REAL ESTATE GROWTH SERVICE OVERVIEW

Transcription

1 REAL ESTATE GROWTH SERVICE OVERVIEW

2 INTRODUCING THE INGENIOUS REAL ESTATE GROWTH SERVICE For almost 20 years, Ingenious has been at the forefront of creating innovative and well managed investment opportunities for our clients and in that time we have raised and deployed over 9 billion into our three chosen sectors: real estate, infrastructure and media. Our philosophy centres on combining a clear understanding of our clients needs with marketleading investment expertise delivered through tailored investment solutions. The Ingenious Real Estate Growth Service (the Service) is a discretionary investment management Service which aims to provide investors with capital growth delivered from an investment strategy focusing on providing finance to experienced real estate developers and secured against developments in locations across the UK where there is established demand. The Service s objective is to provide an attractive, asset-backed return, while preserving the value of an investment. In addition, subject to personal financial circumstances, by investing only in companies that should satisfy the conditions for Investors Relief (IR), any gains generated by an investment may also benefit from a reduced 10% rate of capital gains tax upon exit. The investment strategy is supported by Ingenious dedicated team of real estate experts. The team combines deep experience across all aspects of real estate finance with a broad network of commercial relationships to provide access to the highest quality financing opportunities and risk management expertise. Your financial adviser will offer guidance on whether the Ingenious Real Estate Growth Service is right for you. If you or your adviser have any questions about this Service please contact our dedicated Client Relationship Team on GROWTH EFFICIENCY RISK MITIGATION EXPERT MANAGEMENT CAPITAL GAINS RELIEF ESTATE PLANNING TOOL

3 KEY FEATURES MARKET SECTOR Asset-backed real estate, bridging, development and mezzanine lending INVESTMENT STRATEGY OVERVIEW Investing in one or more trading companies which provide assetbacked lending to experienced developers secured against high quality projects in stable markets with established demand TARGET ANNUAL GROWTH RATE 5 8% (net of applicable fees and charges) INVESTMENT HORIZON You would need to hold your Shares for at least three years in order to be eligible to qualify for Investors Relief (IR) MINIMUM INVESTMENT 25,000 Our industry experience means we place risk management at the core of our investment strategy Target performance is not a reliable indicator of future results and the value of an investment may go down as well as up and investors may not get back the full amount invested. Tax treatment depends on the individual circumstances of each client and may be subject to change in future.

4 INVESTMENT STRATEGY MARKET OVERVIEW The UK real estate market is characterised by structural supply shortages across a range of commercial and residential asset classes. In the residential market, for example, changing demographics, affordability and the availability of funding are driving a widening gap between supply and demand with annual growth of UK households at 310,000, against which only an average of 166,000 new homes are being built each year. 1 A key area of demand is in developments valued at between 5m and 50m, focused upon high-quality, but affordable property, and is a key area of focus for well-established regional and national developers. This is a market underserved by traditional high street lenders, providing a significant opportunity for alternative lenders to support the growth demands of the UK real estate market with development finance on high quality projects offering attractive, asset-backed, returns. STRONG MARKET FUNDAMENTALS Significant gap between supply and demand across a range of UK real estate asset classes SUBSTANTIAL ACTIVITY High volume of high quality commercial and residential development activity by established regional and national developers in 5m - 50m value range LIMITED FUNDING AVAILABLE Before 2008, UK high street banks provided 72% of all development finance. In 2017 this figure was as low as 47% 2 STRONG DEALFLOW + ATTRACTIVE RETURNS Strong funding opportunities for an alternative lender offering potential for attractive risk adjusted returns 1 Source: Town and County Planning Association 2 Source: De Montfort Year-end 2016 commercial Property lending report The value of an investment may go down as well as up and your client may not get back the full amount invested. Tax treatment depends on the individual circumstances of each client and may be subject to change in future

5 INVESTMENT STRATEGY It is essential in implementing a trading strategy to focus on the best transactions available in the market. Our strong reputation and network of relationships across the sector means that we have access to a large number of opportunities and can therefore be selective in choosing which ones to support, closing on average only 5 10% of the deals that we consider. In order to ensure consistency in quality, our strategy is built upon clearly defined lending principles designed to reduce investment risk by focusing on the following key criteria: High quality, profitable, projects undertaken by experienced developers with a strong track record Developer equity contribution, aligning interests and providing protection against adjustment in market values Locations with strong demand, notably London, South East and established major regional centres and their commuter belts Property types with strong levels of demand and well-priced for their target market DEVELOPMENT FINANCE BRIDGING FINANCE MEZZANINE FINANCE MAX MAX Typical deal size: 5m- 25m Typical loan term: months Typical deal size: 3m- 15m Typical loan term: months Typical deal size: 2m Typical loan term: months. No more than 25% of the loan portfolio at any time will comprise mezzanine loans DEVELOPMENT LOAN A loan to finance the construction of units (including flats or houses and commercial buildings). This loan would typically be repaid from the sale of these units. BRIDGING LOAN A loan typically used to finance the acquisition of an asset by a developer in order to prepare the site for a new development scheme. The loan will usually be repaid by either the sale of the land or by a development loan to build out the scheme. MEZZANINE LOAN Mezzanine debt is secured lending that is subordinate to another senior lender (typically a high street bank). The mezzanine debt gets repaid after the senior debt and before the equity.

