Parkwalk Opportunities EIS Fund

The Parkwalk Opportunities EIS Fund is managed by Parkwalk Advisors (“Parkwalk”), one of the UK's most active investors in university spinouts. It has strong ties to the UK’s leading universities, managing funds in conjunction with the tech-transfer departments of the Universities of Cambridge, Oxford, Imperial College, and Bristol. These partnerships could provide investors with unique access to the spinout sector.

Parkwalk has more than £500 million of assets under management and benefits from being part of IP Group plc, a FTSE 250-listed asset manager focused on intellectual property commercialisation. 

Parkwalk has to date invested £442.2 million into 185 companies across its EIS and Knowledge Intensive EIS funds. The portfolio has generated exit proceeds of £147.6 million across 27 full and eight partial exits. The remaining portfolio balance is valued at £416.3 million and 33 companies have been written off (May 2024). Past performance is not a guide to the future. 

• Aims to be fully invested within 12 to 18 months, not guaranteed
  
• Target return is unspecified 
• Estimated holding period of four to eight years, not guaranteed
• Target portfolio size of at least eight companies
• Minimum investment of £25,000 – you can apply online 

The manager

Parkwalk Advisors is a specialist university spinout investor with more than £500 million in assets under management. It was founded in 2009 and in 2017 acquired by IP Group, a leading intellectual property commercialisation company with net assets of £1.2 billion (December 2023) and a market capitalisation of c.£560 million (May 2024). In 2017, IP Group acquired Touchstone Innovations, which was set up to invest in promising technology companies spun out of Imperial College and University College London. 

The combined group gives Parkwalk a strong hand when accessing deal flow and negotiating terms, as well as providing a possible exit route for investors. 

The investment committee consists of nine investment professionals including founders Moray Wright and Alastair Kilgour. The team has experience across banking, fund management, start-ups, venture capital, and drug development.

Before your subscription is invested, the cash will be held by the custodian, Mainspring Nominees Limited. After investment, shares will be held by the nominee, MNL (Parkwalk) Nominees Limited. 

Investment strategy

Parkwalk’s niche is UK university spinouts. It invests in technology or intellectual property developed by UK universities, helping inventors and the universities themselves commercialise their research.

Parkwalk’s portfolio companies include spinouts from 20 universities across the UK. In addition to the Opportunities EIS fund, Parkwalk manages funds in conjunction with the technology transfer departments of the University of Cambridge, the University of Oxford, Imperial College and the University of Bristol. Parkwalk typically co-invests alongside large investors, including Amadeus, Cambridge Innovation Capital, Invesco Perpetual, Oxford Sciences Innovation and Schroders.

Parkwalk generally first invests in a company at the stage where its technology has been proven, but products have yet to be sold, and well before commercialisation. A typical initial investment is £1 million to £1.5 million for a 15–20% stake in a business. Later investments may be £2 million to £20 million, usually as part of a larger funding round.

Portfolio companies will typically have deeply embedded IP and are given the freedom to operate. Parkwalk will usually seek experienced, relevant management with the skills necessary to commercialise the product. However, investee companies don’t always have to be early stage. Parkwalk will also invest in later-stage companies, perhaps just before an AIM listing.

While the fund's target return is unspecified, Parkwalk seeks companies it believes could potentially deliver five times the original investment – not guaranteed.

Portfolio

Each investor is expected to have a portfolio of at least eight early-stage, EIS qualifying, technology companies, with a mix of different technologies and stages of maturity (from Series A to Series C), although this is not guaranteed. 

Since launch, Parkwalk has invested in 185 companies. The current portfolio is weighted towards Digital Health & MedTech, Hardware, Life Sciences and AI, Big Data & Software.

Top 10 sector breakdown by investment cost (%)

Below are portfolio company examples from previous iterations of the EIS fund. They are outlined to give a flavour of the types of companies you might expect but are unlikely to be part of a new investor's portfolio. 

Bramble Energy – spinout from UCL and Imperial College London

Bramble Energy was founded in 2015 by UCL Engineers Dr Tom Mason and Dr Vidal Bharath. 

The company has designed and built a new hydrogen fuel cell. Its Printed Circuit Board Fuel Cell (PCBFC) requires fewer components than a traditional fuel cell and draws on established manufacturing supply chains. That means PCBFCs are easier to manufacture at scale and cheaper to the end user, making hydrogen a viable alternative fuel. 

The technology could be particularly useful in areas like light commercial vehicle fleets, where maintaining high levels of utilisation is key, making long charging periods for electric vehicles impractical. However, the company is also looking to expand into the portable energy sector, where batteries have struggled to challenge the traditional dominance of diesel generators for long-term deployments.

The company has been commissioned to apply its technologies in various settings, including replacing diesel engines in boats and integrating fuel cells into vans. These projects delivered the company’s first revenues and saw it feature in the Deloitte Fast 50 in 2023 – a list of the UK’s fastest-growing businesses.

Parkwalk first invested in the business in 2018, following on in subsequent rounds, the most recent of which saw the firm raise £40 million from a group of investors that included Parkwalk parent IP Group, BGF and HydrogenOne Capital. 

Adsilico – spinout from the University of Leeds 

Bringing a new medical device to market can take years – it’s a costly and lengthy process.

To address this, medical device developers are increasingly using “in silico trials”, where a device's safety and performance are assessed before human clinical trials through computational models and simulation. 

