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Lord Rothschild fund joins World Gold Council to put £12.5m into BullionVault
An investment fund backed by Lord Rothschild has joined the World Gold Council to put £12.5m into BullionVault, the online gold investment platform.
11:26PM BST 20 Jun 2010
CommentTim Levene of Augmentum Capital, a fund backed by Lord Rothschild's RIT Capital Partners, said the investment was not a bet on the gold price but on "the future growth of the BullionVault platform", which stores physical gold for private clients in London, New York and Zurich. RIT currently has 9pc of its assets in physical gold.
Investment demand for the metal has risen on concerns that sovereign debt problems could spread and the value of currencies plunge. The gold price hit a new nominal all-time high above $1,260 on Friday and analysts expect the price will continue to rise.
In return for the £12.5m investment, the World Gold Council and Augmentum will receive an equity stake in BullionVault.
Marcus Grubb, managing director of investment at the World Gold Council, said taking the BullionVault stake was part of the Council's strategy of "increasing its portfolio of successful platforms for gold investment". Mr Levine and Mr Grubb will join BullionVault's board.
BullionVault has about $800m (£540m) of gold under management for 20,000 customers from more than 90 countries. The average holding is around £30,000.
The World Gold Council's previous investment vehicle, a gold exchange-traded fund, now has 1,306 tonnes of the metal under management, worth $52.3bn. This makes it the world's second-largest exchange-traded fund. If the fund was a central bank, it would be sixth largest in the league table of gold holders.