Noble & Company is aiming to raise up to £10m for the capital pub company 2 enterprise investment scheme (EIS), which will acquire an initial portfolio of 12 pubs over the next three years.
The first capital pub company EIS was established in 2001 and has raised £15.4m through two share offers and a private placing. EIS rules prevent the company from raising further money for the first fund so the directors have set up the second EIS to follow a similar strategy. The second EIS will use the same resources as the first through an introducer agreement and a management contract to minimise costs and draw on the experience of those involved in the existing EIS.
David Bruce, chief executive of the original capital pub EIS, will be responsible for identifying and acquiring suitable sites for the second EIS and the day to day operation of the pubs. Clive Watson, finance director of the original EIS will deal with the legal and financial aspects of the business, including budgeting and performance monitoring.
They believe pub regulars in London are more likely to drink in independent pubs that have their own identity, as this will make them stand out from pub chains or those that are tied to a specific brewery.
The target premises will mainly be freehold properties as this provides extra security for investors as an asset-backed investment. They will also be looking at underperforming pub groups which will benefit from a new licence.
This EIS is lower risk than some schemes because it will be backed by property. However, its success depends upon the ability to find suitable pubs in the target area and the directors believe that the contacts they have made through the first EIS will make this easier. However, there could be a conflict of interest if a particular pub looks suitable for both EIS companies.