6 INVESTMENT TEAM The lending activities of a Portfolio Company will be supported by Ingenious dedicated real estate finance team, led by senior real estate finance professionals with significant sector experience and a track record of management of substantial loan portfolios. Ingenious solution-focused approach to relationship management also helps to ensure that a Portfolio Company will not only have access to a large pipeline of high quality funding opportunities, but also that all loans will be professionally executed and managed under a highly robust and proactive risk management framework. CLEAR AND ESTABLISHED STRATEGY Supported by highly rigorous and selective approach to underwriting OVER 250M DEPLOYED TO DATE Across a range of residential and commercial transactions STRONG NETWORK OF CONTACTS Providing access to a high volume of suitable transactions 100+ YEARS OF EXPERIENCE A team of specialist real estate professionals assembled from major financial institutions RANGE OF EXPERTISE Skills and experience across real estate banking, property management and law THROUGHOUT ECONOMIC CYCLE Successful management of substantial loan portfolios in all market conditions

7 TRACK RECORD Since inception in 2013, Ingenious Real Estate division has overseen the origination, execution and management of over 250 million in funding commitments across more than 30 projects, supporting the construction of over 2,000 residential and commercial units. LEICESTER 5.8m FINCHLEY 7.7m LEATHERHEAD 1.5m CHELMSFORD 2.6m HARROW 7m LONG LANE 6.9m 12m WALTHAMSTOW 6.2m GUILDFORD 7.1m KENTISH TOWN 3.6m BRAINTREE 2.9m MUCH HADHAM 7.1m NORTHOLT 3.8m ALDGATE 9.3m GOLDERS CREEN 7.5m BRISTOL 18m SOUTHALL 28m KINGSTON 20.5m BASINGSTOKE 4.2m COBHAM 2.6m HORSHAM 3.7m TWICKENHAM 3.4m GERRARDS CROSS 3.9m 7.4m MOTSPUR PARK 4m WILLINGHAM 2m ST NEOTS 1m LUTON 3.6m 12.8m CLAPHAM 4.2m SLOUGH 12m EAST DULWICH 3m MILTON KEYNES 1.9m WATERLOO 1.8m 4m WE HAVE RAISED AND DEPLOYED OVER 250 MILLION INTO UK REAL ESTATE The value of an investment may go down as well as up and your client may not get back the full amount invested. Past performance is not a reliable indicator of future results.

8 FINE PRINT SUBSCRIPTIONS Subject to the Manager s discretion to accept a smaller amount the minimum individual subscription in the Service is 25,000 and an investor can make further subscriptions in the Service of no less than 10,000 for each further subscription. REALISATIONS 3 (a) Gains in the value of an investor s Portfolio will only benefit from CGT at the 10% rate after being held by the investor for three years 4. Any such gains realised from the disposal of Shares earlier than three years will be subject to CGT at the full applicable rate 5. (b) The Manager will seek to satisfy all payment requests made by an investor from his or her Portfolio by facilitating a sale of shares. The Manager s ability to facilitate payment requests will always be subject to liquidity constraints, the Manager s discretion and the terms of the investor agreement. It may not be possible to facilitate prompt payment in all cases. Investments made by the Manager are in unquoted companies and are therefore likely to have less liquidity than listed shares. In particular, if there are a number of unusually large payment requests, the timing and process for realisation of investments may take considerably longer than targeted. (c) All payments will be executed by reference to the latest published NAV for the applicable Shares on the date the relevant payment request is processed. (d) Until a final redemption is requested, an investor must retain a minimum of 10,000 invested in his or her Portfolio at all times. FEES AND CHARGES An investment fee of 2% of your subscription. This will be in addition to any fee charged by your adviser. An annual management fee of up to 1.5% of the value of your Portfolio. This fee will be payable annually but only from growth in your investment above 3% during that year. No annual management fee will be paid if annual growth in your investment is less than 3%. A dealing fee of 1% of the value of your subscription charged on investment and 1% of the value of shares sold upon any realisation made from the service. Exit dealing fee of 1% on redemption of shares. An annual administration fee of 0.50% of the value of your subscription. All charges will be subject to applicable VAT. Other administrative and transaction fees are payable. Full details of all charges are set out in the brochure and investor agreement. Payment of any ongoing fees payable to your adviser will be facilitated by realising a portion of your investment. This may give rise to a tax charge for you. HOW TO APPLY After reading the brochure and the investor agreement, please complete the relevant application form and return it with supporting documentation and payment to Client Services Centre, Ingenious Capital Management Limited, 15 Golden Square, London, W1F 9JG. IMPORTANT INFORMATION This brochure contains information relating to investing in the Service. An investor may only make a subscription to the Service on the basis of this brochure, the investor agreement and the relevant application form. All statements of opinion or belief contained in this brochure and all views expressed and statements made regarding future events represent the Manager s own assessment and interpretation of information available to it as at the date of this brochure. No representation is made, or assurance given, that such statements or views are correct or that the objectives of the Service will be achieved. A prospective investor must determine for himself or herself what reliance (if any) he or she should place on such statements, views or forecasts, and no responsibility is accepted by the Manager in respect thereof. 3 Payment of any ongoing fees payable to your adviser will be facilitated by realising a portion of investments held in your Portfolio. Any investments realised during your lifetime may give rise to tax charges 4 Subject to the investor not having exceeded the 10m lifetime allowance 5 Subject to any available CGT annual exempt amount Investments made by the Manager are in unquoted companies and are therefore likely to have less liquidity than listed shares.