Alternative Investment Fund Manager, Innvotec Limited (Innvotec), has launched its Female Ventures Fund (FVF) to invest exclusively in UK female founded or co-founded enterprises. Innvotec also aims to encourage more women to invest in start-ups and early stage businesses.

Less than 1% of VC investment goes to all-female founded enterprises[1]. The FVF aims to tackle this funding gap by focussing on carefully selected, early-stage businesses founded and co-founded by women. Innvotec will provide initial capital, followed by further financial and advisory support to further development after the early stages and beyond. It will focus on capital growth in the long term, making the journey with its portfolio companies over a period of typically 10-12 years, supporting the entrepreneurs from origination to establishment and beyond.

As an (S)EIS open-ended fund, the FVF was created with the express intention of also encouraging more female investors into the VC space. It is aimed at retail investors as well as high-net worth individuals.

The FVF Advisory Board is led by Lesley Gregory, an experienced corporate lawyer and the Chair of law firm, Memery Crystal. Lesley specialises in flotations and secondary capital raising, as well as advising growth companies on alternative forms of raising finance. One of only two lawyers (and the only woman) ranked as an Eminent Practitioner for AIM companies by Chambers UK, Lesley is also one of only a handful of women top-ranked for Corporate and M&A: Mid-Market.

Lesley was previously an advisory board member for E2E Exchange, an established community of over 25,000 entrepreneurs and investors, which brings its members together from across 51 sectors and provides entrepreneurs with support, networking, and access to mentors and inspirational speakers. She also founded Memery Crystal’s successful female entrepreneurs’ Women In Business network.

Lesley Gregory, Chair of the FVF’s Advisory Board, said:

“For every £1 of venture capital investment in the UK, all-female founder teams get less than 1p, while all-male founder teams get 89p. This statistic is not new and yet it is, nevertheless, staggering to me. What is more obvious is that it must be addressed. In my profession, I come across a wide range of female entrepreneurs who have solid business models and yet don’t receive the funding they need. We want to change that. The FVF model will provide, not only funding, but also, support in critical drivers of VC success – networking, negotiation, business planning and mentoring.”

“As well as investing in female-led businesses, the fund is designed to encourage more women to become investors and back female led businesses.”

The FVF portfolio will be sector agnostic and initially will be comprised of companies selected from Innvotec’s existing portfolio, which contains more than 35 female-founded companies, including:

The Worldness: an e-commerce platform of customisable solutions for retailers getting back on their feet following the COVID-19 lockdown.

TRUEinvivo: a cancer research firm which has developed an automatic calculation system for administering appropriate drug dosage during radiotherapy.

U-Floor Technologies: a Greentech company that produces an IoT-enabled smart home solution to tackle fuel poverty and climate change.

Green Sea Guard: a shipping emissions monitoring system, with a mission to drive down the maritime industry’s impact on the global climate.

Tengri: the producer of Noble Yarns® and fabrics, pioneering ancient natural fibres, sustainably sourced with transparent supply chain provenance from remote parts of the world

Compare Ethics: a marketplace for sustainable fashion brands which prioritise fair wages, treatment of animals and the environment.

The fund is managed by London-based Innvotec, an independent AIFM that already has 25% of its portfolio dedicated to female-led companies, more than double the industry average of 12%. One of the UK’s longest established and independent firms, Innvotec focusses on private equity and capital appreciation.

Lesley added:

“I’ve known the new management team at Innvotec for a number of years. Innvotec have experience in selecting and successfully aiding female entrepreneurs, and coupled with our Advisory Board, which is comprised of female Founders, CEOs, Chairs and Board members from across the sectors of corporate finance, investment, fashion, technology and real estate, who are all passionate about helping female entrepreneurs to flourish, I think we can do great things with this new fund.”

Amir Kazmi, CEO of Innvotec, said:

“We’re extremely pleased to launch this fund with such a prestigious advisory board – it has been a long time in the making. The fund is very well-positioned to assist growth in the medium to long term by providing expert advice alongside new equity. The objective is to maximise returns, achieving significant capital gains across the portfolio and, ultimately, make a positive, measurable social impact.”

COULD the coronavirus pandemic spark a financial crisis similar to that which was seen in 2008? Tim Kirby, Group Commercial Director of the global fintech Monevo, a personal lending marketplace and platform, discusses how Covid-19 could play out for lenders.

The 2008 financial crisis, explains Kirby, was about credit over-exposure. While strains are apparent in the money markets today, it is not 2008, when risky mortgage investments in the US banking sector and into the UK caused everything to collapse.

Kirby said:

“The financial crash was self-inflicted for many reasons, including poor income verification, poor credit quality assessment and poor employment verification (self-certification). It was asset-backed predominantly as it was led by sub-prime mortgage lending.

“My thoughts are that once the virus is contained, the economy will most likely turn back on within a few months, however recovery to current levels will be somewhat longer.”

Kirby predicts that it is very possible this downturn will be shorter than the 2008 financial crisis based on a number of factors.

He said:

“The financial crash was either at a house purchase level or encouraging debt consolidation through re-mortgaging that placed unsecured debt into secured debt over a longer term. The consumer then ramped up unsecured debt again with the same poor assessment applied and eventually ran out of headroom.

“This was propped up by the capital markets and warehouse funding lines being supported through securitisation models that rated the loans held in the bonds as AAA.”

Kirby adds that the coronavirus outbreak is more micro and consumer-led than the recession was.

“There is still a great deal of uncertainty, but consumers are certainly going to experience affordability difficulties in the short-term, perhaps three to six months,” Kirby explains.

“Lenders are already tightening their criteria and that could lead to more tactical initiatives being introduced.”

Kirby points to the potential introduction of black-listing certain occupation types most affected, and reducing opening balances to applicants that they are most prepared to lend to.

He said:

“At Monevo, we have been speaking to lenders who are predicting a 50% slow down, with some pausing to assess short-term strategies, as clearly there are aspects of credit / risk scorecards that aren’t working at the moment.”

Kirby also adds that access to capital markets will be a challenge in the short term:

“Lenders who don’t lend off balance sheet may become constrained and you would have to question the Peer-to-Peer lender impact as the returns and appetite of investors could be under threat.”

“Additionally, those lenders nervous about funding certain cohorts of consumers, now have those very same consumers currently in their loan books. 

“So, for lenders, focussing on forbearance and other support activity to protect these consumers in the short term of 3-6 months, will be a priority.

Kirby takes the view that it is important lenders relieve some repayment pressure from consumers in the short term, so they can rehabilitate when the new normal arrives. 

“Lender feedback in the last week is that they haven’t seen a massive increase in defaults, it’s very early days though. Anecdotal feedback from lenders that are strong and well-funded is that they expect strong growth when the market returns, and that those who are optimised and agile will see an upswing. 

“What I am hearing, is that consumers will remedially seek liquidity through debt, as the world normalises to address the short-term pain being experienced at present.”

Kirby adds that lenders who look at credit risk closely when the upturn comes in three to six months could see dramatic growth, albeit from a reduced base.

He added:

“From Monevo’s perspective, day trading is difficult to predict and lenders are re-assessing short-term strategies.  We are using the time at present to apply additional focus on our internal tech pipeline in driving the product development roadmap forward to continue to deliver great solutions for our partners.

“We want to ensure when normality returns and the upswing in both demand and supply inevitably happens, that we are supporting our origination partners and the lenders on our panel as effectively as possible.”