Ivory & Sime breaks ground with new trust

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The Independent Online
IVORY & SIME, the fund manager, is seeking to raise pounds 13m- pounds 18m from institutions as part of its launch of an innovative investment trust for private investors.

The Ivory & Sime Isis Trust - named for Income and Savings Investment Schemes - aims to provide private investors with a high and dependable income of 7 per cent of the sum invested, paid monthly. Most will not have to pay tax, since Ivory & Sime intends to make 'income' payments by selling capital. Few private investors incur sufficient capital gains to incur tax.

All the dividend income on the Isis investment portfolio, which will largely be chosen from the leading 350 quoted British stocks, will be sold to institutional investors by way of convertible annuity shares. This device will enable Isis to offer private investors a net asset value in excess of the 100p they will pay for each share - thus countering the standard objection to investing in new investment trusts.

Gordon Neilly, an Ivory & Sime director, admitted many investors were wary of taking an income out of capital but said Isis was encouraging a total-return approach to investment.

Isis is looking for pounds 100m from private investors. It is keen to attract regular savers and is offering a free warrant for every five shares bought through its savings scheme.

Ivory & Sime manages pounds 3.4bn, nearly half of it in investment trusts.