The Seneca Managed Storage EIS Fund January 2017 · the managed storage sector, and evidence...

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Tax Advantaged Investments EIS Review

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Seneca Partners Limited (“Seneca” or the “Manager”) is looking to raise up to £10 million for the Seneca Managed Storage EIS Fund (the “Fund”) for the tax year ending 2016/17. It was launched in September 2016. After an initial investment threshold was met in November 2016, shares were allocated to the investee companies. A second round of allocations will commence on 29 March 2017 for those who invest before that time.

Score Card

Fund Type

Specialist Non-approved

EIS Strategy Specialist

Fund Structure Non-Evergreen

Manager AUM £60 million

EIS Risk Level Low

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Investment

Minimum subscription £25,000

Maximum qualifying subscription per tax year £1 million for EIS tax relief

Early bird discount None

Contents

Closing Dates

29 March 2017

3 Executive Summary

7 Manager Quality

Manager Profile

Financial & Business Stability

Quality of Governance and

Management team

14 Product Quality Assessment

Investment Team

Investment Strategy & Philosophy

Pipeline/Prospects and current

Portfolio

Investment Process

Risk Management

Key features

Performance

The Seneca Managed Storage EIS Fund January 2017

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Tax-Advantaged Investments

Risk Warning for EIS Schemes Individuals should always read and bear in mind the risk warning notices that are included within providers’ investment offer literature/documentation, including prospectuses, information memorandums, securities notes, brochures and other related marketing literature. Whilst the following list is not exhaustive, some of the main risks to be aware of include:

Investments are in small, unquoted companies and should be considered as high risk;

Investments are illiquid and need to be held for at least three years in order to retain the initial income tax relief;

An EIS/Seed EIS investment should be viewed as a long-term investment;

Legislation, along with the nature and level of tax reliefs is subject to change. There can be no certainty that investments will be eligible or remain eligible for EIS/Seed EIS Relief;

Historic investment performance cannot be used as a guide to future performance, and the value of any given investment may rise or fall;

Many EIS/Seed EIS Schemes involve investment in a single company or sector and therefore should only be considered as a small part of an overall portfolio;

Investors may not have independent representation on the Boards of investee companies which can mean their interests are not adequately considered relative to the executive team;

EIS/Seed EIS investments should only be considered by sophisticated investors who understand, and have given careful consideration to, the underlying investment strategy and associated risks. For help in determining potential investment suitability, professional advice should be sought;

Often there will be no regulatory oversight and investors will usually not be eligible for compensation if things go wrong.

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Executive Summary

Manager: Founded in 2010, Seneca Partners Limited (“Seneca” or the “Manager”) is a specialist corporate financier providing equity/debt funding and advisory services to small- and medium-sized enterprises (“SMEs”), which Seneca defines as businesses with an annual turnover of up to £100 million. It operates mostly in the Midlands, the North West, Yorkshire and the North East, where it has established a strong presence across its group of Seneca-branded companies. To help SMEs raise capital tax-efficiently Seneca entered the tax-advantaged sector in 2012, raising funds for the Enterprise Investment Scheme (“EIS”) qualifying companies and an inheritance tax service using business relief (“BR”). It also provides corporate finance and debt advisory services to SMEs. The Seneca family of companies have an aggregate staff count of 70 and assets under management (“AUM”) of over £400 million. These associated companies provide a range of financial services including equity investments, debt funding and corporate advisory services to SMEs.

This review concentrates on the Seneca entity that manages their EIS services, Seneca Partners Limited, and the Seneca Managed Storage EIS Fund. We have previously reviewed Seneca’s older EIS offering, the Seneca EIS Portfolio Service, in September of this year.

Product: In September 2016 Seneca Partners launched the Seneca Managed Storage EIS Fund. The fund was launched with the intention of investing in the managed storage sector, while also allowing investors to benefit from the tax reliefs afforded by the Enterprise Investment Scheme. Seneca Partners have been managing funds that are invested in the storage sector since 2014. The team managing their current storage assets within a private equity fund will manage the Fund.

Investor commitments will be invested in one or more EIS-qualifying managed storage companies with the aim of investing £5m each into two qualifying companies if the £10m raise target is met. Each company intends to acquire sites for either a new build or facility conversion. At a £10m fundraise, each company intends to operate two managed storage facilities, for which three sites have already been identified. The investee companies will then utilise the services of an operating partner, SureStore, responsible for executing the business plan of driving occupancy levels (key to generating profit against a relatively fixed cost base).

Seneca assert that the fundamentals of the managed storage sector, together with the asset-backing of the storage sites, provides appeal to Investors looking for returns with the added security of downside protection in the form of the potential value represented by the property assets. The realisation proceeds generated from a sale of these properties could return part of an Investor’s Subscription to them in the event that the managed storage trade is not successful.

Summary Opinion: The Seneca Managed Storage EIS Fund is a lower-risk/moderate reward asset-backed EIS play. The success of the managed storage investment is largely dependent on four main variables: acquiring suitable locations for the facility; erecting or refurbishing the facility within the cost/quality/time envelope; driving occupancy rates on or ahead of schedule to reach target; and securing a timely exit that matches or exceeds the target multiple. Seneca’s history in the managed storage sector, and evidence collected to ascertain the likelihood of hitting Seneca’s targets, as well as the background of the operating partner, give us confidence that Seneca’s investment target of 1.2x is both achievable and realistic.

Offer: Seneca Partners Limited (“Seneca” or the “Manager”) is looking to raise up to £10 million for The Seneca Managed Storage EIS Fund (the “Fund”) for the tax year ending 2016/17. The Service seeks to provide investors with a portfolio of one or more EIS-qualifying companies that have the potential to grow strongly and secure an exit from the fourth year of capital deployment by Seneca.

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The optimism engendered by Seneca’s history in this area is tempered by both pointing out the limited upside and the downside risks to the managed storage trade. The asset-backed nature of the investment means that the downside risk of the investment is somewhat mitigated with underlying land values and tax relief putting a soft floor underneath the initial investments, albeit the development costs are unlikely to be recoverable if the site proves to be uneconomic. The largest risk, if not a likely one, would be a general regional downturn in land values in the North and English Midlands.

On the upside, while we have some confidence that the Fund might be expected to reach the target of 1.2x investment, the 80% performance fee for the operator above the hurdle rate (as well as the limited nature of price per sq. ft. and unit capacity in the facilities), means that outperformance beyond that multiple is unlikely to be significant for an investor.

Fees are charged mainly to the investee companies with the custodian’s fees the only non-performance related fees payable directly by investors.

