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AITC hardship fund raises only £1m of £10m target

The Association of Investment Trust Companies&#39 hardship fund, set up to provide financial support to victims of collapsed split-capital investment trusts, has attracted only a 10th of its target in the six weeks since launch.

Director general Daniel Godfrey is seeking to reassure fund groups that donations to the fund are not an admission of culpability after revealing that it has raised just £1m – the amount that had already been secured when the fund was announced.

In his response to the Treasury select committee&#39s report into split-caps, Godfrey says donations would not antagonise professional indemnity providers which are unlikely to make payouts before legal liability is established.

He remains hopeful that £10m can be raised.

He says: “We would emphasise that donations to the fund in no way represent an admission of culpability. Nor will grants to consumers be an admission that compensation is due. It is solely a recognition that there are individuals facing severe financial hardship.”

Godfrey has also poured scorn on changes to listing rules which suggest imposing a 10 per cent limit on the amount that an investment company can invest in other firms.

Although conceding that it would solve the gearing, he says it “could prevent funds of funds being established altogether, as well as making the position of existing funds of funds extremely difficult, if not untenable.”

Exeter Fund Managers director Ian Joliffe says: “Lessons must be learned but not to allow more than 10 per cent in equity products seems extreme. It would not benefit anybody.”

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