Adsilico, which was spun out of the University of Leeds in 2022, has developed technology to facilitate this. Its ground-breaking technique combines multiple data sources and uses generative AI to create “virtual twins” of trial participants. The models can create specific virtual conditions or specific groups of people, including vulnerable groups, such as pregnant women, who do not take part in real-life medical trials. 

The company believes this will allow medical device manufacturers to accelerate R&D, reduce the need for animal experimentation, and augment costly human trials.

Adsilico raised £3.5 million from Northern Gritstone and Parkwalk in February 2024, with Parkwalk investing £1.5 million.

YASA – spinout from Oxford University (example of previous exit)

YASA develops revolutionary compact, lightweight and powerful electric motors and controllers. The products enable vehicle hybridisation and electrification, especially where there is limited powertrain space. 

The company supplies custom and off-the-shelf e-motors and controllers to automotive customers from its Oxford headquarters. YASA is a Ferrari Strategic Technology Partner and has supplied a custom electric motor for Ferrari’s first hybrid vehicle, the SF90 Stradale and well as the 296 GTB. YASA is also entering the aviation market and has partnered with Rolls Royce to break the speed record for electric flight.

Parkwalk first invested in YASA through a £1.8 million Series A funding round in August 2012 at a £5.7 million pre-money valuation. Since then, Parkwalk has supported the business through further funding rounds, most recently in August 2019, at a pre-money valuation of £72.5 million. 

In July 2021 Parkwalk announced that YASA had been acquired by Mercedes-Benz. The sale delivered returns of between 2x to 6x, depending on the round, and returned £45m to Parkwalk investors. Past performance is not a guide to the future.

Predictimmune – previous failure 

Predictimmune was a molecular diagnostics company, which developed a novel blood test to predict at an early stage the progression of inflammatory bowel disease (IBD) and the risk of it turning into severe Crohn’s disease or ulcerative colitis. It was spun-out from the University of Cambridge, and Parkwalk first invested in 2017.

Predictimmune suffered from Covid-related dealys in its clinical trials for new diagnostic products and commercial progress for its existing products was slow, leading the company to scale-down its operations and impairing its ability to raise further funds. 

The company began a solvent wind down procedure and a liquidator was appointed in February 2024, with Parkwalk’s investments being written off. 

Performance

Parkwalk EIS funds have achieved 27 full exits with multiples ranging from 0.1x to 16x. Of these, 17 have been profitable. There have also been eight partial exits and 33 write-offs. The positive exits have helped drive a strong track record of returning cash to investors, with £147.6 million returned to date. Past performance is not a guide to the future.

The chart below shows the average performance of the total subscribed into the Parkwalk Opportunities Funds in each full tax year from 2014/15 (or from when the current strategy was adopted if later). 

The chart is based on the latest valuations provided by the manager, expressed on a £100 invested basis. Please note, individual investor portfolios’ performance will deviate from the average.

Performance of Parkwalk EIS funds per £100 invested in each tax year

Risks – important

This, like all investments available through Wealth Club, is only for experienced investors happy to make their own investment decisions without advice. 

EIS investments are high-risk and should only form part of a balanced portfolio. As must be expected with early-stage investments, some or even all of the companies in the portfolio could fail: the fewer the companies included in the portfolio, the higher the risk of loss if things don’t go to plan. You should not invest money you cannot afford to lose.

There is no ready market for unlisted EIS shares: they are illiquid and hard to sell and value. There will need to be an exit for you to receive a realised return on your investment. Exits are likely to take considerably longer than the three-year minimum EIS holding period; equally, an exit within three years could impact tax relief.

To claim tax relief, you will need EIS3 certificates, normally issued once shares have been allotted. This can take several months: please check the deployment timescales carefully. Tax reliefs depend on the portfolio companies maintaining their EIS-qualifying status. Remember, tax rules can change and benefits depend on circumstances.

Before you invest, please carefully read the Risks and Commitments and the offer documents to ensure you fully understand the risks. 

The manager believes that if a company fails, the intellectual property it owns could still have some resale value, but there are no guarantees. 

Charges

A summary of the main charges and savings is shown below. Some of these will be payable by the investor, whilst others by the investee companies. The investment may have additional charges and expenses: please see the provider documents, including the Key Information Document, for more details.

Our view

The Parkwalk EIS funds have a clear investment strategy in a defined area: university spinouts. Its investments stretch from artificial intelligence for autonomous vehicles, to the world’s most efficient solar cells, to electric motors being used by Ferrari. 

The investment team has plenty of experience in this field, and Parkwalk’s standing in the industry could allow access to opportunities other managers would be hard-pressed to access. Investors have historically been well rewarded for supporting this high-risk area of the market, although past performance is not a guide to the future.

Parkwalk’s links to the UK’s leading universities and large institutional investors, such as parent company IP Group plc, set it apart from many other EIS funds. These could provide investee companies with access to the pools of liquidity needed to commercialise their intellectual property, and potentially provide EIS investors with an additional route to exit although this is not guaranteed. 

In our view, this is a high-quality EIS fund within an exciting and hard-to-reach sector. However, the focus on intellectual property means these investments are typically very early stage and high risk.

Wealth Club aims to make it easier for experienced investors to find information on – and apply for – investments. You should base your investment decision on the offer documents and ensure you have read and fully understand them before investing. The information on this webpage is a marketing communication. It is not advice or a personal or research recommendation to buy any of the investments mentioned, nor does it include any opinion as to the present or future value or price of these investments. It does not satisfy legal requirements promoting investment research independence and is thus not subject to prohibitions on dealing ahead of its dissemination.