Trustnet Magazine Issue 30 June 2017

/ UNICORNS / 14 Lockyer’s preferred strategy is to use investment trusts such as Scottish Mortgage or Woodford Patient Capital, both of which offer a high allocation to early stage private businesses but in a diversified manner. “Both have a good network to get access to new ideas and, because they can offer long-term capital via the closed-ended structure, they are regarded as helpful investors,” he says. Whether you’re looking at Silicon Valley or Silicon Roundabout, investors should remember that spotting the growth giants of tomorrow is difficult, requires patience and for every unicorn there are many, many donkeys. Far from being magical, the latter are more likely to make you feel like an ass.  FP CRUX European Special Situations Fund Return on £1,000 invested 1 year 2 years 3 years 4 years 5 years Since launch* - 30.04.17 CRUX European Special Situations Fund £1,284 £1,370 £1,507 £1,651 £2,172 £2,629 Sector average : IA Europe ex UK £1,261 £1,252 £1,334 £1,534 £1,929 £1,910 Index : FTSE World Europe ex UK £1,288 £1,237 £1,324 £1,520 £1,947 £1,872 Cash : Bank of England Base Rate £1,003 £1,008 £1,013 £1,018 £1,023 £1,036 Source: FE © 2017, bid-bid, £1,000 invested, cumulative performance to 30.04.17. *Launch date 01.10.09. Active managers who invest in their own funds Active investment management requires confi dence, courage and commitment in every investment decision, something the managers of CRUX’s European Special Situations Fund have plenty of. PERFORMANCE OF INDEX OVER 10YRS 10% 0% -10% They are also committed to aligning their investment aims with that of their clients by investing meaningful amounts of their own assets in their funds. FTSE AIM 100 (-3.50%) -20% -30% As you can see from the table above, it’s an approach which is delivering strong performance and over the years they have achieved an impressive track record. -40% -60% -60% The Fund has comfortably lapped the index and most of the tracker funds that follow it nearly every year over the past fi ve years, as shown in the table above. So if you’re investing in Europe put yourself on the podium with active asset management, not in the slow lane with a passive investment. Past performance is not a guide to future returns. The value of an investment and any income from it are not guaranteed and can go down as well as up and there is the risk of loss to your investment. -70% Hollands says there are some early-stage opportunities in the UK, especially if you use a vehicle such as an Enterprise Investment Scheme (EIS) which mitigates some risk through tax breaks. An EIS provides investors with a 30 per cent income tax credit, tax-free capital gains and loss relief if the investment fails. However, Hollands adds that many companies that use EISs will do so on an invite-only basis to known wealthy investors. Venture Capital Trusts also offer exposure to early- stage firms with similar tax breaks, but are easier to access. “These businesses, however, can spend years burning cash on staff and equipment before they have a single client or source of income and the only real asset might be a patent on some international property,” he adds. MITIGATING RISK “These businesses can spend years burning cash on staff and equipment before they have a single client or source of income” in LinkedIn and Facebook – highlights the benefits of thinking big. Thiel recommends a portfolio approach whereby each holding has the potential to make more money than all the rest combined. While this has clearly worked for him, is the “millionaire start- up investor” simply a myth for anyone outside Silicon Valley? For every Next Big Thing, how many hundreds of start-ups fail, leaving disappointed investors? Looking at the returns of the AIM index, where UK start- ups traditionally go public, the numbers are mixed. It is still down over 10 years despite gains of 36 per cent over 12 months. Courage and commitment - that’s the Source: FE Analytics trustnetdirect.com Consult your fi nancial adviser, call or visit: 0800 30 474 24 www.cruxam.com Fund featured; FP CRUX European Special Situations Fund I ACC GBP class. The Henderson European Special Situations Fund was restructured into the FP CRUX European Special Situations Fund on 8 June 2015. Any past performance or references to the period prior to 8 June 2015 relate to the Henderson European Special Situations Fund. This fi nancial promotion is issued by CRUX Asset Management, who are authorised and regulated by the Financial Conduct Authority of 25 The North Colonnade, Canary Wharf, London E14 5HS. A free, English language copy of the full prospectus, the Key Investor Information Document and Supplementary Information Document for the fund, which should be read before investing, can be obtained from the CRUX website, www.cruxam.com or by calling us on 0800 304 7424. For your protection, calls may be monitored and recorded.

Trustnet Magazine Issue 30 June 2017 | Page 16