The fund will purchase a diversified portfolio of one- and two-bedroomed properties in “prime postcodes” surrounding Hyde Park in London.
The closed-ended structure means investors need a medium-term horizon as the fund will run for five years with a long stop date of seven years. By 2019 the projected return is £12,150 on a £15,000 investment.
Naomi Heaton, chief executive of LCP, said: “It is widely known that commercial property can be directly held in a Sipp, but Gordon Brown’s 2006 U-turn dashed the hopes of directly holding residential property.”
“However, LCA II can hold residential as it complies with HM Revenue & Customs’ criteria of being a ‘genuinely diversified commercial vehicle’. Few other residential funds meet this requirement.”
Based on valuations carried out this week, LCP’s first two funds show increases in capital values since acquisition of more than 50 per cent. Its third fund, fully invested in December 2013, has shown an increase of 27.8 per cent.