INS Rosehill Enterprises PLC
Offer to Subscribe for Shares
Investor Guide
Key features
The opportunity
INS Rosehill Enterprises PLC is seeking
to generate attractive investment
returns by identifying, purchasing,
developing and selling high quality
showjumping horses.
Target return
The Company is targeting a minimum
of 167p per for every 100p invested
over a four year period, excluding any
tax breaks that may be received.
Experienced experts
Duncan Inglis and Henk Nooren
have competed and trained
showjumping horses at the top of the
sport for over 15 years. They have an
established international reputation.
Track record of the Management
Company
The five horses sold so far by the
Management Company on its own
account have all been sold for a profit,
for a net return of 83% (after costs).
Insurance
The Directors intend to insure all
horses owned by the Company for
loss of use, mortality and theft.
Demand for horsepower
The value of showjumping horses
with world class potential continues
to grow as established and emerging
nations continue to increase their
financial commitment to the sport.
Cover image: Blue Angel – ridden by former
USA Showjumping Olympic Team member
Lauren Hough.
Indoor training arena in Belgium
INS Rosehill Enterprises PLC
Regulatory information
Background
INS Rosehill Enterprises PLC is an unquoted
Public Limited Company incorporated in
England and Wales, which is offering its
shares under the terms of this offer in
accordance with the Enterprise Investment
Scheme (EIS). Shares of this nature are not
Retail Investment Products, as defined for
the purposes of regulations which came
into force on 1 January 2013 to implement
the FSA Retail Distribution Review. All
offerings of shares in companies
qualifying for relief under the EIS are by
their nature likely to be higher risk than
shares in listed or quoted companies, and
the Shares available under this Offer may
accordingly not be suitable to all retail
investors. Further information on the specific
investment and other risks associated with
the Shares comprised in this Offer will be
found in the Offering Memorandum which
has been issued by INS Rosehill Enterprises
PLC in relation to this Offer.
Enterprise Investment Scheme
(EIS)
An asset backed investment
providing tax benefits under
the Enterprise Investment
Scheme
Risks
INS Rosehill Enterprises PLC is seeking to
generate attractive investment returns by
identifying, purchasing, developing and
selling high quality showjumping horses.
The Company intends to provide
Shareholders with an exit strategy after
June 2018. It is anticipated that the
Company will own between three and
eight horses at any one time, at a cost
of between £350,000 to £1 million per
horse, with an expected holding period
before sale of 18 to 36 months. The
Company is targeting a minimum of
167p for every 100p invested over a
four year period, excluding any tax
breaks that may be received.
The Enterprise Investment Scheme
provides tax advantages to those investing
in smaller companies. The tax advantages
are significant, and depending on
individual circumstances they allow for:
• 30% Income Tax relief
• Inheritance Tax relief
• Capital Gains Tax deferral
• Capital Gains Tax free gains
• Loss relief
There are rules and restrictions relating
to the amount of tax relief that can be
claimed, please discuss these with your
Financial Adviser. There are also rules and
conditions that EIS qualifying companies
must follow, it is possible that tax relief
paid by HMRC may be retrospectively
withdrawn if these are not adhered to.
Over the last four years showjumping has
become a major league money sport, with
events now typically sponsored by the global
luxury brands such as Rolex and Gucci.
With experience and the right contacts, it
is possible to buy a horse with world class
potential for hundreds of thousands of
pounds. Subject to the right training from
internationally recognised experts, such a
horse can become ready to compete at
World Championships or the Olympics.
Horses that have demonstrated top level
ability are in high demand and reported
to command between £1 million and
£5 million each.
Unusually for an investment asset class,
the reputation of the management team
can lead to a direct uplift in the value of an
individual asset as perceived by a potential
acquirer. The Company has secured the
services of an internationally renowned
training team with a track record of
generating returns from trading
showjumping horses.
This is a high risk investment and will not
be suitable for all investors. Smaller
companies and those that qualify for the
EIS tax incentives are by their nature
higher risk. It will only be suitable for
investors that are able to meet various
tests relating to level of wealth,
investment experience and risk tolerance,
as determined by their Financial Adviser.
It is possible that investors receive back
an amount less than they invested and
there is no certainty on the timing of any
return of capital, liquidity or receipt of
tax breaks. You need to discuss the risks
and whether this investment is suitable
with a suitably qualified professional.
Stable block at the West Sussex facility
Zucchini
Sold, 2013, by IN Showjumpers 2013 PLC
Brianda
Sold, 2013, by the Management Company
Royalty des Isles
Current portfolio, IN Showjumpers 2013 PLC
About INS Rosehill Enterprises PLC
The Company is seeking to raise up to
£4 million to develop a portfolio of horses
which will typically cost between £350,000
to £1 million per horse. Subject to successful
fund raising it is anticipated that at any time
the Company will own between 3 and 8
horses, with an expected holding period
before sale of 18 to 36 months. The
Directors believe that an investment in the
Company will enable private individuals to
access a portfolio of high quality
showjumping horses and may also provide
significant tax benefits under the Enterprise
Investment Scheme provided individual
investors meet the qualifying conditions for
entitlement to EIS relief. The Management
Company has a proven track record in buying,
training and selling high quality showjumping
horses for profit. There are a number of
features that make INS Rosehill Enterprises
PLC different from other EIS offers...
