In a recent interview with Matt Williams, Content Editor at Tax-Efficient Investment Magazine, Parkwalk’s CEO Moray Wright dives into the topic of EIS. He discussed Parkwalk’s focus on university spinouts, along with outlining how their investment strategy fits in the EIS market.

Parkwalk is one of the leading EIS funds in the market, returning over £200 million back to investors, and their expert insights on the state of EIS investments post the Autumn Budget and details on how EIS has evolved are extremely valuable for advisers and ultimately their clients.

The benefits of EIS

He also highlighted the benefits when deferring an existing capital gain, as EIS can be used to defer CGT that would otherwise be payable on the gain from the sale of assets such as property or shares. “Any gains rolled into an EIS are deferred and only become taxable when the EIS investment is ultimately disposed of, unless further planning is undertaken,” he explained. “If the investment qualifies for Business Relief (BR) and is held for at least two years at the point of death, it can be exempt from inheritance tax.”
There’s also the advantage of loss relief should any investments within the portfolio fail, which can be offset against either capital gains or income. “For an additional-rate taxpayer, when you combine 30% income tax relief with the ability to offset losses against income, the effective net capital at risk can be significantly reduced, in some cases to around 38.5p per £1 invested,” Moray clarified. “So, it’s a pretty compelling suite of reliefs.”

Finding the right EIS clients

While there’s often been an idea that those who use EIS/VCTs are extremely high earners, Moray revealed that this is often not the case. “When you take into account all of those different reliefs, it’s applicable across a lot more groups,” he said. “Our typical client is somebody in their late 50s or early 60s who still has a decent amount of income.” These clients have likely amassed wealth in share portfolios or property, while also considering their beneficiaries whom they intend to pass on to by tax-efficient means. “You’re looking at someone who can utilise at least one, if not two of those reliefs,” he noted. “That somebody also must have a reasonable and suitable attitude to risk for this type of investment.”

EIS in a changing estate planning landscape

With pensions falling into people’s estates for inheritance tax purposes from April 2027, Moray believes that this has become more of a factor for people considering where they want to save their retirement pot. “With EIS, you get a tax relief on the way in, along with tax-free growth within the portfolio,” he said. “It’s more illiquid than a pension fund, but it has frequently been used as an auxiliary retirement planning tool.”

He also predicts that EIS will become a viable option for even more clients as part of their retirement pots. “With the changes to BR, people are a lot more focused on inheritance tax planning,” he added. “Therefore, more estates are likely to be responsible for inheritance tax payments.”

From April 6th 2026, for BR qualifying assets including EIS shares, the first £2.5 million is free of inheritance tax, while anything above that is charged at half of the prevailing IHT rate. This makes it an efficient method of passing assets on to the beneficiaries. It was confirmed in the Autumn Budget that the allowance is transferable between spouses and civil partners, meaning a surviving partner may benefit from a combined allowance of up to £5 million, depending on their circumstances.

How EIS has evolved

There have been a lot of changes to the rules and regulations, which are nudging EIS/VCT managers in the right direction. “The rules were quite loose initially, and as often happens, people take advantage of it,” Moray noted. “Over the past decade or so, the rules and regulations have been tweaked to really hone that focus of investment onto knowledge-intensive companies and this was exemplified in the most recent Autumn Budget, in which the lifetime investment limit for knowledge-intensive companies was increased to £40million.” These are the companies which Parkwalk have focused on supporting.

He revealed that the changes to the rules and regulations have served to ensure that EIS investment is now flowing into the type of businesses that the scheme was originally set up to support. “There’s a reason that you get those reliefs, as you are supporting startup businesses,” he said. “Everyone is focused on saving as much tax as they possibly can, and that broad range of reliefs within EIS makes it a really compelling tax planning product as well as an investment product with high risk but potentially high growth and rewards.”

Moray added that, over the last 15 years, we have seen plenty of cross-party support for the EIS scheme. “Both the Conservatives and Labour have honed in on it within their growth agenda but also tried to increase the limits where they can,” he highlighted. “This is very much on the government’s agenda to get some growth back into the economy.”

He also revealed that, in Parkwalk’s latest report, over 80% of university spinouts have been started with EIS financing, while roughly 50% of Unicorn companies in the UK have received EIS funding, emphasising the potential for growth with EIS funding.

