Hoxton Ventures LLP Takes 230K GBP Loan From Its Fund While Partners Withdraw 280k GBP

Hoxton Ventures

Hoxton Ventures LLP is a Uk based Fund Manager that is licensed by the FCA and its FCA register details are here 

The conditions of the licence held by the Firm can are summarised below

 

In addition , the Firm is subject to several other condition including NOT being able to hold client money

 

Hoxton Ventures LLP is the manager to three Funds , Hoxton Ventures Fund I LP, Hoxton ventures Fund II LP and Hoxton Ventures Fund I Opportunities LP.

Hoxton Ventures LLP Financial Statements For Year Ended 31 March 2019

The financial statements of the firm show that as at the end of the reporting period the firm has net asset of under 100k GBP and had taken a loan from the Hoxton Ventures Fund I LP for 230k GBP and that the Fund’s assets had been used to pay for costs of the asset manager in the period.

 

 

During the period, the partners of the Asset Manager had drawn out of the firm 279k GBP in addition to 267k in the prior period.

 

 

 

 

Questions that come to mind

Is an asset manager allowed to take a loan from the Funds it manages, or is that by definition holding client assets as the Fund has a receivable of the Asset Manager in its NAV ?

Should a Fund being paying expenses of the Fund Manager to be reimbursed later?

If taking such a loan is a breach of rules, what have the FCA done to resolve it as there are no records of breaches on the FCA Register?

Would you expect the British Bank to make major commitments to Funds where the Managers have taken loans from other Funds they manage  and how do they mitigate this risk to ensure that the cornerstone commitment is safe?

“18th June 2020, London: British Patient Capital, a subsidiary of the British Business Bank, has made a cornerstone commitment to Hoxton Ventures’ second fund as it announces its final close today.

The Fund will invest primarily at seed and Series A, backing ambitious, founder-led companies with the potential to scale globally and take advantage of newly forming markets that have strong growth possibilities, irrespective of wider macro-economic conditions.

Hoxton Ventures II has already made 20 investments across a range of sectors, including a next-generation enzyme business, a homewares marketplace, a cloud kitchen business, an artificial intelligence radiology startup, and an online education company.

Rob Kniaz, Partner, Hoxton Ventures said: “We set up Hoxton to address a market gap at a time when few venture firms wanted to invest at the early stage in the UK and Europe. Success stories like Darktrace and Deliveroo show that the UK can produce large, global tech winners. The availability of venture capital, however, is still far lower per capita than in the US. LP support is vital to the success of a strong and healthy tech ecosystem, and British Patient Capital has played a critical role to address the funding gap in the UK. We are delighted to have British Patient Capital as an LP in our second fund.”

Catherine Lewis La Torre, CEO, British Patient Capital said: “Our mission is to enable long-term investment in innovative companies across the UK, led by ambitious entrepreneurs who want to build successful world-class businesses. Hoxton’s approach to investing early, and then supporting founders with business know how, access to global markets, and connections to later-stage growth capital investors is well aligned with our mission.”

As reported by Sifted

Hoxton Ventures, which is today announcing that it has closed its second fund at just under $100m, is a little different from other European VC firms.

For starters, its team is tiny. Until recently, it was a two-man band; partners Hussein Kanji and Rob Kniaz had to set up payroll for the first time only recently when chief operating officer Rob Ludwig joined the show. There are no PAs or principals. 

 

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