Onside Issue 4 - 24

ONSIDE / INTERVIEW

It's a pretty strict set of criteria before Seneca
will invest, is it not?
It is strict, but we are investing capital entrusted to us by
investors and their advisers and so it needs to be strict! I
think that is one of the benefits in using someone like
us who have around 70 people permanently working
with Britain's SMEs in some capacity because that's our
specialism. We have a very senior investment team with long
track records of successfully delivering value by selecting
good opportunities. We meet hundreds of management
teams each year and yet we invest in only a relatively
small number. Getting the entry point valuations is pretty
major, given that we are looking typically at only a 3-4
year investment horizon with EIS and right siding an over
inflated valuation in that time frame is nigh on impossible.
The experience and pedigree of our Investment team is one
of our clear strengths in that regard. Equally, the underlying
due diligence processes are designed to be thorough and
flush out any aspects which we may not like.

Would it be fair to say that being located 'in the
regions' is a differentiator for Seneca?
Yes, definitely. We have six offices spread across the North
West, Yorkshire and the Midlands in what we call the
"SME heartlands" and we tend to originate a lot of our
deals through our vast network. Many of the businesses
we see are good businesses and historically would have
been readily funded by the Banks. However, despite what
the media tells us, they still struggle to access capital for
growth. But it's not just about providing a cheque, we
provide advice and support to these businesses through
their growth journey which is every bit as important;
something which is often overlooked externally.

What sort of returns do you look for in your
EIS Portfolio Service?
Firstly, we aim to give each investor 4-6 investments
each year they invest which gives them some
diversification and we target a return of £1.60£1.80 for each £1 they invest and that is
irrespective of the initial tax relief of 30% which
they get. Obviously that is not a guarantee, but
it is our target. So net cost of investment is
broadly around 70p but we start with the £1
we are given and base our returns on that. In
our opinion, to take credit for giving investors



Table of Contents for the Digital Edition of Onside Issue 4

Contents
Onside Issue 4 - Cover1
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Onside Issue 4 - Contents
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