Matrix Private Equity has established its second Matrix enterprise fund, a managed portfolio of between four and six enterprise investment schemes (EISs).
The fund aims to provide capital growth and is similar to the previous fund which was introduced last year. It will be fully invested by April 2003 and has made two investments to date. These are security services firm FSG Security group and Signature Brands, a fashion retailer.
This second Matrix offering will make use of the investment prospects that came to their attention through the previous fund. Although it can invest in companies listed on the Alternative investment market (Aim), it is most likely to stay with unquoted companies.
The fund will be managed by the Matrix private equity team, which is headed up by Helen Sinclair. Sinclair has 16 years' experience of private equity investments. When selecting companies to invest in, Sinclair will look across sectors for companies that have good management teams and profitable track records. The team will research each company thoroughly, visit them, asses cash flows and look at business plans.
There may be many companies seeking capital injections as a result of current economic conditions and these can be accessed at low prices, with the benefit of diversity through this fund. Returns from quoted companies at a low level, so some investors may decide the potential for outperformance is worth the higher risks.
However, unquoted companies could have more problems than quoted companies and may need further funding to get them out of trouble. Also, it can be difficult to exit form this type of investment, especially in the current economic environment, as it may be difficult to sell the shares.