Close Venture Management, the venture capital trust division of Close Brothers, has established an offshore unit trust that invests mainly in property within the hotel, care home and residential sectors.
The healthcare and leisure property trust was designed in conjunction with Close Property investment. It aims to provide income of 7.5 per cent a year and capital growth of 2.5 per cent a year and will co-invest alongside the Close Brothers VCT.
This VCT was established in 1996, before the 1998 budget stopped VCTs investing in asset backed areas such as hotels and care homes. The unit trust is an alternative means of giving investors access to these sectors as new VCTs cannot offer this.
Some experienced high-net-worth investors may be looking to reduce their exposure to volatile equity markets and property may be a suitable alternative for a part of their portfolio. This fund enables them to diversify across different property sectors and to benefit from the experience of the team behind the Close VCT.
The Sipp market could also find the healthcare and leisure property trust useful because it enables them to gain exposure to residential property development. However, property development can be risky and the target income and growth yields will depend on finding the right properties and refurbishment going ahead without delays.
According to Standard & Poor's, the Close Brothers VCT is ranked five out of 16 trusts based on £1,000 invested on a bid-to-bid basis with net income reinvested over three years to June 10, 2002.