Investment Objective

The Company’s investment objective is to provide its Shareholders with regular,   sustainable dividends   and   to generate capital   appreciation through investment, directly or indirectly, in business-essential, revenue- producing (or cost-saving) equipment and other physical assets.

Investment Policy

The   Company will seek to   invest   in business-essential, revenue- producing   (or cost-saving) equipment and other assets with high in- place value and long economic life relative to the investment term.

The Company expects the majority of investments, over time, to be in the specialist segment of the leasing market where, typically, assets provide cashflow   during the base term of the leases as well as offering the potential for additional proceeds through lease extensions or sales at the end of the lease. The Company generally does not intend to invest in the large   single   asset segment of the   leasing   market,   such   as   aircraft leasing, which is heavily reliant on residual   value to meet   its return targets, or the high volume, low margin segment of the leasing market, such as photocopier and automobile leasing, although it may do so, from time to time, if appropriate opportunities are identified in these segments.

The   Company may   invest   in assets in any industry.   However,   the Company generally expects to be invested in such industries where the Investment Managers see the potential to make the most attractive risk- adjusted   returns which   currently   include,   but   are   not   limited   to, Agriculture, Energy,   Environmental, Manufacturing, Material Handling, Medical, Modular Accommodation, Technology and Transportation.

The Investment Managers will target transaction sizes below £20 million but, generally, the average transaction size is expected to be £3 million to £6 million, although it may fluctuate based on the market opportunities and portfolio composition that the Investment Managers believe will best achieve the   Company’s investment   objectives. Whilst there   is   no minimum lease term, it is typical for the initial lease term to be 3 to 10 years depending on the asset. However, where appropriate, the term of the   lease may    vary   significantly   from   this   range reflecting   the opportunities available and the needs of the lessee.

It is intended that the Company and/or   its subsidiaries will primarily acquire assets directly and function as the lessor under equipment lease contracts. In such situations, the Company will own all rights, title, and interest in and to the assets and will lease them to the end-user. In other situations, the Company may own assets and enter into hire-purchase agreements where the Company will own the assets until all payments are made under the agreement and a pre-agreed nominal purchase price is paid to the Company.

The assets held by the Company will generally be leased to a third party and will be subject   to either a direct finance (cashflow) lease or an operating lease. The Company intends to balance the portfolio between direct finance leases, to provide regular cashflow, and operating leases, to   provide   capital   appreciation   opportunities.   Many,   but   not   all, investments will be structured to provide return of capital and interest during the lease term with an opportunity for additional realisation from the residual value after the initial lease term.

The Investment Managers will generally   seek to acquire   investments and/or enter into lease arrangements that require the lessee or other counterparty to bear all tax, maintenance, insurance, and other costs related to the lease or the operation of the underlying asset(s). Generally, as a result, the Company will not be required to undertake maintenance on assets but reserves the right to do so on an exceptional basis.

Whilst the Company and/or   its subsidiaries will typically seek direct ownership of the assets under lease, the Company may also obtain exposure to such   investments through   holding securities that   have exposure to an underlying asset or assets that meet the Company’s investment criteria where it is more advantageous for the Company to do so or a direct investment is not possible. This includes, but is not limited to, holding or entering into debt securities, loan agreements, equity securities,   participation   agreements,   hybrid   instruments,   or   other securities, whilst maintaining the desired economic exposure and level of security.

The Company may invest in residual interests in assets or equipment. When the Company invests in residual interests, it or its subsidiaries will acquire the rights and/or title to equipment, assets, income or proceeds in respect of the period after the end of the initial lease term or other underlying contract term. Cashflow from the residual interests generally will not commence until all of the obligations under the initial term are satisfied. Once those obligations are satisfied, rights and/or title to the underlying equipment, assets, income or proceeds will be transferred to the Company or its subsidiaries. Furthermore, the Company may elect to sell all or part of the lease receivables to a third party investor or bank and retain its exposure to the asset by retaining ownership of the residual value (in addition to any proportion of the lease receivables retained). Therefore, in relation to certain investments, the Company may be reliant on the residual value to obtain its return on that investment. It is not expected that residual interests would represent more than 35 per cent. of the portfolio at the time of investment.

Investments will primarily be made in the United Kingdom, the United States and Europe which is expected to represent at least 75 per cent. of the portfolio. The Company may also invest in assets and equipment located or subject to law in Canada and Australia and other countries, regions, or jurisdictions where the Investment Managers believe they can adequately secure the Company’s interest in assets and   equipment whilst achieving an appropriate risk-adjusted return consistent with the rest of the portfolio.


The Company’s portfolio will be subject to diversification policies limiting the maximum amount of capital that can be invested in a single asset, in a single asset class, in assets held by a corporation or group or held by companies in a specific industry, as a percentage of NAV of the portfolio, measured at the time of investment:

Maximum by asset:  15 per cent.

Maximum by asset class:  30 per cent.

Maximum by corporation or group:  15 per cent.

Maximum by industry:  30 per cent.



The Company does not intend to utilise borrowings on a portfolio basis for investment purposes. However, the Company may, from time to time, utilise borrowings for share buybacks and short term liquidity purposes, but such borrowings will not, in any event, exceed 15 per cent. of the Company’s Net Asset Value at the time of investment. This does not prevent the Company from purchasing the equity or subordinated participation in a special purpose entity set up to own an asset or a pool of assets or equipment, which itself may be geared.