In summary, Seneca’s Managed Storage EIS Fund offers a reasonably low-risk/moderate-reward investment with an experienced manager and evidenced business plan. While investors should, of course, be cognisant of both the general risks associated with investing in EIS funds, the Fund might well be attractive for investors looking for a lower-risk, asset-backed tax-advantaged investment as part of their portfolio albeit investors need to understand that the level of asset backing is not as high as other asset-backed products on the market.

Positives At the Manager level:

Seneca has demonstrated a steady growth in assets under management (“AUM”) year on year since entering the tax-advantaged sector in 2012;

The product range has grown from the provision of equity, debt and corporate advisory services to include an EIS portfolio service and an inheritance tax service as part of their tax-advantaged product range before launching this new EIS fund;

Seneca has a wide group of affiliated companies through which it can exploit economies of scale through the pooling of central resources with affiliated companies;

Seneca has hired strongly in the last three years, and has carefully delineated investor duties across divisions with a total staff of 70 across affiliated companies;

Seneca is a financially stable, profitable company with adequate cash reserves, and with clearly identified future revenue streams;

Its regional presence also allows it to enjoy a strong recruitment catchment area for professionals not wishing to work in London or the Home Counties, where VC firms historically tend to prefer to be located;

All the senior management are shareholders in the business;

The Manager has consistently met its fundraising targets over the past four years, allowing it to launch an inheritance tax service to complement its EIS services;

Governance is controlled and overseen by four committees with links through each to the Board of Directors, which is a reassuring feature.

At the Product level:

The investment selection, screening and process is robust, clearly defined, and established;

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The Investment Team of five is, in our opinion, of ample size to fulfil the Service’s mandate; it has evidenced itself as being skilled in the construction and management of EIS and the investment in early-stage companies;

Seneca has invested in managed storage before, albeit not in an EIS context;

Seneca’s regional presence, past experience in the managed storage sector, and previous relationship with an experienced operating company, suggests Seneca should have the capacity to identify promising storage sites and operate such sites to a profitable level;

Most of the fees are charged directly to the investee companies which gives rise to VAT savings.

Pipeline appears well-developed with three sites already identified and an operating partner in place. Capital should be deployed rapidly with a fourth site currently in negotiations. This fund is considered the first of a mooted series of similar managed storage project funds, with confidence that sites can be identified for this higher volume down the line as new funds are launched.

Issues to consider At the Manager level:

Seneca is relatively young in tax-advantaged investments, having launched its first EIS fund in 2012;

Despite the advantages of the affiliation of companies as already referred to (cross selling opportunities, economies of scale etc.), the structure is also complicated, which could, for example, influence the allocation of resource between the different entities and create conflicts of interest;

Historically Seneca has been significantly dependent on the income generated from its tax-advantaged products, which could suffer from future commercial and legislative changes, and expansion of their non-tax-advantaged products could ensure greater diversification of its revenue sources. Hearteningly this dependence for revenues has been much less the case over the first 10 months of this year with only 27% of revenue coming from EIS/IHT activities. Moreover, the revenue earned from the tax-advantaged products is minute compared to the overall Seneca-branded group of companies and the impact of the above-said risks could be somewhat absorbed;

Seneca’s corporate finance involvement with investee companies could potentially create a conflict of interests between its role in acting in the best interests of investee companies and acting in the best interests of investors. This is to a certain extent offset by the benefits of the greater knowledge Seneca will gain of investee companies. Nonetheless, Seneca has put in place compliance procedures to address such matters and we also found the conflicts of interest policy comprehensive and detailed.

At the Product level:

While Seneca rightly points out the lessened risk due to the investments being asset-backed thanks to the land purchases on which the managed storage facilities will sit, there is still unarguably a risk in the event of a general downturn in property values and any development costs would likely be lost if the sits prove to be uneconomic;

Seneca’s first EIS offering, Seneca Growth Capital Approved EIS fund in 2012, invested in four companies, one of which exited early, triggering a loss of EIS benefits, albeit at a net profit of 1.8x to investors. There was also a partial early exit from one of Seneca’s EIS Portfolio Service

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investments which generated an average 10x return. Even though the exits generated good return, investors will have lost EIS reliefs that they could have utilised elsewhere;

While Seneca has been involved in the managed storage sector through their institutional business for some time, they have not had an exit at the time of writing (albeit on different timescales to the one promised in this EIS fund); a successful exit by sale to a competitor from Seneca’s private equity managed storage portfolio would give greater confidence, although Seneca mention that they have had conversations and proposals which they expect to bear fruit in terms of exits in the near future.

Whilst the Manager aims to achieve exits by the fourth anniversary of the fund for all unquoted investments and has demonstrated an ability to deliver in previous EIS ventures, the nature of these investments is such that a much longer holding period may be necessary in some cases.

Performance fees can often introduce perverse incentives, from an investor’s point of view, for asset-backed investments. For example, the operator is incentivized to wait for a better offer if a facility can be sold at a price which will generate the 1.2x return whilst investors are likely best served taking that same offer so that they can reinvest.

The performance fee hurdle is based on the performance of each company which incentivises the operator to focus its efforts on those operating companies that are performing best and could lead to overall performance falling short of the target.

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Manager Quality Manager Profile Seneca Partners Limited (“Seneca” or the “Manager”) was formed in 2010 by private individuals with the aim to provide small- and medium-sized companies (“SME”) with equity/debt funding and corporate advisory services, particularly in the Midlands, North of England and its neighbouring counties, entering the EIS sector in 2012. It is therefore relatively new to the sector of tax-advantaged investments.

Since the firm’s founding in 2010, the Directors have been very active in assembling an affiliation of companies to trade under the Seneca name, in the provision of services that are complementary to each other, as far as possible. In short, it has created or acquired two subsidiaries and has founded three stand-alone entities that the directors state will act in concert with each other in the promotion of the Seneca portfolio of activities. Although the Seneca-branded companies do not form a group as it is commonly defined, they share central systems, such as human resources and payroll, which are conducted from the Haydock central office. Seneca believes this is advantageous due to the creation of economies of scale and increased commercial opportunities - which we acknowledge, while remaining mindful that the corporate structure is somewhat informal, overall. The table below summarises the current five related entities trading under the Seneca name:

TABLE 1: SENECA-RELATED COMPANIES

Entity Activity Location Structure AUM (£million)

