Deepbridge’s Warwick: Britain is full of investable innovation

Warwick Ian Deepbridge Capital 2015In Bill Bryson’s latest book he refers to a Japanese report that concluded 55 per cent of ‘significant’ inventions since the Second World War were created by the British, compared to 6 per cent by the Japanese and 21 per cent by Americans.

We should of course be aware that statistics can often be misappropriated, but the overarching sentiment is that for a small island we have an unbelievable track record of inventing ‘stuff’.

I’m (un)fortunate enough to be on the mailing list for just about every ‘alternative’ investment proposition that is launched and it strikes me that there is little that offers investors the opportunity to invest in UK innovation. You can invest in wine, Indian solar farms, African water treatment plants, stamps or classic film posters.

The abundance of crowd funding opportunities are apparently an opportunity for many investors to seek innovative companies but when it comes to opportunities offering investors a portfolio approach to investing in innovation there is limited choice in the market. For those investors relying on opportunities presented by their trusted financial adviser, there are few options.

When considered that last year venture capitalists poured a record $2.28bn (£1.56bn) into the tech scene in London alone, according to data from London and Partners, the Mayor’s promotional company, perhaps financial advisers should be considering the growth opportunities available to appropriate clients?

It is a well broadcast opinion that ‘Britain no longer makes anything’. While it may be considered that our motoring industry is now a flat pack version of what it once was and the industrial mills around my hometown of Wigan are now either flats or retail complexes, it should be noted that the number of small businesses being created in the UK each year has continued to grow for some considerable time.

There are growth opportunities in the UK. Suitable investors looking to support and potentially benefit from these opportunities should consider the underlying investments within a packaged portfolio and understand the investment rationale of any investment manager within this area.

Most propositions within this market utilise tax reliefs to incentivise investors and this is why the Government introduced the likes of EIS, SEIS and business relief. The trick for an investor is to spot the investment managers committed to helping innovative companies grow, compared against those which are purely offering a proposition where the tax reliefs are the sole, or primary, reason for investing.