close property's healthcare and leisure property fund will invest in hotels, care homes, leisure based properties and house building
Close Property Investment has launched the Healthcare and Leisure Property Fund, which will invest in hotels, care homes, leisure-based properties and house building.
The new fund will mirror the healthcare and leisure property part of the Close Venture Capital Trust.
Investments will be mainly restricted to specially formed companies with a high level of asset backing, so that even if the trading performance of the company is below expectations, the underlying asset value should provide a degree of capital protection. The proposed investment structure will be a mixture of equity and loan stock.
The loan stock will usually comprise about 70% of the total amount invested in each company. It will be structured to provide a predictable annual income flow and will be secured on the assets of the company to help protect the capital value of the investment.
Companies will be held for about three to five years.
Close believes the hotel industry is attractive because the number of budget hotel rooms in the UK rose from 17,550 in 1995 to an estimated 60,000 in 2001, which represented 6% of the total UK hotel stock.
The Close venture capital trust gross return from its hotel portfolio was 15.5% a year last year.
According to Close, the care home industry is developing and the proportion of the population in the UK that is aged 85 and over is forecast to double over the next 50 years. That, in turn, is expected to increase substantially the demand for nursing home beds. The gross return for the Close venture capital trust for the home care industry last year was 11.6%.
The portfolio will be managed by Patrick Reeve, Ole Bettum, Henry Stanford, and Emil Gigov.
The target level of income is 7.5% a year and the target level of capital growth is 2.5% a year, giving a total target return of 10% per annum.
The minimum investment is £11,000 inclusive of the initial charge.
There is a 3% introductory commission available to authorised advisers on applications received before 2 December.
The fund will be domiciled in the Isle of Man.
Two global vehicles
'Further plug advice gap'
Must appoint separate CEOs and boards
Advisers do come out well
Will report to Mark Till