Seneca Partners Limited Corporate Finance/Investment Management

Haydock/ Birmingham Parent Company 61

Seneca Investments Ltd

Management Consultants Turn around special situations

Leeds Subsidiary of Seneca Partners Ltd 5

Acceleris Capital Ltd Venture Capital Investment EIS and non-EIS

Manchester Subsidiary of Seneca Partners Ltd 32

Seneca Investment Managers Ltd Fund Management Liverpool Common

Shareholders with Seneca Partners Ltd

350

Seneca Banking Consultants Ltd

Bank Miss-selling Advice Bolton n/a

Source: Seneca; AllenbridgeIQ

The Seneca companies have a total staff of around 70 and are continuing to grow; Seneca Partners Limited, under review here, employs 30 and manages £61 million: £42 million of EIS funds, and £19 million of BR inheritance tax products. The Seneca affiliation of companies manages over £400 million. Seneca has a narrow, if expanding, product range. Having started as a corporate financer of SMEs in 2012 it expanded into EIS funds with an approved EIS fund, followed by the portfolio

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service the following year and an inheritance tax product the year after. Seneca launched the Manged Storage EIS in September of this year and plan to roll out further similar managed storage funds as premium sites are identified to justify the fundraise and to deploy cash in a timely manner. If all goes according to plan, a second similar fund is pencilled in to be launched in Q1 2017.

Regarding AUM, from a relatively small amount of AUM in 2012, funds have grown strongly since the launch of its first EIS fund in December of that year.

CHART 1: SENECA AUM GROWTH AS AT DECEMBER 06 2016


With the addition to its product range of an inheritance tax BR solution in 2014, AUM again rose strongly. AUM also benefitted from Seneca’s strengthening market profile; the firm successfully established itself, through its sales campaigns, as a regional alternative corporate financier and EIS provider. Its market profile was further enhanced by the publicity generated by the performance of its portfolio of AIM listings.

The chart below illustrates the breakdown by AUM of Seneca’s retail product range (“Others” refers to non-tax-advantaged, bespoke investments such as loan stock on large property assets):

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20

30

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60

70

80

2012 2013 2014 2015 2016 YTD

£ M

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CHART 2: PRODUCT BREAKDOWN OF SENECA’S AUM AS OF 6 DECEMBER 2016


We would expect Seneca’s AUM to continue rising in the foreseeable future thanks to the lack of strong competition from regional managers in EIS and the commitment of Seneca’s board to its ambitions to grow, as evidenced by the resources it allocates to the growth in tax-advantaged investments. To help maintain its AUM growth, Seneca has engaged additional salespeople to help the sales director cover a widening audience of wealth managers. In addition, Seneca has engaged the specialist marketer LGBR Capital since January 2015 to help raise assets.

In the last five years, Seneca’s fundraising has consistently met its campaign targets. Beginning with modest fundraising amounts in the firm’s first year of trading, fundraising has grown substantially year on year as the firm has established its regional presence and widened its product range. At the time of writing on 6 December 2016, Seneca had raised £14.7 million for its Portfolio Service and £4 million for the Managed Storage Fund, surpassing their £16 million target for EIS.

61%

29%

10%

EIS BR IHT Others

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CHART 3: FUNDRAISING TRACK RECORD


Seneca has a dedicated client relationship team at its Haydock office, which handles incoming queries from advisers and clients. Seneca has two field-based staff to visit advisers and high net worth investors at their offices and three dedicated customer service managers. IFAs can log in online and draw down a valuation statement for their clients, a feature not currently offered to clients because of compliance issues, Seneca states. Valuations of the portfolio companies are updated monthly; investors receive a six-monthly valuation statement on their investments, showing performance and corporate activity. For each deal, investors will receive a business summary of the rationale for investment. The Seneca website provides details of each portfolio investee company, with updated news flow and pricing.

We reviewed the Manager’s complaint procedure and found it robust and detailed. The Manager stated that to date it has not received a complaint that required escalation.

Financial & Business Stability As mentioned above, Seneca was founded in 2010 by five professionals, raising additional funds from personal contacts who became passive investors. Three of the five professionals formed the board: Ian Currie, Richard Manley, and Steve Charnock. No individual shareholder owns more than 13%, resulting in a shareholder base that is unlikely in the near future to be influenced by a small number of shareholders, and can operate relatively democratically. The directors also benefit from diversified revenue from other Seneca companies.

Revenue at Seneca can be grouped into two categories: fees and income derived from their tax-advantaged investments, and that derived from activities related to their corporate finance business and administration for other parts of the wider Seneca group.

As described to Allenbridge, a significant portion of Seneca’s revenue has historically been derived from initial fees levied for running its two discretionary EIS and Inheritance Tax (‘ITS’) services. The Manager, depending on the success of the EIS Portfolio Service, will be due to collect AMCs (capped at 4 years) and performance fees once hurdle rates have been met. However, as the majority of the holdings within the EIS Portfolio Service are within their 3-year minimum holding period, only the initial fees are included in the Manager’s accounts appended below.

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4

6

8

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18

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2012 2013 2014 2015 2016 YTD

£ M

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Seneca also expect fees derived from the Managed Storage Fund (2% initial fee from the investee companies and an AMC of the same amount) which, after capital is deployed, should bolster their balance sheet further.

The remainder of Seneca’s turnover is derived from activities relating to their corporate finance business and administration for other parts of the wider Seneca group.

Considering the summary accounts, total revenue increased significantly between 2014/15 and 2015/16 and into the first 10 months of 2016, pushing the firm into profitability, thanks to strong fundraising, which boosted initial fees, and corporate finance activity. Regarding the receipt of deferred fees, the EIS Portfolio Service’s portfolio of companies is still relatively young; however, a large proportion of the portfolio companies have listed on AIM, which may provide a prompt exit after the fourth year of trading through the liquidity of listed equities, and subsequent fee revenue.

TABLE 2: KEY FINANCIAL METRICS SUMMARY

(£'000) 7 months to

October 2016 To March 2016 To March 2015

Total Revenues 3,356 2,073 1,825

Pre-Tax Profit 654 245 473

Profit Margin 19% 12% 26%

Net Balance Sheet Assets 1,486 1,112 932

Debt to Assets 0% 0% 0%

Net cash flow from Operating Activities 1,053 745 194 Source: Seneca; AllenbridgeIQ Note: The figures above denoted the performance of the Seneca Partners Limited, excluding the subsidiaries

Seneca (as distinct from the wider ‘group’) could be vulnerable to legislative changes, since it relies to a significant extent on the revenues generated from tax-advantaged products. However, as mentioned above, the revenues generated from Seneca are smaller in comparison to the income generated by the wider group of Seneca-branded companies; hence, the impact of changes in legislation may be minimal. In this context, the Manager accounts for approximately 30% of the ‘group’ turnover.

