20 July 2015

UK Mortgages Limited launches new fund through Guernsey

Carey Olsen's investment funds practice in Guernsey has advised bond fund house TwentyFour Asset Management on the launch of UK Mortgages Limited, a new investment fund which listed on the Specialist Fund Market of the London Stock Exchange (LSE) last week.

The fund's investment strategy is to provide shareholders with stable income returns through leveraged exposure to portfolios of loans secured against UK residential property.

The successful launch makes UK Mortgages the second largest investment trust to launch in 2015. The fund, which was oversubscribed, is targeting an annual return of between seven and 10% with an annual dividend of 3p per share and raised £250 million from investors.

Corporate partner Ben Morgan led the Carey Olsen team which provided Guernsey legal advice on the offer, fund incorporation and launch within a two-month timeframe assisted by senior associate Emma Penney. The fund was incorporated as a Guernsey company limited by shares.

Advocate Morgan said: "It was a privilege to work closely with the team from TwentyFour on such a significant investment fund launch which is the first of its kind.

"The selection of Guernsey as a domicile is testament to our strong reputation for LSE listed funds. Of the 16 LSE IPOs so far this year, eight have been Guernsey companies."

The LSE listed Guernsey-domiciled fund will invest in a diversified portfolio of existing UK residential mortgage portfolios that have demonstrated strong performance histories as well as in new portfolios.

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."