THE amount of money being invested in Business Expansion Schemes (BES) could now exceed the original £50 million forecast and could rise to as much as £60 million, fund promoters said last night.

Ulster Bank Markets yesterday became the latest promoter to close its fund to further subscriptions. It raised £5 million and was oversubscribed well beyond the promoters expectations, according to Mr Hugh Cooney, chief executive of NCB Corporate Finance, joint promoters of the fund.

Under the BES scheme, individuals can invest up to £25,000 and qualify for full income tax relief on income earned in the 48 per cent tax bracket. Therefore, someone at the 48 per cent rate could claw back up to £12,000, plus their investment and more, depending on whether the initial investment appreciated.

The closing date for taxpayers wishing to claim relief in the 1995/96 tax year is next Friday, April 5th. Those putting in funds after that date will get relief spread over the 1996/97 tax year.

The level of demand for BES investments has been unprecedented this year, with many promoters saying they could easily have raised far more money. Bank of Ireland, which was raising £5 million, reached its target over a week ago and has now extended the figure to £10 million.

Mr Stephen McGivern, of BDO Simpson Xavier, which is promoting, the fund with Davy stockbrokers, says the fund is expected to close today.

"The demand has been unbelievable we could have raised a further £5 million," he said.

Mr McGivern says the amount raised in BES funds could go as high as £60 million this year. Last year, investors placed £50 million in BES funds.

Mr John McGilligan, of Business & Trading House Investment Company Ltd, originally aimed to raise £2 million, but is seeking a small increase in this figure to cope with demand. Fundraising for his eighth BES fund, Mr McGilligan has targeted several projects including a company which supplies components to computer manufacturers, a food manufacturer and a visitor attraction centre in the west of Ireland. The largest amount his fund is investing is £700,000 and the smallest is around £400,000.

The buoyant economy, a shortage of film type investments and stricter controls pertaining to them as well as a general shortage of tax shelters are the reasons being cited by fund managers for the unprecedented interest in BES funds.

"Although apartments and other property investments have some attractive tax breaks, you need a substantial amount of cash for them," one fund manager remarked, "whereas with BES projects you do not."

One of the fastest schemes to fill was ICC Bank's. It closed without having to ago to the market - existing clients readily subscribed - and it finished up raising £8 million, easily surpassing its initial £5 million target.

One of the larger funds still open is the Ailesbury fund, managed by Cormac Crawford & Associates in association with Irish Pensions Trust (IPT). Although originally aiming to raise between £10 million and £15 million, it has lowered its target to around £6 million.

Ms Sinead Burke, of IPT, said she was confident the fund would close at around £6 million, probably early next week.

Investors are now turning their attention to the smaller funds and single projects as the barge funds close. "The large funds, whose promoters have a good track record, always fill up first," says Mr McGilligan. "After that, investors begin considering the smaller projects."

One of these is a company called - Mediplast, a Carlow based precision plastic moulded components firm, which is seeking £540,000. Promoter, Mr Richard Smyth, of accountancy firm R.J. Smyth & Co, says the company is set to achieve its target.

He has had enquiries from all over Ireland, as well as locally, and was even contacted by one investor in Brussels. He said most people were seeking to invest around £10,000. "It is more difficult for smaller projects to raise funds, especially when they are not well known," says Mr Smyth.

Another project still fund raising is a leisure centre beside the Glen Royal Hotel in Maynooth, Co Kildare. The project will feature a fully equipped gymnasium, swimming pool, sauna, steam room and jacuzzi. Building will begin next week and the £1.8 million development will be completed in September. Accountant Mr John Burke, of John Burke & Co, in Maynooth, Co Kildare, is seeking to raise £1 million for the project and is confident it will be fully subscribed.

Promoters argue that projects such as this, and others like hostels, are asset backed and so are a safe investment.

Several hostel projects are seeking funds, including the Leeson Inn, which intends to raise £1 million to convert 24 Lower Leeson Street in Dublin into a 27 bedroom hostel, with en suite rooms. Ms Breda Hartley, one of the project promoters said around half the money had been subscribed so far. The company is offering £1.15 a share at the end of five years.

Many fund managers said that, this year, they decided to cap the amount of money they were raising because there was a shortage of good projects in which to invest. The established funds, which traditionally fill up the quickest, virtually all agreed that raising money was not a problem, but that placing it could be.

Mr Simon Coyle, of Chapman Flood, joint managers of the Ulster Bank fund, said it had been necessary to close the fund to ensure that the quality of the investment portfolio would be maintained and that investors would receive their certificates, enabling them to get tax breaks, at the earliest possible stage.