The initial fees depend strongly on Seneca’s ability to fundraise; given its strong fundraising in 2015, record of year-on-year increase in fundraising, and strong fundraising this year to date, it is reasonable to expect that this is likely to be a relatively reliable source of income for the foreseeable future for reasons described above under Manager Profile.

One revenue stream that might be anticipated to strengthen is from exits from its Portfolio Service. Seneca will benefit from a performance fee triggered if its portfolio companies secure a positive exit for investors: Seneca will receive 20% of distributions made to investors on amounts above a hurdle rate of 109p per 100p share invested. As referred to above, many of the portfolio companies have listed on AIM which could theoretically result in the prompt payment of this bonus after the third year of trading since there is always a mechanism to sell listed equities. However, this does depend on the share price adequately trading at a premium to the Service’s buy price and currently several of the shares are trading at a loss to the price paid by Seneca’s investors. However, the potential for receiving performance fees is unpredictable, though the probability increases hand in hand with the maturity of the portfolio and size of the portfolio.

In summary, Seneca has demonstrated ample working capital to maintain its activities in the short- to medium-term, irrespective of whether it secures performance fees or initial fees on future

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fundraising. This is evidenced by its net cash flow from operating activities of £1.05 million as at the time of writing this report, up from the previous year.

It should also be noted that the Seneca ‘group’ is likely to provide the Manager with support in terms of staff and working capital if called upon. However, since three of the five affiliated companies are not controlled by Seneca but by common shareholders, it may not be enforceable and could also prove unpredictable.

The Manager operates from an office in Haydock. It employs 31 members of staff. It has plans to hire one more staff member as well as one more member of the Investment Team in Q1 2017.

Quality of Governance and Management team Within the limits of a relatively small investment firm, Seneca has put in place governance structures which are robust and defensible, through the use of four committees that detail process and allocate responsibility to individual directors: an Executive Committee which runs the firm, an Investment Committee which opines on all fund decisions, a Management Committee which effectively project manages, and a Compliance Committee which seeks to identify and address issues of risk and compliance. The minutes of the meetings are taken for all except the Management Committee, and we have seen examples.

TABLE 3: OVERSIGHT COMMITTEES Details

Executive Committee

Mandate: Manage, oversee and implement the daily strategic and operational activities of the firm

Members: All executive board members

Frequency: Quarterly

Management Committee

Mandate: Project management of all products

Members: Main directors plus heads of department

Frequency: Weekly

Investment Committee

Mandate: Oversee and ratify the daily and on-going investment/portfolio activities of Seneca Members: All executive board members plus senior investment personnel

Frequency: Monthly, or as and when required

Compliance Committee

Mandate: To review the daily activities of Seneca in relation to risk and compliance

Members: Compliance Director, Compliance Officer, CEO

Frequency: Daily


The Executive Committee deals with all decisions and considerations with regards to the running and direction of the firm. It sets the strategy, based on operational milestones, allocates resources, and rules on risk/compliance issues that have been escalated by the Compliance Committee. It reviews key personnel and writes the business plan to meet the firm’s ambitions. This Committee comprises of the three directors and the three non-executive directors. It meets at least quarterly; all three main directors must attend and decisions are arrived at with a quorum of four. We have studied examples of the minutes of these meetings which were detailed and apposite to the topics under scrutiny.

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The Management Committee sits weekly to deal with activity issues within project management including the allocation of resources available within the firm, dealing with staff issues, project analysis, and pipeline development. Taking a pragmatic approach, issues that can be resolved at this level will be. Decisions are arrived at democratically through compromise and agreement between the different divisions. If ratification at the executive level is required, issues will be escalated to the Investment Committee but normally points are resolved.

The Investment Committee is specifically comprised of individuals with expertise in EIS and early stage company investment (it is constructed differently for ones that monitor the inheritance tax service), and considers issues relating to the review and management of the Seneca EIS Portfolio Service’s investment policies, strategies, transactions and direction. It sets all aspects of the investment process, reviews existing investments and ratifies proposals of new ones. It reviews client portfolios, agrees valuations, and considers offers to exit proposed by its portfolio companies. The Investment Committee comprises the board directors plus the senior investment personnel. It meets monthly or as required. Should any member of the Investment Committee be unable to attend a meeting, their views will be sought in advance and conveyed during the meeting. The Committee may invite other members of the Advisory Partners Network to join the committee on an issue by issue basis, where it is believed their input and involvement will be beneficial. The Advisory Partners Network comprises successful entrepreneurs, business owners and senior-level executives with whom Seneca has established longstanding relationships. The Manager informed us that Nick Leitch, who was one of the Investment Committee members, left Seneca recently and no replacements will be sought. Bios for the Investment Team and key Seneca Directors are shown in Appendix 1.

The Regulatory/Compliance Committee opines on ongoing risk mitigation issues, the firm’s compliance monitoring programme, client issues including money laundering checks, and suitability and appropriateness checks. The firm’s CEO, compliance officer and compliance manager meet daily to discuss regulatory and compliance issues, generally with regards to individual client checks and the information that clients are receiving. If any issue is outside their knowledge base, they will seek third party specialist advice.

Seneca has a corporate finance team that specialises in raising capital for EIS-qualifying companies. This could give rise to a conflict if the service was to invest in these deals. This side of the business is called Acceleris and focusses on earlier stage businesses, so there is little crossover between the two.

In terms of Allocation Policy, very rarely more than one Service/Fund controlled by Seneca and its affiliates may invest in the same company. In terms of allocation within the portfolio, as over £4 million was raised prior to getting Advanced Assurance (and, therefore, capital deployment), investors will get a share in both companies.

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Product Quality Assessment

Investment Team Seneca intends to involve five investment professionals in actively running the Fund. Three of the five, being the directors and founders of the firm, have worked together or known each other for at least five years. Unlike the Seneca EIS Service reviewed in September, Acceleris Capital do not play a role in this particular Investment Team. All members of the team have knowledge and expertise of investing in SMEs and EIS.

With a large and experienced Investment Team, and the wider support of personnel from the Seneca ‘group’ if needed, the Fund seems insulated against the need for additional personnel and to mitigate against key man issues; we conclude that the team is appropriately qualified and has relevant expertise to run the Service’s mandate with no key man issues apparent.

Two Directors have made personal investments, on the same terms as investors, which provides some alignment of interest. Between them they will hold between 2% and 4% of the shares in the Investee companies. The individuals concerned are not on the board of the Investee companies or SureStore.

The bios of the key investment professionals are presented in the Appendix to this report.

