1. INVESTMENT ADVISER MARCH 9 2015
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W
ith anaerobic digestion and hydro
power generation projects not being
eligible for EIS tax reliefs from 5th
April 2015, investors will now be
looking for new ways to invest through EIS with
a focus on real and reliable revenue streams. It is
more important than ever that investee compa-
nies strike the correct balance between provid-
ing investors with the chance to create real
returns from strong opportunities, as well as
managing some of the risk through strength of
counterparty and business model.
As well as IHT Portfolios, which focus on deliv-
ering Business Relief through capital preservation
focused trades, Blackfinch also offer portfolio ser-
vices for investors seeking Enterprise Investment
Scheme (EIS) and Seed Enterprise Investment
Scheme (SEIS) qualifying opportunities. Our
strong management team and asset advisers are
experienced and also carry the expertise necessary
to source, develop and manage these investments.
Blackfinch EIS Portfolios provide these charac-
teristics for investors, to help fill the gap left by
renewable energy generation within EIS. Our EIS
portfolios are a discretionary service, meaning
that we select the investee companies on behalf of
the investor, according to our investment man-
date. First and foremost, we will only invest into
companies which have been granted Advance
Assurance from HMRC, providing comfort to the
investor that they qualify for the valuable EIS tax
reliefs. The nature of the investee company activi-
ties also provide strategic focus on capital preser-
vation through their predictable income streams
underpinned by intellectual property or high lev-
els of contracted revenue.
The underlying investee companies in our EIS
portfolios are concentrated in the media sector,
allowing investors to access real growth opportu-
nities on their investments. The entertainment
and media sectors are an established and impor-
tant part of the UK economy, accounting for
approximately 4% of GDP. Blackfinch focus on
two distinct areas within this sector, music pub-
lishing and television distribution.
Ourmusicpublishingcompaniesareresponsible
for creating, protecting and monetising rights in
musicalcompositionsonbehalfofmusicians,song-
writers and composers. Music publishing royalties
are the revenues due to the creator of that underly-
ing intellectual property and are generated from a
number of sources, including performance, syn-
chronization and mechanical royalties. The intel-
lectual property and strength of revenues contrib-
ute to the capital preservation characteristics, while
the strength of counterparties we work with means
that there is real potential for growth.
Our television distribution companies sell the
broadcast rights for the television programmes on
behalf of producers. The companies acquire the
distribution rights for those television pro-
grammes by advancing money to the television
producer which is recovered in the first position,
along with sales commission and expenses, from
the sales of the programme to international
broadcasters who license those rights.
Usually, the majority of revenues
will come from one reputable
BIOGRAPHY
Richard is a founding partner
of Blackfinch and has been
CEO since 2009. Previously
Richard held UK taxation
positions at Bank of New York
and Merrill Lynch. Richard’s
main focus at Blackfinch has
been the development and
management of tax efficient
trading companies with a
focus on capital protection, as
well as developing
Blackfinch’s relationships and
investor solutions within the
UK intermediary space.
EIS&SEISINVESTINGWITHBLACKFINCH
RICHARD
COOK
FOUNDING PARTNER OF
BLACKFINCH & CEO
“We provide
strength and
expertise
through our
management
teams and
counterparties”
primary broadcaster, such as the BBC, and are for
a known amount which is contracted in advance.
These contracted revenues offer an element of
capital protection to investors and the remainder
of revenues are from sales to credit-worthy inter-
national broadcasters.
Tax reliefs available for EIS qualifying invest-
ments include 30% upfront income tax relief,
100% capital gains tax deferral, offset of capital
losses, tax free growth and 100% inheritance tax
relief after two years. Investors are able to invest
up to £1,000,000 per tax year and can also carry
back investment into the preceding tax year.
Blackfinch also provide SEIS Portfolios, a dis-
cretionary portfolio service which selects SEIS
qualifying underlying investee companies on
behalf of clients. Again, the underlying investment
strategy is within the entertainment and media
sector and all investee companies will have been
granted Advance Assurance from HMRC, but
with SEIS the tax reliefs are more generous. SEIS
legislation was originally introduced by the UK
government in 2012 and has since been made a
permanent fixture due to its success.
Blackfinch SEIS Portfolios access investee com-
panies which fund new independent music, which
also carry the benefit of being distributed by a
major label e.g. SONY, Universal etc. Each under-
lying investee company will produce recorded
material by a variety of established and exciting
new artists and benefit from the revenues created
through the sales of that material, which will be
distributed by a major label. The investee compa-
nies also own the intellectual property.
Tax reliefs available for SEIS qualifying invest-
ments include 50% upfront income tax relief, up to
50%capitalgainstaxrelief(reliefratherthandefer-
ral), offset of capital losses, tax free growth and
100% inheritance tax relief after two years. Inves-
tors are able to invest up to £100,000 per tax year
and are able to carry back investment into the pre-
ceding tax year.
Blackfinch is an established provider of tax effi-
cient and capital protected investments, with a
clear focus on capital preservation, transparency
and security. With over 20 years experience and
expertise in the UK market, and approximately
£500m under management and administration
within our group, we focus on delivering strong
investment opportunities to our clients which also
benefit from favourable tax reliefs.
We understand that this is an important time
for advisers and investors to source investment
opportunities which carry the balance of growth
opportunity, capital preservation and qualifica-
tion for the valuable tax reliefs. At Blackfinch we
believe that we have struck this balance with our
EIS and SEIS Portfolios and that we provide
strength and expertise through our management
teams and counterparties.