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Frequently Asked Questions

Private Equity is arguably one of the most lucrative investment areas available, often offering large multiple returns for successful companies but it is considered high risk. Private companies are usually valued solely on their business and prospects rather than the sentiment and volatility that often affects listed companies. The money invested also goes directly to the company for a specific purpose rather than to a seller or broker so it directly benefits the company.

This is a difficult question to answer because the range is so varied. In the worse case scenario a complete loss of investment is possible whereas the potential upside can run into many multiples of the sum invested. It’s also worth noting that Venture Capital investing can also offer tax breaks. The level of tax treatment depends on your individual circumstance. Tax breaks exist under current legislation and are subject to change.

The founders of SCL have been at the forefront of Private Equity and tax efficient investments for, cumulatively, over 40 years. Using a wealth of contacts and introductory sources worldwide they aim to source the best capital growth opportunities, for SCL and its investors, regardless of sector. Typically, we only work with 3-4 companies per year despite SCL reviewing maybe ten times this number.

Yes absolutely. The fees we charge cover the day-to-day costs of running our business but our major asset is the equity stake that we can take in all the companies. These can take various forms such as equity or deferred equity, warrants or options, but whatever form our involvement takes, it means that our interests are aligned with our clients in helping to develop these companies and then seeking profitable exits for these investments.

It should be remembered that all our investments are classed as high risk. This can be due to a number of factors but most commonly the lack of liquidity in securities of private companies, the early stage nature of some companies or the unadopted nature of new technology. With some investments, downside can be in part protected utilising the available tax efficient investment vehicles like the Enterprise Investment Scheme (EIS). The level of tax treatment depends on your individual circumstance. Tax breaks exist under current legislation and are subject to change.

This really depends on the comfort level of the investor but typically our investors range from £10k to £1m pounds per investment. Due to the high risk classification of this area, Investors must be able to satisfy one of 2 qualifying criteria to show they have either the knowledge, experience, appetite or ability to partake in this classification.

This will depend on the type of company that is invested into. Typically, but by no means definitively, EIS investments should be viewed as a 3-5 year investment. This is to allow the companies to implement their growth plans and also to maximise the tax breaks available. Of course there is the possibility of companies getting to an exit situation earlier than this but similarly it can take longer. On the pre-IPO side these companies are normally much further developed and, as such, should be listing on an exchange within 6-12 months. This does not necessarily mean that investors will want to exit immediately as there will normally be further upside potential but it should give them the option.

We normally engage with these companies on an exclusive basis and, in many cases, have long term relationships with the directors or principals as well. This enables us to provide a regular flow of news and updates to investors. Obviously for those companies that achieve a listing then their share price as well as any news announcements will be in the public domain. As we are likely to have stakes in the companies too, we are always in close contact so can keep you well informed.

In the event of a proposed buy out you will be made aware of the options. We have stakes too and have much to gain from the right offer. For a listed entity the timing is crucial. This is why regular and accurate information flow is crucial to enable investors to calculate their individual strategy.

We undertake corporate finance work for the selected companies for which we charge a fee dependant on the work required. This may include due diligence, document preparation or restructuring etc.. We charge a fee for fundraising but this money comes from the company not the investor meaning that the investor pays no fees or commissions to subscribe and receives shares to the exact value of his or her investment. We also normally have a retained interest in the company via either equity, warrants or options that aligns our interests with investors in that we have a large financial benefit for each successful conclusion.

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