Operating Team

Surestore Storage Ltd (the “Operator”) are responsible for the delivery of the business plan. The management team (bios listed in the Appendix) have roots in the Midlands and the North, and have a lengthy history in the managed storage sector. Seneca stress the team’s past experience in pre-marketing to drive occupancy rates from the firing of the starting gun on the investment, with ramp-up of occupancy rates being crucial to the investment’s success.

The Investee companies will pay the Operator a £25,000 initial fee for each site purchased and a £50,000 annual fee per site for the provision of services. These are modelled to meet legitimate business expenses for specific necessary services rendered that the investee companies would either have to deliver themselves (by employing additional staff to fulfil them) or by paying a third party such as SureStore. The fees are capped.

Seneca came to their relationship with Surestore due to a previous relationship with Smart Storage, whom Seneca has 90% equity in and has provided debt financing to. Mike Wilson, the CEO of Smart Storage, will lead the operational and strategic direction of the Fund’s investee companies. He will be joined by Andrew Wood, who will lead the acquisition and development of the new storage facilities. Their bios and skillsets lend themselves well to positively influencing the key variables that will make the trade a success or failure.

The terms of the investment accentuate the incentives of the operator to reach profit milestones above the 99.99% return to investors into the range where the operator takes 80% of the upside, as this rebounds to Seneca’s financial benefit also. In terms of the overlapping membership of both Smart Storage and Surestore, Seneca have provided their extensive Conflicts Policy, which provides reassurance, alongside the fact that the Operator would only get remunerated in the case of meeting the milestones set. Therefore, we should expect Seneca to be particularly motivated overseers of the operating company in terms of delivering the promised performance albeit there are a number of foreseeable scenarios whereby the motivation of the operator will be very different from that of investors.

Seneca confirm that the investors would have the right, if it so chose, to replace the Operator with another firm (albeit this would require a level of investor activism which is rare). Seneca have the

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right to appoint an independent director and, whilst one has not been appointed at this stage, this is currently under consideration.

In May 2014, Mike Wilson, backed by Seneca Partners, led a Management Buyout (“MBO”) of Smart Storage Limited. At the time of the MBO, Smart Storage consisted of five sites across the Northwest. During 2014 and 2015 a thorough review took place on the status of the sites under management and new investment and policies aimed at improving operational efficiency were put in place. Subsequently extensions to two properties, Widnes and Liverpool, have taken place, and a new facility at Altrincham has been established. In the past 12 months, like for like growth in occupancy across the original five stores is 25% with revenues up by 14%. Management stresses their performance since the MBO, as well as the lessons learned from extensions and site acquisitions since, as key reasons to believe that they can meet, and exceed, what they feel are conservative occupancy targets for the sites in the Fund.

Investment Strategy & Philosophy We understand that the Fund will invest in two investee companies, each trading in the managed storage sector. Each company will develop two managed storage sites. Each site will broadly have 40,000 to 50,000 sq. ft. of lettable space and are modelled to cost an average of c. £2.5 million per site. The builds are fairly straightforward and Seneca reassures that they have a contractor lined up with whom they have worked in the past. Andrew Wood of Surestore, in particular, has been responsible for the design and build, project management, sales, business marketing and strategic planning for over 100 storage centres, so is well-placed to oversee the build or refurbishment of the proposed sites.

The business plan is to set up and run these sites for a four-year period, then sell them to a larger trade consolidator (or a more general trade, PE buyout or perhaps even a management buyout). The Fund provides investors with the ability to benefit from both the tax reliefs available under EIS and the underlying asset value represented by the freehold or long leasehold managed storage facilities.

Seneca Partners have been invested in the storage sector since 2014, working alongside the management team who are responsible for managing their current portfolio of storage assets. This team have identified the opportunity to acquire a number of freehold and/or long leasehold storage facilities to further expand the estate of storage assets that they manage under the name ‘SureStore’. The individuals behind SureStore have over 45 years’ experience in the storage sector.

The primary objective of the Fund is capital growth with the investments into companies which can launch and ramp up square footage quickly as sites develop, while protecting downside risk with the asset-backed nature of the investment, coupled with the tax relief.

The Fund has a target return of 1.2x (before tax relief) the amount used to purchase shares in the investee companies with the fourth anniversary being the target exit date. Investors will receive 99.99% of any return up to this target amount. If the return exceeds that target, Investors will receive a further 20% of any excess, with the remainder shared between SureStore as a “catch up” position and the Fund Manager. This reward structure is designed to incentivise all parties to ensure that the storage centres achieve (or exceed) their business objectives but investors should bear in mind that the incentive might also serve to provide reason to boost those companies that have potential to reap ample performance fees while providing less reason to spend time buttressing those performing less impressively, or seeking to delay an exit for those around or below the performance threshold so as to facilitate a price above the hurdle rate.

The investors will own all of the A class shares in one or two investee companies which, in turn, will own up to four storage sites between them. Investors therefore have the asset-backing of the land and building. The sites have been chosen on the basis of being assessed as excellent sites for

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managed storage facilities but also for a number of other potential uses. This latter point adds the potential for additional protection for investors, as should a storage facility not prove profitable, the site can be sold to a variety of interested parties.

The key variables in assessing whether the fund can reach their target return can be summarized as the following:

Site selection in areas of pent-up demand with too little competition to mop it up;

Site builds within cost projections;

Operator efficiency in terms of driving occupancy and meeting price/square foot projections; and

Securing one of the projected exit routes (competitor consolidation, private equity purchase, or a management buy-out).

Site selection will be carried out after due diligence by both SureStore and re-modelling and assumption interrogation by Seneca. The key elements in the assessment included a regional market focus (a regional footprint makes it more attractive for potential acquisition down the line and allows for easier monitoring of company operational performance), close to densely populated areas (‘chimney pots within X miles’), on or near arterial routes, low or no competition, the potential for meeting size target for capacity between 40,000 and 50,000 sq. ft., and the possibility of multiple use (in order to hedge possibilities for exit routes). Three identified sites have so far met the requirements of both SureStore and Seneca - in Cheshire, Staffordshire, and Greater Manchester, with a fourth site yet to be found (although apparently under negotiation). In terms of whether there was an allocation conflict between Seneca’s private equity arm and the proposed Fund, the PE fund is closed to new investment and not seeking to procure anymore sites. Seneca have commenced seeking an exit for the sites they have.

In terms of Smart Storage’s track record in site selection, it is important to look at the results achieved since the management buyout (“MBO”) of the current team. After the MBO in 2014, management performed a thorough review of the business, including an assessment of the prospects across the estate at the time. This resulted in an expansion of capacity at the Widnes and Liverpool sites and, in May, the opening of a new Altrincham site (of a similar size to those proposed for the branches in this Fund).

