Bare trust could benefit investors
Sophisticated or wholesale investors looking to invest in a small group through one legal entity should consider utilising a bare trust, according to the Fold Legal.
The Fold writer, Lydia Carstensen, said that using a single-investor model through a bare trust would be convenient for investments including shares, options, convertible notes, foreign investments and crypto and digital currencies.
In such a set-up, the assets would be held in the name of a trustee who then holds them legally and on trust for each beneficiary. The trustee would have no say in how the capital or income is distributed, as the beneficiary retains this control.
Carstensen said that costs associated with bare trusts were minimal, with the main outgoing costs being fees, should the trustee be an investment manager, and potentially a one-off stamp duty payment upon establishing the trust.
She warned that, unless the trustee and investment manager holds an Australian financial services licence to provide custodial services, a bare trust could not have more than 20 investors.
Recommended for you
Perpetual has seen AUM rise 6 per cent in the last quarter but the departure of a longstanding JOHCM fund manager led to outflows of $2.2 billion from his strategy.
In the latest Meet the Manager profile, Money Management speaks with Michael Skinner, founder and managing director at Blackwattle Investment Partners.
Global fixed income fund Bentham Global Opportunities has been added to several major platforms, enabling it to be accessed more easily by financial advisers.
Following yesterday’s news about First Sentier Investors closing four investment teams, a second global asset manager has announced it is closing its only dedicated Australian fund.
