Former Cofunds Chief Launches Alternative Investment Business
**OBI with Two Funds in the Alternative Sector**
As part of a wider drive into the alternatives market, Brett Williams, a former head of UK’s leading investment platform Cofunds, has launched a new venture called Old Burlington Investments (OBI). Owned by private equity group LW², where Williams has been a partner since January this year, OBI is launching two alternative investment funds, both structured as Enterprise Investment Schemes (EIS), which offer tax breaks to UK investors.
One of the OBI’s funds will focus on renewable energy, including investments in green technology and energy generation schemes where revenues are underpinned by the government. The second, the Old Burlington Investments AIM Growth Fund, will invest in young firms listing on the Alternative Investment Market (AIM).
For both funds, Old Burlington Investments will be partnering with sector specialists. For the Renewable Energy Fund, OBI has teamed up with solar PV asset management firm Bluefied Partner, which is backed by prominent venture capitalist Jon Moulton. Meanwhile, for its AIM Growth Fund, OBI will be partnering with SME (small and medium enterprises) private equity specialist Percipient Capital.
**Mainstream Funds Disappointing, Alternatives Poised for Significant Growth**
Williams said he aims to grow his new alternative business in the long term by launching more EIS products and other alternatives into the market over time. According to the OBI founder, alternatives are poised for significant growth over the next three years. His forecast is based partly on potentially increasing demand for such assets due to the most recent legislative changes for EISes, which now allow investors to put up to £1 million a year into an EIS vehicle, while companies can raise up to £5 million a year from through an EIS.
!m[Brett Williams of OBI is a former head of Cofunds](/uploads/story/675/thumbs/pic1_inline.png)On the other hand, Williams sees the alternative business sector growing due to the recently-increasing disappointment in traditional asset classes, which do not provide sufficient returns. The former Cofunds’ chief explained: “Mainstream funds have been disappointing over the last decade, while the real return on cash is negative. This makes EISs more attractive, especially as the government is incentivising smaller businesses to help stimulate the economy.”
**EISs at Risk from New FSA Rules**
Investments under the EIS and Venture Capital Trust (VCT) schemes are currently at risk of falling under the UK’s Financial Services Authority’s (FSA) new Unregulated Collective Investment Schemes (UCIS) rules. The FSA proposals, outlined in the regulator’s latest consultation, would limit the range of investors who can access VCT and EIS investments, despite the government encouraging advisers to recommend the schemes to clients.
In reaction to the FSA proposal to ban the promotion of UCIS to the vast majority of investors, Williams said that the regulator risks muddying the water if it does not spell out the rules clearly to advisers. He said: “The FSA is in danger of confusing advisers and ruling out products that are appropriate for some of their clients to consider as part of a balanced portfolio.”
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