The Altrincham site is held up as a useful case study of a similar project to those set to be undertaken and as proof-of-concept. With 43,000 sq. ft. of Maximum Lettable Area (MLA), it is a site which falls between the 40,000 - 50,000 sq. ft. range for the proposed sites. Despite being operational for less than sixth months, the Altrincham site has already recorded a profit as its occupancy rate 40% of MLA, ahead of the assumptions in the base case model supporting the Seneca Managed Storage EIS Fund (below), which assumes breakeven after 3 years. Management assert that the Altrincham experience speaks most readily to the success of site selection which emphasised the level of local competition, demographics, and transport links, amongst other factors.

In addition to Smart Storage’s experience with site selection, Andrew Wood also has extensive experience in this regard and knows Cheshire and Staffordshire geographies particularly well, including being a Board member of South Cheshire Chamber of Commerce and Industry.

Seneca confirmed to Allenbridge that all site acquisitions, builds, and extensions have been completed within cost projections, which should give reassurance to Investors on this point.

The third key factor in assessing the likely success of the Fund is the ability to drive occupancy rates to profit on schedule. Here Seneca points to rising demand for managed storage as a macro

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factor, citing Cushman and Wakefield’s 2016 industry survey1 which showed occupancy up 4% on the previous year to 73% overall, with demand outstripping available supply as online trading, business rates, and overheads drive demand still higher. Mitigating the risk of property values, managed storage grows more quickly during recessions as households change rapidly and microbusinesses are started for incremental income.

As well as the parallels evinced from the Altrincham example, Seneca point to the example of their Bromborough site as showing that occupancy rates can successfully be driven once a site is established, and not just from a low base. Bromborough had a 66% MLA at the time of the MBO, but has seen this figure increased to over 82% in the 8 months to August 2016 (the base model assumes a circa 79% MLA at the end of Year 5) based on a smaller lettable area.

This occupancy rate has not been driven simply by cutting margins, with net operating income significantly above the level assumed in the Year 5 plan (the plan for the proposed sites can be seen in the diagram below).

Source: Seneca

While exact occupancy stats on other sites are commercially sensitive and therefore not publishable here, Allenbridge have seen the statistics for Preston, Widnes and Liverpool and feel that the projected occupancy rates for this opportunity are certainly deliverable in light of the team’s previous experience.

The last key factor is the potential for exit in a timely fashion, with the Fund targeting a Year 4 return for investors. Here we can look at both the macro picture of the sector as well as Seneca’s track record within the sector.

While a smattering of names in the storage sector might come to mind, the sector as a whole is ripe for consolidation with no one firm having a dominant position and many players operating in different regional markets throughout the country. Seneca’s position is that a regionally-clustered, profitable company, with upside growth likely, will make for a compelling takeover target for a competitor, private equity company, or even a management buyout. Seneca estimates that similar acquisitions have seen a multiple of 8x Net Operating Income (“NOI”) as a price benchmark which means that a sale at the end of Year 4, assuming the model’s NOI of £400,000 per site, would be in the range of £3.2 million (a circa1.215x uplift for investors without consideration of tax relief). If the 1 http://www.cushmanwakefield.co.uk/en-gb/research-and-insight/local-reports/

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59

Monthly Occupancy

Occupancy Available

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operator can drive NOI higher than the estimates in the model, then the operator will get 80p for every additional £1 generated by the Fund, serving as a good incentive to reach the level given in the model at the very least. A higher NOI would also, of course, make the sites more attractive to any potential buyer.

This is buttressed by Smart Storage’s own history with site development and exits. Andy Wood has exited 3 previous storage businesses; 2 in the UK and 1 overseas. The most recent example is that he has sold Storage Boost Chester to Storage King. Seneca confirms that the sale price achieved was in excess of 8x NOI and investors received a return that would have been in line with the objectives of the Managed Storage EIS Fund.

Seneca have, of course, been involved in the managed storage sector for some time but have not yet found an exit attractive enough at this point. Seneca, however, were keen to reassure that this was not for lack of interest but a question of generating optimal value under a different strategy. As such, SureStore’s ability to generate an attractive acquisition target through a high NOI, the dynamics of the market as a whole, and Smart Storage’s own history of exists, are the strongest claims to Investors that a timely exit at the right price is both possible and likely.

One of the theoretically possible exit routes is a management buyout, but it is not a proposed exit route. In terms of managing any potential conflicts, Seneca’s Compliance Manager is charged with overseeing an exit that does not benefit Seneca to the detriment of investors. Indeed, a part of any exit (including a proposed management buyout) would be the requirement for independent valuations.

Pipeline/Prospects and Current Portfolio The Fund’s management team has already reached ‘heads of terms’ in relation to the first three target sites in which the Fund is looking to invest. The fourth site is at an advanced stage of negotiation and should be announced in the not-too-distant future. Investor funds should be deployed quickly now that Assurance being received. Current projections are that four sites are the most likely to be the only ones in the portfolio with any new managed storage sites being part of later fund compositions.

Investment Process In terms of the Managed Storage EIS Fund, Seneca have followed their usual process when approving the managed storage concept as an acceptable asset class for investment. Their process consisted of the following stages:

Stage One consisted of producing a summary of the potential deal including key features, market analysis, possible entry price, exit strategy, potential returns and key Due Diligence issues. These initial high level findings were discussed with the senior Seneca Partners team and they gave preliminary agreement, allowing the opportunity to move to the second stage of due diligence.

Stage Two consisted of a more detailed investigation of the investment opportunity, preparation of an investment paper supported by applicable DD findings (including legal, commercial, management and financial), finalisation of the deal structure and agreement of terms.

Stage Three consisted of those findings being presented to the Seneca Investment Committee and their approval was then sought. (Approval must be majority-supported, but, in any case it is unlikely that any acquisition would be made with any dissension).

At this point, the approval given was for the proposal as a whole. Individual sites could not and cannot be purchased without a further due diligence work being completed on each site. The next

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stages of the process are as follows and apply to each storage site which is being considered for purchase:

The management team within Seneca’s Operating Partner actively look for potential sites, both on-market and off-market. Individually, they receive leads and market intelligence from a number of sources within their respective networks and proactively approach landowners where a potential site is found. Having established a site’s potential and indicative purchase costs, a summary is prepared and submitted to the wider management team. This précis outlines the potential costs, identifies occupancy potential, offers market analysis (including alternative uses), suggests a possible entry price and exit strategy and forecasts potential returns.

