Some nasty turns

[Vulgaris]

Today's Telegraph has a story to the effect that the Oxford Infrastructure EIS is in trouble, with letters going out to investors saying that there are major writedowns, with some of its solar farm, anaerobic digestion and energy storage investments essentially worthless. And this was a big beast, with £350m invested in the (supposedly) safer sort of alternative energy providers. Oxford is trying to blame the problem on changed rules, though this looks dubious, since the failing investments were made under the previous, and more liberal, rules. Other alternative energy cos and VCTs don't show signs of going broke.

Simultaneously we have the (non VCT/ non EIS) Woodford saga, where a lot of money has gone into unquoted investments (amazingly in the case of his Equity Income OEIC and more legitimately in the case of the Patient Capital Investment Trust. There are growing assertions that many of the investee companies (esp Industrial Heat and Benevolent AI) are being carried at far above fair value, exaggerating quoted NAVs.

What does strike me as a common thread (and I have no personal exposure to any of these schemes) is that in both cases they've had to deploy very large amounts of money very quickly in the unquoted companies and have made poor choices, perhaps in direct consequence. This does leave me increasingly queasy about the increasingly large raises - which also need to be invested swiftly - but VCT providers. One has to question if there are sufficient good opportunities around.

[Kidman]

One has to question if there are sufficient good opportunities around.

I think the answer is no.

I had a look at the EIS story and note that the infrastructure investments are made by a company called Oxford Capital, not to be confused with Oxford Technology. Oxford Capital also marketed these infrastructure investments for estate planning and they were resold by SJP:-
https://citywire.co.uk/wealth-manager/news/sjp-clients-among-those-hit-by-iht-investment-troubles/a1248659
SJP also had a large amount of money with Woodford but as it was segregated they were able to withdraw it after the ongoing fund suspensions.

On the subject of deploying money too fast, I ws intrigued by the following from the Oxford Technology website:-

In the past, at the request of individual investors, we have invested sums of up to £500,000 in 4-5 EIS investments in a few weeks, typically to meet a particular tax need. At any one time, there are typically 5-6 of our portfolio companies with open fundraising in progress. If you have a particular tax need, please contact us to discuss if we can help.

The tax tail is wagging the dog?

[james188]

As I have posted in the past, I would suggest extreme caution (and careful research into past performance) before investing in anything managed by Oxford Capital. I speak as someone who put EIS funds with them back in 2013 which have now almost entirely evaporated. They didn't even protect all of the tax break, because a number of investments blew up in the first few years. DYOR.