Shore Capital is launching an innovative vehicle providing UK taxpayers with tax efficient participation in hedge funds and other alternative investments.
Leveraging its successful track record in this area, Shore has launched Puma VCTs III and IV. These funds take advantage of a 40% tax rebate to investors in Venture Capital Trusts under existing rules and an ability to hold a diversified portfolio of qualifying and non-qualifying investments. The funds are limited to a five-year life, after which cash will be returned to investors.
Initially, the funds will invest in a portfolio of "non-qualifying" investments, principally absolute return investments. Over five-years, on a time weighted basis, circa 45% of the funds will therefore be in a portfolio of hedge funds, including Shore Capital's multi-manager hedge fund offering, Puma Absolute Return Fund, which was up 13.87% net in UK Sterling in the 12 months to 31/1/06, as well as property vehicles and structured products.
The qualifying portion will consist of a diversified portfolio of lower risk AIM, OFEX and private equity shares. This will draw on Shore Capital's strong stockbroking, corporate finance and research profile in these areas, as well a strong expertise in private equity.
"I joined Shore Capital because the company has a reputation for strong intellectual capital and innovation," says Stuart MacDonald, Director of Alternative Investments, who recently joined the firm from Henderson, where he was Director of Hedge Funds, "This opportunity to get a tax break to invest in hedge funds and other alternative investments is unique and compelling."
Shore Capital plans to continue to build its profile with innovative offerings, but with the tax advantages relating to Venture Capital Trusts expected to change, the current 2005-6 tax year may be the last opportunity for UK investors to benefit from the current 40% tax "top up".
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