Structural gearing
Split capital investment companies may be financially geared but they will also be geared as a result of their capital structure. Splits provide gearing to their share classes through their capital structure called structural gearing. This type of gearing is due to the predetermined entitlement and order of priority of the shares within the structure. The returns to each class of share are governed by the effect of the entitlements of the other share classes. The number of share classes and the proportionate entitlement of each determine the level of gearing involved. For more information see the Guide to investment companies.
