The Sipp provider is sending its investment memorandum to selected IFAs to potentially recommend to clients. The cash call is not open to the public.
Investors may apply for a minimum investment of £5,000 to acquire 10 units in the offer.
Each unit consists of 100 new ordinary shares of 5p nominal value at an issue price of 100p, four £100 loan notes carrying a 9 per cent per annum coupon issued at par and redeemable by noteholders from March 31, 2015 and 100 warrants exercisable into one ordinary share at 200p per ordinary share between March 31, 2011 and March 31, 2015.
Pointon York says additional units may be acquired at a placing price of £500. The plan is to close on April 9 with the admission of the new ordinary shares anticipated around April 16.
The firm is currently reliant on funding through bank overdrafts. The cash injection will allow the firm to move to a more long-term funding model.
Chairman and chief executive Geoffrey Pointon says: “We feel a Sipp company like ourselves should have a proper funding structure. We have been relying on overdraft money but in this market you need to be much more careful. We have decided to change the structure of the finance and have extra equity and some loan capital with a five-year term.
“We believe it is much better to have some solid support from our clients and our IFA friends.”
Pointon says the firm already has pledges for half the target sum.
He says: “IFAs are invited to read the investment memorandum and decide whether they have clients who may be interested. We are not doing a full prospectus because they cost a fortune so we are talking only to people who are fairly close to us.
“We are offering them a 3 per cent commission. We have pledges for half of it already and judging from the response we should easily meet our target. We believe Sipp is a growth area and a lot of people believe that too.”
The cash will also support the firm’s new corporate Sipp proposition, which it plans to launch in the next month.
Pointon York has around 3 per cent market share but it expects to grow through buying books of business from smaller Sipp administrators. Pointon says the firm has a number of deals in the pipeline and predicts such business will double its book of Sipps in the next three years.