New funds add to firm’s
clean energy portfolio
Future Capital Partners
(“FCP”), the £6 billion alternative investment boutique, has launched two funds
– an EIS and a VCT – to capitalise on both the high growth potential of the renewable
energy investment sector and the firm’s expert knowledge of clean energy
investment.
The new products will
offer investors access to low risk opportunities within the renewable energy,
energy efficiency and waste recycling fields. The vehicles will target
renewable energy companies that have a long-term track record, strong business
plans and growth potential supported by government legislation and subsidies.
Specifically, the vehicles intend to invest in wind, biomass, landfill gas and
solar technology companies.
The EIS vehicle, Elara Renewable Fund , targets annual
average returns of 7% on a post tax basis and will be adopting a conservative
investment strategy targeting lower risk
opportunities across the renewable sector. The fund has a minimum investment of
£5,000. Investors in the fund should qualify for 20% income tax relief on
investments up to £500,000 in any one tax year, significantly reducing the
initial cost of investment. In addition, investors can defer capital gains tax
liabilities by investing in the fund and will qualify for 100% relief from inheritance
tax after two years. Any capital gains
realised on disposal of investments held by the fund after three years should
be exempt from capital gains tax.
Clean
Future VCT aims to
provide tax free annual dividends of 7% to investors. Shares in the VCT are
offered at £1 per share, with a minimum investment of £5,000. The fund will
target a total return of 130p per share, and investors will qualify for up to
30% income tax relief on capital invested in the fund, as well as exemption
from capital gains tax on disposal of the investment.
FCP already has a
strong background in renewable energy investment as a result of its Future
Fuels product, an investment partnership aimed at high net worth investors that
is funding and building an industrial scale bioethanol plant in the North of
England. The firm will bring its knowledge and experience of managing the partnership
to the new vehicles, and expect the new funds to prove as popular among
investors as Future Fuels.
The investment strategy
of the funds will take advantage of significant expected growth within the
renewable energy arena. The EU’s Renewable Energy Directive states that 20% of
all energy in Europe must come from renewable sources by 2020. The level of
growth required amongst renewable energy companies to meet these targets is
expected to be a central driver of performance.
The funds are targeting
UK investors in the retail, institutional and high net worth sectors, and the
vehicles will offer investors a number of tax relief advantages within the
investment. The funds cater for a range of tax relief requirements and allow
investors to select the risk/return and tax profiles to suit their needs.
The investment team has
an outstanding track record in renewable energy investment. It comprises FCP’s Jonathan
Turney, Gavin Harrison and Stephen Norton, while Gaia Power’s Peter Conway will
serve as independent non-executive director to the listed
VCT.
Tim West, Deputy CEO of Future Capital
Partners, commented:
“While this is our first foray into the EIS & VCT space, we believe
that the firm’s experience in renewable energy, our expertise in tax structured
investment and the quality of our investment team make us ideally suited to
enter the market with these funds. Throughout our history, from our roots as a
structured finance house, to managing partnerships for sophisticated investors,
to entering the retail fund space, we have maintained a consistently strong
track record of offering investments with outstanding growth potential while
minimising risk for our investors. The move into the fund space is the next
step in the evolution of Future Capital Partners, and we are confident that
this is the right time to take that step”
Piers Denne, Head of
Sales & Marketing, commented:
“These funds offer
precisely the kind of high return low risk outlook that the market is
clamouring for at the moment. The renewable space offers outstanding returns
while the tax benefits within the investment offer excellent downside
protection, significantly limiting the risk for investors. Our experience,
track record and contacts within the renewable energy sector mean we are able
to identify the best companies operating in the industry to add to our
portfolio.”
“We have long said that
renewable energy is the growth investment area of the next decade. This
is the chance for all investors to capitalise on that.”