Close Business Centre Capital, a division of Close Brothers Investment, has kicked off with its first product, the Fareham fund.
Fareham is a unit trust that will invest in a commercial property and is aimed at investors who are looking for income over the medium to long term. This can include people approaching retirement and owners of self-invested personal pensions.
The fund will spend £3.1m buying a plot of land in Fareham in Hampshire and then building a specialist business centre on it over the next 10 months. Plots in the centre will then be leased out to between 13 and 35 small businesses in the area, which is close to the so-called Solent corridor of engineering, maritime and aeronautical companies that stretches between Portsmouth and Southampton.
The centre will be like the St Johns innovation centre in Cambridge, which is run on similar lines. The Fareham centre will be run by START, a joint venture between the St Johns innovation centre and Tartan development. Companies that move into the Fareham centre will able to benefit from a support package that includes financial advice about getting business loans, accountancy practices and networking in the area.
Investing in property can be less risky then investing in equities, as at least there is a solid asset behind the investment. However, Fareham is more risky than other property unit trusts, like the WELPUT fund from Schroders, in that it invests in one property instead of investing in a spread of properties.
Of the nine Close Brothers unit trusts on the market at the moment, one is first quartile, one is second quartile, one is third quartile and four are fourth quartile, based on £1,000 invested on a bid-to-bid basis with gross income reinvested over one year to October 8, 2001.