1. Strong alignment of interest
The Management Company, IN Showjumpers
Ltd, that selects, purchases and trains the
horses, receives a share of the profit on the
successful sale of each asset, as opposed
to receiving an annual fee regardless of
performance, thereby providing a strong
alignment of interests with investors.
2. Experienced experts
Henk Nooren, has competed at the very
top of the sport personally as well as having
coached three different nations, to Olympic
medals, including the Netherlands who won
Gold in Barcelona. Duncan Inglis, as well
as representing Great Britain on numerous
occasions, is recognised within the
industry has having the ability to identify
showjumping horses with the talent and
scope to be future world class champions.
Henk and Duncan have worked together
for over 15 years and have a track record
of selecting showjumping horses, training
and selling them for profit.
3. More certainty over tax relief
The Company has received advance
assurance from HMRC that the Company’s
trade will qualify under the Enterprise
Investment Scheme. Tax relief will be eligible
on 100% of funds subscribed provided
individual investors meet the qualifying
conditions for entitlement to EIS relief.
4. Training facilities
The Management Company has access to
modern, well established facilities in the UK
and Belgium. These are owned by Duncan
Inglis and Henk Nooren.
The UK facility is a converted 50 acre farm
located in West Sussex. Facilities include a
70m x 50m outdoor arena, 20 stables, a
wash area, solarium, horse walker, three
cottages and sectioned paddocks.
In Belgium, facilities are situated one hour
from Brussels, Dusseldorf and Cologne.
They comprise a superb purpose-built
modern equestrian centre spanning over
20 hectares. Facilities include a 70m x 50m
outdoor arena, 50 stables, a 20m x 60m
indoor arena, lunge ring, solarium and
wash area.
Track record
Henk Nooren and Duncan Inglis have
advised the Company that, during a period
of four years between 1 January 2007
and 31 December 2011, they collectively
acquired 37 horses* that they subsequently
sold for a combined value of £4,703,424
and that this represents a gross return of
53% over the period.
The management team has proved the concept
within a corporate structure and ten horses
have been purchased by the Management
Company since June 2010. Five of these have
subsequently been sold by the Management
Company (all for a profit), giving a net
return of 83% after costs. This represents
a net annual return of 32% over the period
in which the Management Company traded
from June 2010 to 31 December 2013. The
five horses were held by the Management
Company for an average of 49.8 weeks per
horse. The Management Company
therefore achieved on the sale of the five
horses, an average annualised net return of
86% per horse, based on the length of
time each horse was held, rather than the
period over which the Management
Company has traded.
IN Showjumpers 2013 PLC has purchased
six horses since it started trading in April
2011. Two of these horses have subsequently
been sold, giving IN Showjumpers 2013 PLC
a net return of 32% in respect of these
two sales.
Exit
After four years, the Directors intend to
consider ways in which Shareholders who
wish to exit can realise their investment.
The targeted level of return on £1.00
invested over a four year period is
£1.67 excluding any tax relief received
although there are no guarantees this
level of return will be achieved.
Assuming the target return is achieved
and 30% income tax relief is received,
an exit four years later at the target
return would equate to 24.3% p.a.
after income tax relief.
*Only one of these horses was sold at a loss.
INS Rosehill Enterprises PLC
Outdoor training arena, Belgium
Costs and charges
Initial Charges
5.5%
Annual Fees
Asset Manager
Nil
IFA Trail Fee
0.375%
For the duration of each Investor’s investment
limited to a total aggregate of 10%
Performance Fee
The Management Company (IN Showjumpers Ltd) will receive 25%
of the net profit on any profitable sale of individual horses bought
and sold by the Company. As such, interests are strongly aligned
with investors.
In addition, the Company will pay the Management Company a
Bonus Fee equal to 50% of the aggregate amount of any
distributions by the Company paid to Investors (whether capital or
income) in excess of a Bonus Target of £1.67 per Ordinary Share.
This Bonus Fee will only be payable once the Bonus Target has been
exceeded. In the event that the Bonus Target has not been exceeded
on or before the winding-up of the Company and, if applicable, on
final distribution to Shareholders, no Bonus Fee will be payable. This
is intended to provide a strong incentive for the Management
Company to make distributions as high and as soon as possible.
Introducer Commission/Fees
Initial Commission/Fees
Up to 3%
Or 2% if Trail Fee
Trail Fee
0.375%
For the duration of each Investor’s investment
limited to a total aggregate of 10%
For further information,
please contact:
RAM Capital Partners LLP
10 Furnival Street, London EC4A 1YH
Telephone: 020 3006 7530
Email: taxsolutions@ramcapital.co.uk
www.ramcapital.co.uk
Important notice to be read before reading this document:
The content of this Preliminary Promotion issued by the Company
has been approved by Howard Kennedy Corporate Services LLP,
which is authorised and regulated by the Financial Conduct Authority
(ref. 523524). This document should be read in conjunction with,
and in the context of, the Offering Memorandum issued by INS
Rosehill Enterprises PLC (‘the Company’). You should not consider
making an investment in the Company based on the terms of this
Preliminary Promotion alone. If you are not certain of the impact on
your personal, tax or financial situation of an investment in the
Company, you should take independent financial, tax, legal and/or
other professional advice accordingly before investing.
Issued: January 2014