Type: Exempt unit trust
Aim: Income and growth by providing secured bridging and development finance to property projects in the UK, South Africa and EU countries
Minimum investment: Lump sum £25,000
Investment split: 100% in property projects in the UK, South Africa and EU countries
Closing date: February 29, 2008
Charges: Initial 2.45% excluding IFA commission, annual 0.5%0
Commission: Initial 5%, renewal 0.25%
Tel: 0870 122 5420
Acorn Corporate Finance and EuroCape have teamed for the launch of EuroCape Property Finance II, an exempt unit trust investing in secured bridging and development finance for property projects in the UK, Europe and South Africa. The fund is also available as a limited partnership.
Looking at how this product is useful for IFAs and their clients Berkeley Morgan regional director Stephen Lundy says: “Clients need diversification in their investment portfolio. This can be achieved by holding several assets within an asset class and by holding different asset classes. The Eurocape investment is in a different asset class from shares, cash, bonds and property so its inclusion within a portfolio should reduce total portfolio risk.”
Lundy also feels that as an asset class, it should be substantially lower risk than all the others except for cash. “The returns will be in the nature of income rather than capital gain and so it fits in with an income producing portfolio,” he says.
Considering the potential drawbacks of the product Lundy says: “I am not hugely keen on the South African exposure, but as long as the managers apply proper risk controls it should not be an issue.”
Lundy believes Eurocape will face no competition because it is the first product in this asset class. “The business model is normally applied on a proprietary basis and I am familiar with how it works in practice,” he adds.
Suitability to market: Good
Investment strategy: Good
Adviser remuneration: Good