View more on these topics

Kreis and Cavendish hook up with VCT

Kreis Consulting intends to raise up to £30m for the Cavendish Aim VCT, a venture capital trust that may be converted to an Oeic structure within five to seven years.

The VCT will aim for growth, some of which will be distributed as income, by investing in companies listed on the Alternative investment market. To qualify for VCTs, Aim stocks must be new issues investing in certain sectors and be valued at less than £15m.
According to Kreis Consulting, qualifying Aim stocks represent just 25 per cent of the market. Under VCT rules, 70 per cent of the funds raised by a VCT must be invested in qualifying Aim stocks within three years, enabling VCTs to benefit from investment opportunities within the wider Aim market in the first three years.

The Cavendish Aim VCT will initially hold 50 per cent in non-qualifying Aim stocks to generate profits which will gradually be reinvested in qualifying Aim stocks. The VCT will be managed by Cavendish Asset Management&#39s Paul Mumford who currently runs the Cavendish opportunities fund. According to Standard & Poor&#39s, this fund is ranked sixth out of 248 funds based on £1,000 invested on a bid-to-bid basis with net income reinvested over three years to October 4, 2004.

Investors looking for exposure to the Aim market via VCTs have many options to choose from as providers are keen to take advantage of the temporary enhancements to income tax relief. Some investors will be drawn to this VCT by the translation of Mumford&#39s skills to the VCT market, although he will be competing against providers who are already established in this field.

A problem for Aim VCTs is that they may mature at a discount to the net asset value where the underlying stocks have been realised for cash. Cavendish proposes the conversion to an Oeic as a solution. However, investors would lose their VCT tax advantages if the conversion goes ahead.


A&L will cut principal numbers after M-Day

Alliance & Leicester will be restricting the number of principals it deals with after M-Day, Money Marketing has learned. National accounts manager David Rhodes is understood to have told several companies that it will exclude from M-Day that it may restart business with them in January. The managing director of one excluded IFA firm says […]

Portman may link payment to product type

Portman Building Society is reassessing the way it pays procuration fees by looking at paying in relation to the type of product the intermediary has sold. Group development dir-ector Matthew Wyles says there is a “bizarre illogicality”, with lenders paying a fixed procuration fee irrespective of the margin and duration of the product. The society […]

Scottish Life International – International Personal Investment Management Service

Type: Offshore portfolio bond Aim: Growth by investing in unit trusts, investment trusts, Oeics, offshore funds and cash Minimum investment: £50,000, $80,000, euros 80,000 Place of registration: Isle of Man Allocation rate: 90.25%-100% Options: Flexible Pims, Select Pims, wealth insurance option to protect the portfolio&#39s value upon death Investment choice: Select Pims &#45 Scottish Life […]

OFT to examine indemnity claim

The Office of Fair Trading is looking into whether life offices have collaborated to raise indemnity commission discounts simultaneously. The investigation follows a complaint by Berkeley Morgan chairman Jon Pardoe, who has hit out at what he believes is price fixing by life offices. If IFAs choose to receive lump-sum commission upfront, life offices can […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment