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Guernsey Facilitates Major Fund Launch

by Jason Gorringe, Lowtax.net, London
21 July, 2015

Guernsey's UK Mortgages Limited has listed on the Specialist Fund Market of the London Stock Exchange (LSE), becoming the second-largest investment trust to launch in 2015.

The closed-ended fund, which was oversubscribed upon its admission earlier this month, is targeting an annual return of between 7 and 10 percent, with an annual dividend of 3p per share. The launch raised GBP250m (USD389.3m).

The fund will invest in a diversified portfolio of existing UK residential mortgage portfolios that have demonstrated strong performance histories and also new portfolios.

Carey Olsen's investment funds practice in Guernsey advised bond fund house TwentyFour Asset Management on the launch of UK Mortgages Limited.

Corporate Partner Ben Morgan led the Carey Olsen team that provided Guernsey legal advice on the offer, fund incorporation, and launch within a two-month timeframe.

Morgan said: "The selection of Guernsey as a domicile is testament to our strong reputation for LSE-listed funds. Of the 16 LSE [initial public offerings] so far this year, eight have been Guernsey companies."

Mark Holman, the head of TwentyFour, said: "UK Mortgages provides an opportunity to access an attractive yield supported by a historically robust asset class. The income potential and historically low correlation to other asset classes has clearly appealed to investors."

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