A new enterprise investment scheme that allows investors to back a portfolio of pedigree horses has been launched.
The In Showjumpers 2013 EIS is managed by Caroline Wilks, who has previously held positions at the Royal Bank of Canada and Bank of Bermuda. The horses are selected by showjumping horse trainers Duncan Inglis and Henk Nooren.
The fund is looking to raise £3.5m and the minimum investment is £10,000.
Wilks says: “The horses we are looking to buy would be valued between £150,000 and £500,000 and aged between six to nine.
“They would be trained and competed strategically to increase their value. The decision on their training would be purely from a commercial perspective in terms of enhancing their value.”
The In Showjumpers EIS has received advanced assurance from HMRC that the shares rank as eligible shares and is already trading and issuing EIS 3 certificates.
EIS schemes are designed to help smaller higher-risk trading companies raise finance by offering a range of tax reliefs to investors who purchase new shares in those companies.
Wilks explains the horses would be held from between six to 18 months before being sold and the funds would be re-invested until after year three.
“After the three years it is likely we would then go to the shareholders and get their view as to whether at that stage we should stop reinvesting and then the funds will be returned to the investors,” she says.
Wilks acknowledges the new EIS is a “high risk” investment and will not be suitable for all investors.
Charles Stanley Direct head of investment research Ben Yearsley says: “There are bound to be some benefits but I would not expect massive returns. You might get lucky but the history of higher-risk EIS is very few – if there’s any – decent returns.”