We are excited to let you know we are planning to launch a new fund early next year. It will be a RAIF (Reserved Alternative Investment Fund) which will be based in Luxembourg. So why a RAIF and why Luxembourg?
Well, there are a number of advantages of RAIFs. Let me explain.
An Alternative Investment Fund gives the fund manager great flexibility by allowing investment into a far wider range of assets than a conventional UK retail investment fund such as an OEIC or a unit trust.
Furthermore, such a fund allows investment of any size into one asset such as a particular company’s shares whereas a traditional UK retail fund typically doesn’t allow an investment of more than 10% into any one company’s shares. This means that winners will be allowed to run rather than be sold down when on the rise.
It also means that if stock markets are crashing funds could be moved 100% into cash to protect the downside. That simply isn’t possible with a UK retail fund such as an OEIC or unit trusts. So the downside can be protected.
Another bid advantage of RAIFs is that they can accept investment from investors globally from most countries including the US, the Middle East, the EU, Singapore, India, Switzerland and the UK to name the principal markets for investors into our fund.
The fund will only be available for professional investors which means either institutions or high net worth/sophisticated individuals with a minimum investment size of £100,000.
What will be our investment strategy?
Well, it will be to invest in ten of the greatest businesses in the world by which we don’t necessarily mean Magnificent Seven types of businesses. We will invest in companies which meet the following criteria;
- Run by visionary founder owners with skin in the game
- Highly scalable globally with a large total addressable market
- High ROIC (return on invested capital)
- High free cash flow
- A competitive advantage (financial moat)
These are the kind of companies that we recognise to be the best run businesses in the world. The type of companies that put their shareholders first and wish to maximise investor returns. You know it makes sense.*
Tony Byrne, Managing Director
If you want to learn more about this topic, please find the link here.
More information about our fund can be found here: Hargreaves Lansdown or AJ Bell
*Risk warnings
Minerva Money Management Ltd (FRN: 754570) is authorised and regulated by the Financial Conduct Authority. The value of investments can fall as well as rise. You may not get back what you invest. The information contained within this article is for guidance only and does not constitute advice which should be sought before taking any action or inaction. All information is based on our current understanding of taxation, legislation, regulations and case law in the current tax year. Any levels and bases of relief from taxation are subject to change. Tax treatment is based on individual circumstances and may be subject to change in the future. This blog is based on my own observations and opinions.
