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Quester searches for top-up



Type: Venture capital trust

Aim: Income and growth by investing in unquoted companies

Minimum investment: Lump sum £3,000

Opening/closing date: November 17, 2003/March 31, 2004 for
2003/04 tax year, April 30 for 2004/2005 tax year

Charges: Initial 5%, annual up to 2.5%

Commission: Initial 3%

Tel: 020 7227 3333

Quester 5 was established in December 2001 and started investing
in unquoted companies in May 2002. It currently is seeking top-up
investments and holds 17 unquoted companies at different stages of
development. Most of these companies are involved in technology
and related areas such as telecommunications.

Looking at the pros and cons of investing in Quester 5, TBO
Corporate Benefit investment director Godfrey Bloom says: “There is
nothing specifically right or wrong about this issue. It is impossible to
assess where small unquoted companies may be in five years&#39 time.

However, although technology stocks have a volatile background, it
seems they remain popular with the investing public even now.”
Bloom thinks potential investors need to ask themselves why are
they going into the issue. He says: “If they are getting 40 per cent
capital gains tax relief and 20 per cent income tax relief this is a very
clear tax advantage. However, it is always regarded as dangerous to
invest for tax relief only.”

Bloom suggests that advisors and their clients should ask
themselves whether it would be preferable to invest in a VCT which
has 10 per cent in Aim investments, which will enable them to know
the net asset value. He also points out that the share price of VCTs
can be lower than the underlying asset value.

He asks: “In short, can one ever get out of the investments? Advisers
knew that when VCTs were invented, this would be a problem and it
has not yet been solved.”


Suitability to market: Average
Investment strategy: Average
Charges: Average
Adviser remuneration: Average

Overall 5/10


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