GLE Development Capital is to launch a VCT to be promoted by Matrix, which will be offered in mid-Se...
GLE Development Capital is to launch a VCT to be promoted by Matrix, which will be offered in mid-September.
The Cornerstone VCT will aim to generate income and is to be managed by a five-man board chaired by GLE's head of investments, Keith Niven.
The vehicle, which is seeking to raise £20m, will initially be invested in a portfolio of government and corporate bonds. Over the next three years the portfolio will be shifted primarily into profit generative private old economy companies, although 20%-30% will remain liquid to enable the board to add to its existing holdings at the end of this period.
Bridget Cleverly, managing director of Matrix Money Management, said: 'The VCT is very much focusing on generating an income stream for investors. The income in the first year will come from the dividend stream of the gilt and fixed interest portfolio. GLE tends to invest in preference shares and loan stock as well as ordinary shares and the yield in later years will depend on the coupons.'
GLE will also seek to supplement this income through capital growth, Cleverly added. Minimum investment is set at £2,500 and intermediary commission is 2.25% initial and 0.375% renewal.
Cleverly noted the fund manager's bonus structure constitutes an additional safety feature of the VCT. Bonuses only become payable after the fund managers have returned 80p in dividend for every £1 invested.
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