INVESTORS in the first ICC Bank Business Expansion Scheme fund are getting a return of 115.7p for every loop invested.

After tax reliefs the return to investors on the top tax rate is 124 per cent, or 15 per cent compound per annum.

ICC's first BES fund which has now been completed was set up in 1990. Some 185 investors put in funds, with an average investment of £6,000. A total of £1.1 million was raised.

The funds were invested in four companies Kleerex International, Largo Food Exports, Marine Hotel in Sutton and Sailaway Sailor.

Kleerex was the most successful investment, generating a 40 per cent return.

The availability of BES funds allowed considerable expansion at Kleerex and Largo, according to Mr Jim Rourke, managing director of ICC BES Managers.

All four investments performed well but the manufacturing companies, Kleerex and Largo, were at a development stage with more scope for growth, he said.

ICC started redeeming investments by the fund in May, 1995, and the final investments have now been redeemed. Under BES rules, funds must be invested for a minimum of five years.

At redemption time, either the company involved, its promoters or other investors must buy back the shares owned by the BES fund at market value.

The investment must be valued and then the parties negotiate to reach an agreed buyout figure. In many BES funds a cap, or maximum buy back figure, is set before the original investment is made.

The ICC fund took a 21 per cent share holding in Kleerex in 1991 for £360,000. The interest was sold for just under £500,000, a return of almost 40 per cent over five years.

The company, which designs and manufactures acrylic merchandising system and retail display units, started trading in 1988.

"Kleerex would not have been able to grow in the past five years without the BES investment which has enabled the company to develop strong international markets," according to its managing director, Mr Michael Ryan.

Turnover and employment have doubled since 1992, he said. After the funds exit ICC Bank holds 27.3 per cent of Kleerex.

Largo Foods, where turnover has grown from £3.1 million in 1990 to £12 million and employment from 40 to 200 people, could not have grown so aggressively without access to BES funds, according to its managing director, Mr Ray Coyle.

The fund invested £200,000 and sold its stake for £220,000, a return of 10 per cent over five years. ICC Bank has a 16.8 per cent take in Largo.

Some £350,000 was invested in the Marine Hotel and the fund exited with just under £400,000, a return of 14 per cent.

A £200,000 investment in Sailaway Sailor, which bought the MV Arklow Meadow, a vessel managed by Arklow Shipping, yielded a 5 per cent return when the shares were sold for £210,000.

ICC is the largest BES fund manager in Ireland. Since 1990 it has set up eight BES funds, raising £44 million.

Some £15 million from the first five funds led to the creation of 700 new jobs in 24 companies, according to ICC.

The ICC BES Tourism fund, which was set up in 1992 and invested £8 million in 10 tourism related project, will be realised before the end of the year.

"Our research has shown that BES investments are an essential and competitive source of finance for Irish companies while also proving attractive to investors," Mr Rourke said.