator responsible for the creation of what is now referred to as ‘pension-led funding’.
This allows SME owners to invest in and back their own ideas and initiatives.
Have been doing this in one form or another for more than 20 years.
Passionate advocate of collaboration in the Business Funding Sector.
Built from nothing a company which has become the second largest provider of alternative business funding in UK.
Employ 100 staff from Bristol base.
So far we have funded 1,500 – 1,600 SMEs across the UK – many of them several times.
Collectively they employ 20,000 people and turnover in excess of £2bn.
I’m here to talk about pensions.
Bit of a boring subject I hear you say. But is it?
Pensions are just money and only boring if you believe the myths put out by the industry.
In fact pensions, properly utilised, are an incredibly powerful transformative force in the SME sector and can, and do, act as a growth accelerant without so many of the drawbacks surrounding traditional SME funding products.
I don’t find that boring at all!
In 2004 Finance Act changed the rules surrounding pensions.
Suddenly access to £100 bn.
This money could be used to provide investment and funding for SMEs.
Business owners could use their own money to help grow their ideas and their businesses.
But how to do it?
Although some businesses had tangible assets many didn’t – needed an asset as security.
The step forward – intellectual property.
Not just technology.
It’s ideas, databases, processes, reputations and relationships.
Most businesses have it – most don’t know they have.
Even scaffolding companies (no disrespect) have IP and we have helped them utilise it.
Is your business worth more than its balance sheet?
Banks don’t understand IP – not able to put value on it.
I regularly meet business owners who run companies of different sizes in different sectors.
These dynamic people are used to developing ideas and products – but astonishingly few realise the monetary value that inventiveness and brand hold for them.
Our research across almost 500 sSMEs found an astonishing 84% valued their IP at zero.
Vince Cable understands the importance of IP.
Globally IP has become one of most valuable but least-exploited assets in business, especially with SMEs.
In 2010 World Bank estimated royalty and licence fees alone generated £5.25billion in UK.
Yet virtually no funding solutions exist to leverage IP, except, of course, the UC, Angel and Crowdfunding markets which all involve the sale of part of the business.
Last November the Intellectual Property Office published a report to reinforce the need for finance to be made available to better exploit UK businesses’ IP.
Called simply ‘Banking on IP?’ the report was commissioned by Department for Business, Innovation and Skills and we were asked to consult.
It recognises IP as an important asset class which can be used for business funding but is currently seriously under-utilised.
Research by Nesta and Work Foundation highlight company investment in intangibles now outstrips that in tangible assets.
Pension-led funding was the answer.
Used IP assets to help hundreds of businesses secure investment.
The financial instruments most frequently used is a sale and leaseback mechanism.
This evolves the business while taking personal control of their own pension and using it to invest in their own intellectual property.
As developed idea also developed technology.
We’re not a tech company but we have launched some tech which helps give people a simple idea of IP.
Quick IP – it’s accessed through our website and allows business owners to input some simple information, which is then put through an algorithm which produces an indicative value of the intellectual property which they own.
As far as I know this is unique to Clifton.
One client who successfully used IP to build business was Dick Cormack, DMACK.
Set up 2007.
Matched funding - £75,000 pension from us using pension-led funding and SIPP, £75,000 from bank.
£10m turnover.
Has won a contract to supply tyres to the world rally championship.
Recent £3.5m private equity investment.
Another client Imaginet – recently name Online Agency of the Year – Online Retail Awards 2013.
Web solutions company founded 1995 by Nigel Roberts (pictured).
Lack of tangible assets meant banks not interested in lending.
Used SSAS scheme to access pension using IP from business.
Has used further 2 times.
Recently used to secure £60,000 matched funding from Welsh Government’s Digital Development Fund.
Is what we are doing socially important?
The numbers employed by our client companies would suggest so.
As a result we are engaged with a number of government initiatives aimed at proving better access to funding for SMEs and promoting the value of intellectual property.
Built an integrated way of delivering our product seamlessly.
Moving parts.
There are a whole lot of legal and technical issues surrounding the delivery of a pension-led funding solution.
To an outsider they would seem quite bewildering, but we have designed a process which is seamless and integrated, providing funding for the client in an efficient, cost-effective and timely manner.
This process is largely dependent on our own technology which we have continuously developed over the last eight years or so.
In the early days there were a whole raft of pensions industry voices telling us that it couldn’t be done.
We tackled this head on, on two main fronts – the national press and financial journalists, who have been fantastically supportive.
We also created our own introducer/ distributor network of trusted financial intermediaries such as brokers and accountants, who now account for over 50% of our new business flow.
What do these companies have in common?
Like us they are Financial Innovators.
Moving forward we are teaming up with people who, like us, are disrupting the norm and bringing something innovative to financial markets.The non-bank funding sector needs to collaborate if it wants to compete with and be a real alternative to the high street.
By acting together our collective viability is vastly improved and our influence exponentially enhanced.
Alternative financing approaches, such as crowd sourcing, pension-led funding and peer-to-peer lending, have matched the ingenuity of SME owners with innovative finance methods, allowing them to raise vital funding to support growth.
But greater signposting needed.
Realistically this means engineering behavioural change from organisations such as banks or parts of the accounting profession that wouldn’t traditionally look for a non-bank funding solution as a first choice.
We have created a new relationship with an old product
We have disrupted an industry, pensions, by forcing it to consider how new and more relevant investments can energise the SME sector, thus creating growth and value.
And we have created a method of leveraging real access to growth funding from the great overlooked asset class – ideas!
And so onwards to the future:
Banking on IP? Report says:“ SMEs are the lifeblood of the UK economy. Their ability to grow is a key determinant of the nation’s future economic health”
We need a different, transformative, way of doing things to help the UK’s financial and technical businesses continue to deliver their potential.
IP and alternative business funding have a key role to play in that and indeed, so does pension-led funding.
Thank you for your time.
