GCP to raise new money for ‘boring’ high yielding fund


#1

Originally published at: http://whichinvestmenttrust.com/gcp-to-raise-new-money-for-boring-high-yielding-fund/
GCP Project Finance is hoping to double in size to invest in providing project finance loans secured against physical assets or secure contracts with lengthy durations, and delivering a dividend to shareholders of around 6%. GCP or Gravis Capital Partners, was founded by a Corporate finance team from property company DTZ, who specialised in arranging…


#2

6% is a really high dividend but I wonder if they can really achieve it. Also, will it grow in time or is it just fixed at 6%?

I’m temped by this but looks like I need to move really fast. Love to know what anyone else thinks about it.
I think this would be good for my Mum as well, she’s always complaining about the awful rate she get’s on her cash ISA. If it is easy for her to get the dividend.


#3

It’s quite easy to get your dividends out from ATS but if your Mum has a cash ISA and depending on how much she wants to invest, you need to be careful to consider the costs of the platform. I think XO is a cheap platform but I’m not sure how easy it is to use.

This looks a pretty sound investment though @donnat, both of the other two GCP trusts have been pretty sound and it’s nice to see the partners have invested heavily themselves in it too.

Fees aint too outrageous either.

Best be quick if you want to get in to this one though!


#4

This will be great as long as we don’t get inflation but without inflation how else is the western world going to pay off its debts.

They would need to build in inflation protection for this to interest me I’m afraid.

Have a look at Henderson Diversified Income, they’ve got bucket loads of senior secure debt but it comes with inflation protection. Me prefers that version of senior debt.


#5

Not quite inflation protection, more like protection against rises in interest rates. Secured loans have floating rates of interest that are linked to LIBOR (or equivalent), so the interest paid will rise when LIBOR rises - assuming that the company doesn’t go bust. Whilst rates might rise to combat rising inflation, they would fall in response to the rate of incease in inflation slowing down. So the interest payments would then be reduced although the difference in inflation between now and then would not, at which point the inflation-adjusted purchasing power of those payments would be reduced. For protection against inflation then interest rates that are specifically linked to inflation is required.