Opalesque Industry Update -
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 focused on 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.”
About Future Capital Partners Founded in 2000, Future Capital Partners is one of the UK’s leading alternative investment boutiques, specialising in Renewable Energy, Real Estate, Healthcare and Media & Entertainment. Future Capital Partners has completed transactions and made investments worth in excess of £6 billion. Its 70-strong team works closely with financial institutions, wealth managers, IFAs and accountancy firms to develop unique investment opportunities, ranging from pure equity to tax-efficient structures, which enable clients to invest in some of the most compelling financial products available in the UK. www.futurecapitalpartners.com