Goodbody clients invest €10m in new SME-focused fund
Goodbody Stockbrokers has raised €10m from private clients for a new SME-focused fund. The fund will invest in businesses under the Employment and Investment Incentive Scheme (EIIS), which gives investors income tax relief of up to 40pc on their investments.
The fund is managed by a joint venture company owned by Goodbody and the accountancy firm Baker Tilly Hughes Blake.
It will be deployed in 2017 and is a successor to a similar fund which this year has invested in transport firm McArdle Skeath and nursing home company Kiltrough.
Almost all of that fund has now been invested.
Qualifying firms can receive €5m in a year and €15m in their lifetimes under the scheme.
The Goodbody fund will make investments between €500,000 and €5m in a year, with the potential for follow-up investments.
Most SMEs - defined as having fewer than 250 employees and turnover less than €50m or gross or a balance sheet total of less than €43m - are eligible to participate in the scheme.
However, areas including property development, commodity dealing, professional services, coal, steel and shipbuilding are excluded.
Companies that receive investments have to use the funds to contribute directly to the maintenance or creation of jobs in the company - the money received cannot be used to repay debt.
The investment is made in the form of shares which the investor must hold on to for four years.
"Companies have started to look on EIIS as an attractive source of long-term funding to support the growth of their business," said Goodbody senior pensions and tax advisor Aoife Lavan.
"A number of medium-sized companies have approached us for funding over the last year and this is the market we are looking to invest in."
Sunday Indo Business