Vantis Corporate Finance has established Cross Oak Inns, an enterprise investment scheme which aims for capital growth by investing in a portfolio of pub restaurants in Southern England.
Vantis hopes to raise £3m through this share issue and with gearing of up to 70 per cent, the amount should be enough to buy between five and 10 pubs. The EIS will exploit the popularity of gastro-pubs through a strong food element and will be located mainly in Berkshire, Hampshire, Kent, Surrey and Sussex.
Although other pub groups are aware of industry trends and have invested heavily in food as a result, many operate a branded chain so menus become standardised, with little variation between pubs in different areas. The directors of the EIS believe there is a growing demand for more individual pub restaurants among the over-25 age group and intend to provide this.
The premises are likely to be established freehold businesses which are not tied to a specific brewery. Once purchased, the intention is to operate them as pub restaurants within two years.
Shareholders should be offered an exit after three years through a stockmarket flotation or the sale of the pubs. However, if investors need to realise their investment before this, they will have access to a matched buyer trading facility operated by JP Jenkins, a stockbroker which specialises in unlisted and unquoted shares.
Although the directors of Cross Oak Inns argue that many pub restaurants are part of a branded chain, it is not unique in establishing pubs with good food that have their own character. However, the matched buyer trading facility is a feature that makes this EIS stand out. Investors in an EIS often find it difficult to realise their investment before the qualifying period so a feature such as this could be useful but it will only offer an exit to a shareholder if someone else is willing to buy the shares.