Looking ahead, Moray highlighted last year’s extension of the Sunset Clause for a further 10 years, as well as the increases to funding limits announced in the Autumn Budget, both of which he believes show a strong commitment from the Government to EIS going forward. “Our view is that the scheme will continue to grow and become more of an important focus to the government,” he concluded.

Focused on backing university spinouts

Parkwalk was set up in 2009 with the focus of investing in UK university spinout companies, which they viewed as an undervalued asset class. “We felt that the government might try to rebalance the economy after the financial crisis by growing the entrepreneurial sector,” Moray said. “In the UK, we have four of the world’s top 10 universities, and 20 of the top 100, all of which attract global talent with great solutions to world problems.”

Parkwalk manages funds in conjunction with several of these top UK universities, including Oxford, Cambridge and Imperial College All of these are regularly ranked among the top 10 research institutions in the world. Meanwhile, they also have a series of funds with Bristol, along with a fund in collaboration with Northern Gritstone, investing in the Northern Arc Universities of Leeds, Liverpool, Manchester and ShefÏeld. In addition to these, Parkwalk manages an evergreen fund and annual Knowledge Intensive EIS Funds, which invest in spinouts up and down the country.

“We’ve got quite a lot of the country covered, and we do invest in companies out of any university,” he clarified. “To have a university-specific fund, you probably want to have at least five investments to help have some diversification.” Moray explained that while some of the smaller universities might spin out one or two companies per year, the larger ones, which receive a greater share of the UK’s research spend, tend to spin out between 5-10 companies per year.

Where Parkwalk’s investment strategy sits in the EIS funds market

Parkwalk are the largest growth EIS fund in the UK, managing a series of funds in sectors such as AI, life sciences and quantum computing. “Over the past 15 years, we’ve invested over £500 million into this sector,” Moray revealed. “That has generated some good returns for our investors, with around 75 exits to date.” These investments have, in fact, returned over £200 million to Parkwalk’s investors.

Moray noted that, in the turbulent times we’ve experienced in recent years, having a small portion of investable assets in venture capital is an effective way of gaining outsized returns. “This is especially apparent with EIS,” he added, “where you get fantastic tax reliefs which help to mitigate potential losses, while also giving you capital gains freedom on any upside.”

The strength of EIS has been boosted by the continued support from the Government that we touched on earlier. “The Conservatives previously, and now the Labour government, have also worked to shift the UK pension industry from investing mostly in very low-risk investments, to targeting more growth capital,” he revealed.

Moray pointed to the Mansion House Compact, a voluntary agreement between pension funds and the government, which aims to move up to 5% of assets into early-stage growth in the UK by 2030. “We’re seeing a greater focus on this asset class, not just from the EIS, but from pension funds,” he stated. “Over the next few years, we’ll see a lot more capital coming into this sector, which should give some of these companies the opportunity to compete on an international stage.”

Choosing an experienced EIS manager

Moray reminded us that while past performance doesn’t guarantee future performance, it does alleviate some concerns to know that a manager has successfully delivered returns to previous investors. “There are about 50 EIS funds in the market, but few have delivered successful exits,” he revealed. “In terms of being an investor, you need to look at the past performance of a fund manager.”

Given the changes to the rules and regulations, he added that it’s important to work with a manager who has worked with the right types of companies.

This led us on to discuss Parkwalk’s recent performances. They have seen consistently strong returns, with Moray revealing that they have averaged 1.5-2x returns for their investors, with tax breaks on top of that. “This equates to a double-digit internal rate of return,” he noted, “which is relatively industry leading.” 2025 was a productive year for Parkwalk, with seven successful exits in total. “We’ve had a couple of trade sales where we’ve had companies acquired by either US companies, both listed and private,” Moray added. “These have ranged from 2.5x-14x CGT-free returns, so it’s been a good year.”

Moray also noted that they have seen more M&A interest than ever, which he described as encouraging. “Corporations around the world seem to have pretty healthy balance sheets,” he concluded. “They are looking to buy into innovation to improve their offerings.”

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To read the full piece in Tax Efficient Investment Magazine, click here.

Risk Warning:

This is a high risk investment and capital is at risk. Past performance is no guide to future performance. Tax reliefs dependent on individual investor circumstances. Parkwalk Advisors Limited is authorised and regulated by the Financial Conduct Authority (FRN: 502237). This financial promotion was approved on 22/1/2026.