Downing Corporate Finance has teamed up with Electra Partners for the introduction of the Electra kingsway venture capital trust (VCT).
Product providers usually showcase VCTs at the end of the tax year, but they are having compete earlier this year because there is a lot of uncertainty and less money going into stockmarket investments.
Electra kingsway invests in a portfolio of unquoted companies and developing companies that are listed on the alternative investment market (Aim). It intends to make the most of the growth potential of smaller companies as these may be undervalued.
The money raised by the VCT will not be immediately in unquoted and Aim-listed companies. It will first go into the Electra investment trust, which is contained in the venture and development capital sector, the Electra active management Oeic and a portfolio of fixed interest securities. It will then be transferred when suitable investment opportunities in unquoted and Aim-listed companies are identified.
The companies chosen will be those that intend to float within three years, can generate profits and have a sound development strategy. It will not focus on high risk start-ups.
Wealthy, sophisticated investors who want to defer capital gains tax may want to invest in this VCT. It could also appeal to investors with less money to invest, but who want exposure to companies at an early stage of development as part of a wide portfolio.
According to Standard & Poor's, the Electra investment trust is ranked 10 out of 27 trusts based on £1,000 invested on a bid-to-bid basis with net income reinvested over three years to October 1, 2001.