Shore Capital Launches Tax-Advantaged UK Alternative Investment Fund

by Phillip Morton, Investors Offshore.com

24 February 2006

Shore Capital, an independent investment banking group based in the United Kingdom, has launched a dual fund structure which allows investors to participate in its successful hedge and property funds whilst benefiting from a significant tax break through a venture capital vehicle.

The Puma Venture Capital Trusts, launched by Shore last month, aim to maximise the benefits of a 40% tax rebate provided for such funds under UK tax rules by returning cash to investors after a five year life-span.

The qualifying element of the fund will hold investments in relatively low risk small UK companies, including AIM, Ofex and private companies, where the Shore says its funds will draw on its extensive experience as a small cap/VC fund manager AIM broker and market-maker.

Over this five-year period, Shore Capital is aiming to double the net investment to give a 15% annual tax-free return.

The non qualifying investments will include a broad range of assets, including a diversified portfolio of hedge funds and property vehicles, in which Shore Capital says it already has a strong track record - the Puma Absolute Return Fund was up 13.87% net in sterling terms in the 12 months to the end of January 2006.

“We are very excited about the launch of our first VCT," commented Howard Shore, Chairman, Shore Capital, which is based in London and Liverpool.

"Shore Capital has a strong investment record over 9 years in smaller growing companies: in periods of strong performance of smaller companies generally we have delivered excellent returns, whilst in more difficult conditions we have protected capital and delivered growth in net assets per share. Puma VCT is structured with the objective of achieving strong absolute returns and distributing these tax free to investors, taking advantage of the recent fiscal changes," he explained.

The minimum investment in the fund has been set at GBP10,000. There is a maximum investment of GBP200,000 per individual.

Annual management fees are 2% while the manager's carried interest is 20% for all cash distributions to investors in excess of 100p per share. The investment managers will also invest in the VCT on the same terms as other investors.

Recommended