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Innovative Guernsey fund to invest in gold bullion coins

24 September 2014

The Guernsey Financial Services Commission (GFSC) has granted authorisation to The GB Gold Fund LP, an innovative fund that will invest in gold bullion coins.

The GB Gold Fund LP will buy and hold one troy ounce 999.9 fine gold Britannia coins that have a UK government assurance of weight and quality, an unlimited mintage and are exempt from both value-added tax (VAT) and UK capital gains taxation.

Never previously offered through a collective investment scheme, the coins will be held segregated in offshore vault facilities and will not be subject to any form of leverage, lending, shorting or derivatives.

The fund is the brainchild of Robin Newbould, Managing Director of precious metals experts Bullion Rock, which will act as both a broker and sub-custodian of the GB Gold Fund. Mr Newbould worked with a number of fund, tax and legal experts, including Carey Olsen Partner Tom Carey, who advised on the Guernsey legal and regulatory structure required for authorising the fund.

Mr Newbould said: "The GB Gold Fund has been created to provide wealth and investment managers with the ability to offer their clients easy access to the unique qualities of the gold Britannia coin via a tax-efficient regulated collective investment scheme."

Lancaster Investment Services Limited will act as the investment manager to the fund, which has been authorised as an open-ended Class Q Scheme and Qualifying Investor Fund suitable for investment by qualifying professional investors.

David Chan OBE, Managing Director of Lancaster Investment Services, said: "There are many uncertainties in the world, but an ounce of pure gold has been a store of value for millennia and the physical redemption process of the fund should give underlying investors absolute peace of mind. Ultimately, their bullion coins, checked by three independent firms throughout the life of the fund, will be held for them to collect if, as, and when, they want."

As an open-ended limited partnership, the fund will offer a weekly dealing facility with investors able to redeem in cash or in specie, the latter option subject to them having an account open with a suitable bullion services provider. The fund has also appointed Butterfield Bank (Guernsey) Limited as custodian, Legis Fund Services Limited as administrator and HowardKennedyFsi LLP as UK legal adviser.

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