The Caledonia Investment Trust is planning to introduce a self-select Isa during the course of the y...
The Caledonia Investment Trust is planning to introduce a self-select Isa during the course of the year.
At present the trust, which converted from an investment company on 1 April, just offers a regular saving plans for investors to subscribe to.
The £702.2m trust, as at the end of December, had more than £450m of distributable reserves in the bank.
These reserves represent the capital gains the company made before it was an investment trust, which it did not pay out because it would have had to pay capital gains tax (CGT) on them.
However as the company has now converted into an investment trust, it does not have to pay CGT on disposals and now has a large degree of cover to underpin its dividend policy.
Tim Ingram, chief executive at Caledonia, said that as a result of having this large cushion of reserves, the group's trust may have to sacrifice long-term growth at the expense of yield.
The trust, which invests minority stakes in 30-40 companies, has its NAV valued on a monthly basis, which is unusual for a trust that has a large amount invested in private equity.
Private equity currently accounts for around 35% of the portfolio.
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