Hi John and Peter

Apologies for the delay in coming back to you on these posts.

HM Revenue and Customs has a very specific set of guidelines regarding what qualifies as a "genuinely diverse commercial vehicle" (gdcv) and rather than just diversification of assets, it refers to a number of things:

You cannot invest directly into residential property, you have to invest in a company/fund that holds resi.

The conditions are:

1. a pension scheme may not directly or indirectly hold more that 10% of the shares of the Property Company or of the voting rights or of the income or dividends or assets;

2. a pension scheme should not have the right to have private use of any of the properties and ownership of the shares will not enable a member of a scheme or a connected person of a member to occupy property held by the Property Company;

3. the Property Company holds at least three assets directly which are residential property and no property asset held directly by the Property Company has a value which exceed 40% of the total value of the property assets held directly by the Property Company;

4. the Property Company will not be controlled by five or fewer investors.

I also completely agree with John regarding geographioc and sector diversification - during the credit crunch, the global funds and those seeking to extract value from markets they did not fully understand the intricacies of each asset class often found themselves losing money hand over fist.

In contrast, our fund targets an area of just 6 square miles centred on Hyde Park, including addresses like Mayfair, Knightsbridge, Belgravia, Knesington and Chelsea. LCP has operated in this area for over 20 years, and we know every building in our market. It is this knowledge that enables us to maximise returns to our investors - I certainly would not trust myself to make investment recommednations in Newcastle and Cardiff!!!

I hope this helps

Hugh

It would seem to be what Peter is trying to achieve, on behlaf of his father, is one SIPP trustree to 'house' the pension money; within in that different investments, like Hugh's excellent sounding fund, to achieve the diversity

It may be useful to know the comparative size of your father's funds Peter, as trying to be diverse with, say, £50k is a tough ask

(16-07-2012 12:14 PM)Kevin Wright Wrote:  It would seem to be what Peter is trying to achieve, on behlaf of his father, is one SIPP trustree to 'house' the pension money; within in that different investments, like Hugh's excellent sounding fund, to achieve the diversity

It may be useful to know the comparative size of your father's funds Peter, as trying to be diverse with, say, £50k is a tough ask

Kevin and I are thinking along similar lines.

The post by Hugh just prior to Kevin also covers a lot of the important details. As a complete tangent, most of the line items cited by Hugh are what is required for a UK REIT that hold residential property. Just sharing as opposed to saying someone needs to look at a REIT.

Thanks again to Hugh for the info.