Catalyst Investment Group and Stargate Capital Management have launched the Catalyst Stargate EIS Green fund which will offer significant tax advantages for green investors.
The fund will invest in growth companies developing innovative green products and services and technologies within fast growing markets, including renewable energy and energy efficiency, sustainable living and consumption, waste management and recycling technologies, water treatment and preservation and environmental services.
Like other EIS funds, the Catalyst Stargate vehicle will invest in the smallest 1% of companies in the UK.
The fund, which has a minimum subscription of £2,000 with no maximum investment limit, will open for investment on October 18 and close on April 5 2008. Catalyst hopes to raise around £4m and will be corporate advisers to the fund while Stargate will be the investment managers.
The fund’s structure means it will provide a number of tax benefits for investors including:
- income tax relief, by reducing income tax liability by an amount equal to 20% of the amount invested (after costs)
- unlimited deferral of CGT arising on the disposal of any asset from the previous three years or 12 months following an investment
- CGT freedom, as there is none payable on disposal of shares after three years
- if EIS shares are disposed of at any time at a loss, such loss can be set against the investor’s capital gains or income in the year of disposal
- EIS investments are exempt from inheritance tax after two years of holding such investment
The two companies have already launched a fund together, the generalist Catalyst Stargate EIS fund, which closed earlier in the year and is already 100% invested.
Commenting on the new fund, Andrew Wilkins, head of corporate finance at Catalyst Investment Group, said: “Working in partnership with Stargate Capital, we are delighted to be able to offer this unique and highly competitive Green Fund to investors. It continues our commitment to bring highly innovative products to market for investors.”
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