Close Property Investment has launched a fund of property funds that will give investors access to ground rents, commercial, industrial and residential property.
The Property Investment Portfolio, launched on 7 April, aims to provide good returns in buoyant market conditions, high income and capital growth in flat markets and capital protection is difficult markets through a diverse range of underlying property funds.
The Isle of Man domiciled fund is available for a minimum investment of £11,000. An initial management fee of 5% is charged, from which an adviser commission of 3.5% is payable during an offer period to 30 June.
The fund will invest initially in five sub-funds ' the Freehold Income Trust, the Capital Appreciation Trust, Active Commercial Estates, the Healthcare and Leisure Property Fund and the Close High Income Properties Fund.
The Freehold Income trust owns the freehold of land on which 45,000 residential properties are built ' mainly flats and houses with long leases. This is intended to be the low risk element of the portfolio because of the stability this long-term income stream creates.
The Capital Appreciation Trust refurbishes second hand retirement flats, then selling a life tenancy to each occupant for two-thirds of the acquisition cost including refurbishment. The fund has no borrowing, collection, management or maintenance costs, but expects significant capital appreciation.
The Active Commercial Estates Fund buys high yield office, retail and industrial property if the value of the building can be enhanced within three to five years, when it is sold.
The Healthcare and Leisure Property Fund finances and develops new hotels, specialist care homes, residential developments and leisure facilities with experienced operators.
By doing this, the fund generates high income and shares in the value of the businesses operating in the buildings by means of an equity interest. The fund hopes to benefit from this interest by disposal in three to five years.
The Close High Income Properties Fund invests in high yield light industrial property diversified over a wide range of tenants of different geographical areas.
This range of underlying sub-funds invested in is likely to be increased with time to diversify the fund's risk further.
This fund launch is the latest in a series coming from the Isle of Man. Following the launch of the Experienced Investor Fund structure in June 2000, there has been a continued interest in the vehicle. However, it is only in the last six months that the structure has taken off, generally to form alternative investments, especially propertry funds.
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