Opalesque Industry Update - Future Capital Partners, the £6 billion alternative investment boutique, has launched another EIS fund that will capitalise on the firm’s successful green energy investment strategy. The new fund is the third of FCP’s renewable energy EISs, following the success of Elara I and the recently closed Elara II.|
Elara III targets annual rate of return of 29.28% on a pre-tax basis and will be adopting a conservative investment strategy focused on lower risk opportunities in the renewable energy sector. The new fund will aim to raise at least £6 million, and is expected to close at the end of March. The launch follows the recent successful close of Elara II, which raised £4 million. Previously, the firm raised £2 million for Elara I.
Like its predecessors, the new EIS fund will invest in companies providing services to Blue Energy, a leading UK renewable energy development and investment company. Elara III will adopt a similar strategy of sourcing a diverse range of lower risk renewable energy opportunities. Specifically, these opportunities will focus on construction of wind installations, anaerobic digestion plants and wholesaling of renewable energy supplies such as solar panels.
Investors in the fund should qualify for 30% income tax relief on investments up to £500,000 in the current 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. The fund has a minimum investment of £5,000.
The investment strategy of the fund 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 the EU must come from renewable sources by 2020. The level of growth required from renewable energy projects, such as those run by Blue Energy, to meet these targets is expected to be a central driver of performance.
FCP has a strong background in renewable energy investment. In addition to its previous EIS funds, the firm also manages Future Fuels, an investment partnership aimed at high net worth investors that is funding and building an industrial scale bioethanol plant in the North of England.
Elara III is targeting high net worth UK investors and the vehicle will offer investors a number of tax relief advantages within the investment.
Piers Denne, Head of Sales & Marketing at Future Capital Partners, commented:
“The success we have had with our previous Elara funds, and the appetite among investors for the diversified renewable energy strategy they adopt, is validation of our approach to the green investment sector. Launching Elara III will give investors another chance to benefit from the funds innovative strategy, and we have responded to investor appetite by increasing the capacity we can invest in underlying deals."
With the end of tax year approaching, this is a time when investors should be looking at minimising their tax liability. The tax benefits available through Elara III, our track record with these funds, and the strength of our partnership with Blue Energy, make this a highly attractive prospect.”
About Future Capital Partners