The Aberdeen VCTs are looking at introducing a sweet equity co-investment scheme as industry commentators predict a deluge of such deals.Aberdeen manager Bill Nixon is talking to the VCTs’ boards about the issue and an announcement is expected by the end of November. Meanwhile, Beringea, which runs the Pro Ven VCTs, is understood to have considered introducing a scheme but changed its mind following controversy over sweet equity. Beringea was unavailable for comment. On top of an annual management charge, performance fees, monitoring fees and arrangement fees, co-investment schemes allow VCT managers to gain from the sweet equity portion of the deals they finance. Hargreaves Lansdown investment manager Ben Yearsley describes such deals as allowing managers to “have their cake, eat it, have another cake, then another cake, then another cake”. Aberdeen says such a deal needs to be placed in context, with over 20 staff likely to share 5 per cent of the co-investment on every deal, rather than four or five staff sharing 7 per cent. Nixon says: ” If we were introducing a co-investment scheme, it would be very much at the bottom end of the scale and will be an all-deals scheme to avoid cherry-picking. In principle, we believe co-investment is a good idea for motivating managers in the interests of shareholders.” Editor of the Tax Efficient Review Martin Churchill says: “Once this becomes the standard, then everybody will do it and who is to blame the VCT managers? This is why I am focused on the issue, to try to stop the deluge.”
In response to the article in last week’s Money Marketing headlined, Speculation ends as Pru chief Wood is set to leave, you reproduced a quote from an unnamed insurance analyst in which it was claimed: “Pru has been losing a lot of market share and profitability.” This is just not true and the figures bear […]
What are the arguments in favour of a flat rate of income tax and how likely is it to be adopted in the UK?
All protection providers should reveal their claims statistics to improve understanding and decrease instances of non-disclosure by clients, according to Abbey for Intermediaries. Head of life and health propositions (protection) Sue Wilkinson made her call as ScotProv released its critical-illness claims data for January to June 2005. The data shows that the majority of unsuccessful […]
Co-operative Bank is targeting first-time buyers with three new products and a dedicated telephone helpline. Its new range consists of a parental guarantor mortgage, a no-deposit or 100 per cent mortgage and a gradu- ate mortgage. Its Mortgage Minder helpline will direct callers to a dedicated team handling first- time buyer enquiries and will ensure […]
By Kunal Desai, head of Indian Equities, Neptune India is officially the world’s fastest-growing major economy and remains firmly on track to become the third-largest economy by 2030, overtaking Japan and Germany. As an accelerating labour force combines with increasing labour productivity, is India getting too big to ignore? Click here for full article […]
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