The subscription period for the Close FTSE-100 Income & Growth split capital trust has been extended...
The subscription period for the Close FTSE-100 Income & Growth split capital trust has been extended to 14 December.
It was initially due to end last week and Investment Week understands the group has so far raised between £30 to £40m.
Close said the main reason behind the move was due to a problem with the distribution of the prospectuses.
Marc Gordon, managing director of Close Brothers Investment Management, denied the extension to the offer was due to lack of interest and he hinted that he may limit the size of the split cap. He said: "As a tracker we are not in the position to actively buy income so I want to make sure the trust is at an optimum size to ensure investors get the returns we have stated they will receive."
The ordinary income shares will offer a yield of 9%pa. In addition investors will be paid back their full capital investment or more as long as the FTSE 100 does not fall by 10% or more over the trust's life of five years. The zero shares will pay a gross redemption yield of 8.75%.
The group is offering commission on both the income and zero dividend preference shares during the offer period. The income shares will pay initial commission of 3% and the zeros will pay 1%, neither share class will pay trail but both are Isable and Pepable.
The group made the decision in light of the success of the Close Brothers FTSE 100 Index split capital trust. When it was launched in July it raised £136m including debt.
The new trust will also track the FTSE 100 through derivatives. The other difference between this trust and the one launched in July is that the latter included capital shares in its share structure.
Close Brothers is building a reputation as a manager of index tracker funds. As well as the existing index tracking split cap and the one it plans to offer, Close Brothers has recently launched a technology tracker fund.
Investors in the £20m Close FTSE techMARK 100 unit trust can still benefit from a 1.25% discount on the initial management fee of 4.75% until 1 December. The annual management fee on the Isable unit trust is 1.15%. Intermediaries will receive 3% initial commission and 0.5% trail.
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