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Close launches Residential Growth Partnership


Close Asset Management has launched the Residential Growth Partnership, which offers investors the opportunity to benefit from a recovery in the residential property market, but is not principally dependent on a recovery to generate its returns.

Close launched the fund on 1 October and the offer period ends on 11 December 2009. 

The fund will invest in English residential property and aims to generate a return of eight per cent IRR per annum over five years for investors.

The fund offers investors the chance to benefit from any recovery in the housing market, but is not solely dependent on a residential housing market recovery for its returns. This is due to the funds acquisition strategy which purchases properties let out to the over 60s on a lifetime lease. 

Nigel Ashfield, managing director of Close Asset Management’s property division and fund manager of the Freehold Income Trust, says: “The outlook for residential property is uncertain in the short-term. The latest data is suggesting that values are stabilising, while some are forecasting that the market will ‘bottom out’ in 2010. We believe there will be a sustained recovery in 2011 as unemployment begins to fall and mortgage availability improves.

“We have seen several residential property funds launched this year, most of which are reliant on purchasing from distressed sellers and a sharp recovery in house prices with their returns magnified by gearing. The Residential Growth Partnership Fund is different. It should allow investors to benefit from a recovery in house prices but in the knowledge that returns are not solely dependent on a recovery.  We believe that this makes the fund a unique, attractive investment opportunity for investors seeking diversification and attractive potential returns paid as capital gain.”

Close believes that the fund will appeal to investors who are looking for exposure to a medium term recovery in the housing market, but are cautious of present market conditions.

The fund has a minimum investment of GBP20,000 and pays three per cent initial commission and 0.5 per cent trail commission. 

Close Asset Management has partnered with Homewise, a family run company that has specialised in the provision of life tenancies to the over 60s for more than 30 years.

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