If the management team ratifies a proposed site, due diligence is undertaken on the opportunity, resulting in a detailed paper containing legal, planning, operational, strategic and financial findings along with a business model and valuation for the proposed site. The deal structure and proposed terms are also set. The management team then reviews the proposal, ultimately leading to a final decision as to whether to present the proposal to Seneca’s Investment Team for approval.

Assuming that is the case, the proposal and site model being ‘packaged’ is presented to Seneca’s Investment Team. They will analyse the proposal and site model, ensuring that the proposed site fits the previously agreed overall business plan and costing parameters and that it should meet Seneca’s investment mandate for Investors. Assuming that the proposal is in order, Seneca then authorises the completion of the site purchase.

Seneca have in-house property, corporate and finance teams who have the necessary experience to provide robust valuation appraisals. Specialist, outside or third party support is sought if required or more appropriate.

Post the deployment of capital, Seneca will take observation and information rights on the investee company boards and have the right to appoint someone to the Board. Post-investment monitoring involves regular updates from the Fund Manager to the Investment Committee. Management information is reviewed on a monthly basis, taking remedial action on any underperformance and managing alignment to the exit strategy. When an exit offer is presented, the entire process is repeated before any sale is agreed or completed.

Two Directors have made personal investments, on the same terms as investors.

Risk Management Seneca stresses the risk mitigation value of providing portfolio companies with ongoing support, and added value during their important growth stages, and the monitoring of each company from their board downwards. Hence, monitoring by a board position or observer rights are stipulated at the outset, carefully watching to see that milestones are met. Through its monitoring role, Seneca will watch for threats to revenues such as the loss of major customer, or disruptions to the management team, supplier issues that could disrupt production, or regulatory change raising production costs. All such issues would instigate a more formal review of the investment. Seneca emphasise the clear milestones and “train tracks” of the rate of increase of occupancy rates, for example, and monitor that each site would stay within the parameters set for each to hit the targets set for them. Any drop below target occupancy rates would trigger a deeper dive into causes and potential remedies.

To protect against EIS-qualification issues, advance assurance from HMRC has been obtained for Portfolio Companies prior to investment.

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Seneca will seek to protect itself against boards acting outside the interests of its investors by asking for written shareholder agreements and may receive such preferences or rights as can be received under the EIS rules, where applicable.

As the investee companies will be unquoted, Seneca’s policy is to value them at cost unless there is reason to show them as impaired or have undertaken a second round of fundraising where the due diligence completed provides evidence of a different value. In terms of cash management, Seneca uses a custodian - the Share Centre PLC.

Cash balances held on behalf of investors are deposited with an authorised banking institution in a pooled account in the name of the custodian under customer trust status. Individual records of investors’ assets are recorded by the custodian on their internal system.

Key Features There are little upfront fees for investors- a 0.35% entry and exit fee to the custodian and a £25 (+ VAT) fee per holding- with a 2% +VAT initial fee from the investee companies and a yearly 2% Annual Management Charge (AMC) also charged to the investee company. The target return of £1.20 per £1 (equivalent to c.1.7x including tax relief) might seem fairly modest, but investors should expect 99.99% of everything up to that level and 20% of any outperformance above that target. The 80% accruing to SureStore might seem generous but can also be seen as a large incentive to rapidly generate the promised occupancy rate and more, while one should also bear in mind the probable ceiling on possible profits with maximum square footage and £/sq. ft. limiting the possibility of huge returns for the operating company. The upside picture should also be juxtaposed with the limits on the downside: even if the managed storage trade is unsuccessful, the combination of tax relief and land sales puts a pretty firm floor under the potential for losses

The following fees (number 1-4) describe the fees directly payable by the investors and the product fees (number 5) incurred by Seneca.

1. Initial and Ongoing Fund Management Fee

TABLE 5: FEES PAID TO THE MANAGER

Initial Fees (Fund Setup Fees) Ongoing Annual Management Fees Fees paid to Custodian

2% 2% 0.35% entry/exit plus £25+VAT annually per holding

Source: Seneca/AllenbridgeIQ

The annual management fee is calculated based on the investor’s original subscription, net of the Custodian fees deducted at outset. The annual management fee is paid by the investee companies.

2. Early bird fees and other discounts There are no early bird fees offered from this Service.

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3. Subscription/Application Fees

TABLE 6: SUBSCRIPTION/APPLICATION FEES

Type of Investor Initial Application Fee (and initial commissions/initial adviser charges)

Ongoing management charges (and ongoing commissions/ongoing adviser charges)

Direct Application (investors who make an application, without using a financial advisor or ‘execution-only intermediary)’

2% paid by investee companies 2% paid by the investee companies

Application through an adviser (investors who make an application through a registered financial adviser with an ongoing fee)

5% (with the 2% initial fee paid by the investee companies and

the 3% advice fee paid by deduction from the investors

subscription)

2% paid by investee companies. (No ongoing advice fees can be

facilitated)


4. Performance Fee

The investee company charges a performance fee of 80% on capital returns more than 1.2x of capital invested per investor. While this seems like a stiff performance fee above what could considered a moderate return for an EIS fund, it is structured this way, the Manager argues because of the moderate risk and likely ceiling for this kind of asset-backed EIS opportunity. The Manager’s view is that the practical limits on what can be charged for square footage, and the physical limits of the sites themselves, there is a soft ceiling on how much profit can realistically be made. Therefore, a higher percentage of the remaining possible upside, after the return to investors, must be allocated to the investee company, it is contended, in order to properly motivate outperformance.

In our view the performance fee creates the potential for some scenarios where the interests of the Manager differ from those of investors. The performance fee is charged per investee company, rather than for the fund overall, which further limits the possibility of large returns typically associated with higher risk propositions.

5. Product Fees

The detailed fees are listed in the following table.

TABLE 7: FEE DETAILS

Fees Details

Entry/Exit Fee (charged by the Custodian) 0.35%

Annual Management Charge 2% (paid by investee company)

Seneca’s initial fee 2% (paid by the investee company)

Directors’ Fees 0%

Excluded Costs 0%

Historical Cap Costs 0%

Recent Running Costs 0%

Running Costs 0%

Annual administration fee (charged by the Custodian)

£25+VAT per holding


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Performance As the Fund has not yet deployed any capital, it has no current performance data to judge the soundness of the strategy. As such, Investors would do well to interrogate the fundamentals of the proposed trade and look to Seneca’s own track record in both the managed storage and EIS space. This report looks at the main variables that will determine the trade’s success in Investment Strategy & Philosophy, and looks at the past performance of Seneca in both the managed storage, and the EIS space, in Track Record. Past performance does not guarantee future success, as we are often reminded, but the soundness of strategy and capacity to execute is undoubtedly an Investor’s best guide to the attractiveness of the current offer.

