BES investment this year likely to fall 14%

THE amount invested in BES funds this year is likely to be down by around £10 million or 14 per cent on last year, according to industry estimates.

The amount invested in funds is expected to be around £55 million, with a further £5 million in private schemes. Last year total investment was over £71 million and in 1995 it was £77 million. Funds must be closed next Monday.

Fund managers believe that, despite the bouyancy of the economy, there has been less interest in BES investment because of "unacceptable delays" last year in the issuing of tax clearance or Relief for Investment in Corporate Trade (RICT) certificates to investors.

Investors cannot claim the tax relief available through the scheme until they have received the RICTs. These cannot be issued until the money has been invested.

While the major funds have tended to restrict themselves to small amounts this year, there has been an expansion in the number of small funds operating, sources said.

Mr John McGilligan, managing director of Business and Trading House Investment Company Ltd, said his estimate for the amount invested in funds was £55 million "give or take a few per cent".

"Last year there were a lot of delays in getting money invested by the funds," Mr McGilligan said. This was because of the amounts of money the funds had taken in and the shortage of low risk investment projects.

"I'd say a lot of people were very annoyed."

This year the Business and Trading House Investment Co Ltd fund was closed at £2.5 million. His company had performed well last year, he said.

Mr Noel Minogue, of AIB Investment Managers, said they had "no difficulty" in raising money this year. "The question is being comfortable with investing the money.

AIB closed their fund last week, with around £5.5 million. Last year's fund has now been fully invested and 62 per cent of the RICTs are issued. It is expected that by the end of this month a further 26 per cent will be issued, with the remaining 12 per cent outstanding because of special conditions to do with investments in start-up companies.

Mr Stephen Pearce, of Stephen Pearce Pottery, Shanagarry, Co Cork, said his company had raised £1 million through BES over the past five years. The company deals directly with investors, offering them a return equivalent to 5 per cent per annum. (The investor also gains through tax relief.) Returns from Stephen Pearce investments are paid out after five years, so the first payments are to be made this week.

Investors have been local farmers, business people who buy his products, and include a former parish priest from Shanagarry.