Understanding Investment Risks

INVESTMENT RISKS

Last update: June 2023

Oxford Capital is an Alternative Investment Fund Manager (AIFM) as defined by the Alternative Investment Fund Managers Directive (AIFMD), providing access to Alternative Investment Funds (AIF) and Co-Investor Circle (a MiFID service). Oxford Capital invest in unquoted securities, which are classified by the FCA as a Non-Readily Realisable Security (NRRS). As such, these products may only be marketed to limited categories of investors, relating to knowledge, experience or financial situation. Oxford Capital do not provide an advised service. You are required to make your own independent assessment, or seek professional advice, in respect of the suitability of any investment you may make with Oxford Capital. Sole responsibility for suitability of the investment for an investor, including the legal, regulatory, tax and investment consequences and risks of doing so, lies with the investment adviser or with you should you choose not to seek advice.

There are significant risks associated with investing in NRRS. These are detailed in both general and specific terms within individual product Information Packs, which you are urged to read before making any investment decision. However, we provide here detail of many (though the list is not exhaustive) of the key risks of the types of investment products Oxford Capital offer.

Capital at Risk
Oxford Capital invest in unquoted securities. Such investments can be considerably more risky than investments in quoted securities or shares. Investing in unquoted shares may expose you to a significant risk of losing all the money you invest. You should ensure that you are able to bear any such losses before making a decision to invest. Before investing, you are strongly recommended to consult an authorised person specialising in advising on investments of the kind described on this website.

Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment. Take 2 mins to learn more.

Liquidity Risk
Unquoted securities are illiquid investments, meaning it may in practice not be possible to deal in them, and exit from a shareholding investment is often only possible by sale of the entire company. Unquoted securities are often subject to transfer restrictions and difficult to sell. An investment in unquoted securities should be considered a long-term investment. That is to say, although you may qualify for EIS tax advantages in relation to a qualifying security after three years, it may in practice require you to hold your interest in that security for significantly longer than this.

Valuation and Dealing Risk
Unquoted securities are difficult to value and it is hard to assess the risk of investment at any given time. Even where a valuation is provided, there is no certainty that third parties will be willing to deal at that valuation.

Tax Risk
Tax reliefs are dependent on individual circumstances and references to tax laws or tax levels on this website are subject to change. Oxford Capital does not offer tax advice.

Early-Stage Investment Risk
Oxford Capital invests predominantly in early-stage companies. Early-stage companies are exposed to significantly more risk than more established counterparts, increasing the chances that they might fail. They can experience significant and sudden increases or decreases in value. They often serve small, niche markets or face the challenge of gaining a foothold in a larger, well-established market. Smaller companies can be less resilient to economic shocks and have higher dependency on key personnel. They can also be vulnerable to sudden changes in the nature of their industry sectors, or competition from bigger companies and new market entrants.

Dilution Risk
When investing in early-stage companies, it is possible that the value of your shares could be reduced through dilution, where companies raise further equity capital in fundraising rounds in which you do not participate. This can result in a company delivering a ‘successful’ exit, but early investments returning little or no capital.

Performance Risk
Past performance is not a guide to future performance and may not be repeated.