We are delighted to announce the launch of The Seneca Managed Storage EIS Fund to complement our existing growth capital offering via our Evergreen Portfolio Service. Following on from our existing investment involvement in this sector over the last few years this latest addition offers the option for investors to moderate their return expectations by investing in businesses which are underpinned by freehold or long leasehold assets, potentially creating downside risk protection.
Seneca are seeking to raise an initial tranche of £10 million across two managed storage companies which will each invest in two sites each of c.50,000 sq ft capacity. Operating under the brand SureStore, Seneca will be backing a proven operator in the geographical regions of the UK where Seneca maintain a strong presence. The fund targets a return to investors of £1.20 per £1 invested excluding tax reliefs.
Seneca’s Business Development Director, Ian Battersby added:
“Our growth capital Portfolio Service targets a return of £1.60-£1.80 per £1 invested excluding tax reliefs and all our investments from the Portfolio Service are transacted on the basis they have demonstrated the fundamentals to potentially achieve that.
The Managed Storage businesses are very unlikely to be able to achieve returns at those levels, predominantly because of the value of freehold or long leasehold property on their balance sheets which we are buying into on behalf of our investors. More realistically the returns could peak at £1.30 on the upside but rather than turn aside a very good business opportunity which wouldn’t meet the level of returns mandated by the Portfolio Service, we recognise that some investors may have more modest return expectations in return for an investment which has downside risk and which is significantly protected by the security of property assets. It is a market we know very well and we are working with operators of vast experience who have a strong track record of delivery.
Consistent with our existing EIS offering, The Managed Storage EIS Fund sees the operator’s incentives kick in only once investors have reached their target return of £1.20 per £1 invested excluding tax reliefs. We have also maintained our investor friendly charging structure; Seneca charge no initial fees or AMCs to investors; investors are responsible only for custodian costs. Early indications suggest demand for this investment will be strong.”
Please remember that tax rules and regulations are subject to change. EIS investment is not suitable for everyone; you should seek advice from your financial and tax advisers before making an investment.