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Appendix 1: Key Personnel Key Investment Professionals

Name Job title Date started Biography

Ian Currie Director 2010

Ian qualified as a chartered accountant in 1986 with KPMG and has been involved in corporate finance with Peel Hunt & Co, Apax Partners & Co and Altium Capital. He co-founded Zeus Group and at the point of demerger in 2010, the Group had over £350m of assets in a variety of businesses, including corporate finance, private equity, stockbroking and pension administration. Ian sits on the board of Hedley & Co Stockbrokers, is a founder and majority shareholder of Liberty SIPP, is a partner of Palatine Private Equity LLP and is on the board of trustees for the Lowry Arts Centre in Manchester.

Richard Manley Director 2012

Richard qualified as a chartered accountant with KMPG in 2003. He worked for KPMG for over five years, initially in their audit business and latterly in their corporate recovery division working on financial and operational restructurings and formal insolvencies. In 2007, Richard joined NM Rothschild’s leveraged finance team in Manchester before joining Cenkos Fund Managers in June 2008. Richard holds a BSc (Hons) in Mathematics from the University of Birmingham.

Steve Charnock Director 2011

Steve qualified as a chartered accountant in 1986 before joining Charterhouse Securities as a building and construction analyst, later becoming a managing director and head of research. He was voted number one construction analyst in 2000 and 2001 in the Reuters survey for UK smaller companies. Steve set up a consultancy in 2003, co-founded Cenkos Fund Managers in 2007 and sits on private and public company boards. Steve has managed investments of over £100m into UK SMEs over the last 10 years.

Norman Molyneux Director of Acceleris Capital

2012

Norman is a director of Acceleris Capital Ltd, a subsidiary of Seneca Partners Ltd. He qualified as an accountant in 1981. Since then, he has worked as a management consultant for Price Waterhouse and has held board positions in manufacturing companies. In 2005, he completed a master’s degree in Finance and Accounting and he is FCA-approved. Norman founded Acceleris in 2000. Norman has been advising and securing funding for high growth companies for the last 15 years.

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Tim Murphy Head of Private Equity 2010

Formerly of Deloitte, Tim was Jt MD RBS Corporate and Structured Finance. Set up the National Debt Advisory business. An ex-Founder Partner of NorthEdge Capital, with a focus on stressed corporate opportunities. Tim sits on the valuation committee of a major US special situations hedge fund.


Directors Ian Currie

See above

Richard Manley

See above

Steve Charnock

See above

Members of the Investment Committee Tim Murphy

Tim is a Director of Seneca Banking Consultants Ltd. He began his finance career with Barclays in 1983 where he undertook corporate and credit roles, before joining County Natwest in 1990 where he worked in structured and acquisition finance. In 1993, Tim joined the Royal Bank of Scotland’s fledgling acquisition finance business, initially establishing the Leeds office. He was subsequently responsible for all UK regional teams before, in 2002, founding RBS Corporate & Structured Finance. As joint managing director, he had responsibility for the national mid-cap structured finance business, whilst being a member of the Banks Corporate Credit Committee. In 2005, Tim joined Deloitte (Manchester) as a corporate finance partner to establish the National Debt Advisory business, advising on capital raising and stressed debt refinancing. After a successful spell, he joined HBOS as UK Managing Director, Large Corporate in 2008. Tim joined Seneca from NorthEdge Capital, where he was a founding partner. Tim’s investment record includes working on an EIS investment into a specialist healthcare manufacturer WS Rothband and the MBO of rented storage company Smart Storage.

Norman Molyneux

Norman is a director of Acceleris Capital Ltd, a subsidiary of Seneca Partners Ltd. He qualified as an accountant in 1981. He has worked as a management consultant for Price Waterhouse and has held board positions in manufacturing companies. In 2005, he completed a master’s degree in Finance and Accounting and he is FCA-approved. Norman founded Acceleris in 2000. He has been advising and securing funding for high SME for the last 15 years.

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Management Team of SureStore Storage Ltd

Name Job title Date started Biography

Mike Wilson CEO 2007

Mike qualified as an accountant in 1999 and subsequently gained extensive experience of general and strategic management across a range of businesses. He has start-up and turnaround experience not only in storage but in a number of other sectors including healthcare, property, mezzanine finance and technology. After joining Smart Storage in 2007, Mike spent his first six years as CFO developing the growth of the business. In 2013, Mike became the CEO of Smart Storage, replacing one of the founders, and then subsequently completed a management buyout of the business with funding from Seneca Partners in 2014. Mike was appointed to the board of the Self-Storage Association UK in 2015 as a representative for Independent Operators. Mike will lead the operational and strategic direction of the Fund’s investee companies.

Andrew Wood Director 2012

As European Sales Director for a storage construction company, Andy was responsible for the design and build, project management, sales, business marketing and strategic planning for over 100 storage centres. Andy co-founded Planet Space Storage in 2003 in Mallorca and developed it to a position of market leader. Andy co-founded Storage Boost in 2005 and operated three storage facilities in Cheshire and Staffordshire. He is active in the European storage industry as a consultant and investor and has extensive experience of operating and constructing storage facilities. Andy will lead the acquisition and development of the new storage facilities for the Seneca Manged Storage EIS Fund.

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This report is published by Allenbridge Limited. It is normally available to Professional Advisers by private subscription.

Allenbridge Limited 2017

8 Old Jewry, London EC2R 8DN Telephone 020 7079 1000

Allenbridge is a trading name of Allenbridge Limited which is incorporated and registered in England and Wales - Registered number 07435167 - Registered office 8 Old Jewry London EC2R 8DN Allenbridge Limited is an appointed representative of Allenbridge Capital Limited which is Authorised and Regulated by the Financial Conduct Authority.

NOTE: Readers should note that investment in a Venture Capital Trust, BR IHT or EIS carries a greater risk than some other investments, there is unlikely to be an active market in the shares, which will make them difficult to dispose of, and proper information for determining their current value may not be available. Prospective investors are strongly advised to consult their professional adviser about the amount of tax relief (if any) they can obtain. Although we have taken reasonable care to ensure statements of fact and opinion contained in this document are fair and accurate in all material respects, such accuracy cannot be guaranteed. Accordingly, we hereby disclaim all responsibility for any inaccuracies or omissions, which may make such statements misleading, and for any consequence arising there from. While reports in this publication may make specific investment recommendations, nothing in the publication enclosed with it is an invitation to purchase or subscribe for shares or other securities.

The Seneca Managed Storage EIS Fund January 2017 · the managed storage sector, and evidence...

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