Type: Exempt unit trust
Aim: Income and growth by investing in high yielding business centre properties
Minimum investment: Lump sum 25,000
Investment split:100% in high-yielding business centre properties
Closing date: May 31, 2005
Charges: Initial 5%, annual 1%
Commission: Initial 5%, renewal 0.25%
Tel: 0870 733 3773
The Romulus high income fund is an unauthorised unit trust investing in high-yielding UK business centres. It will generate income of at least 7.25 per cent a year.
Highclere Financial Services partner Alan Lakey feels this product is aimed at high-net-worth clients with investment experience and a diversified portfolio.
In his view, Close Property Investment has a sound reputation for excellent products within the high-net-worth market. He says: “For the appropriate client, it offers an excellent opportunity for capital growth and income which is anticipated at 7.25 per cent a year.”
According to Lakey, the charges are not unreasonable and he also feels the commission is acceptable given the sums likely to be involved. He points out that the funds availability to self-invested personal pensions and small self-administered schemes further adds to the attraction. He regards the literature as classy and precise.
Looking at the potential drawbacks Lakey feels marketing opportunities are limited for the typical adviser. He says: “The requirement for units of at least 25,000 for each investor with a minimum investment period of five years serves to confirm this.”
In Lakeys view, the product could be unsuitable for novice investors, those with a limited portfolio or anyone not prepared to be restricted by a five-year minimum term. He concludes: “Finally, as an unauthorised unit trust, the usual safety net of the Financial Services Compensation Scheme does not apply.”
Suitability to market: Good
Investment strategy: Average
Adviser remuneration: Average